Issues relating to challenging and enforcing domestic arbitration award : an overview

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July 5, 2024

This article has been written by Zara pursuing a Diploma in Domestic & International Commercial Arbitration from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

A panoramic look at the Arbitration and Conciliation Act 1996, two major amendments of 2015 and 2019 and court judgements makes it apparent that our judiciary is constantly striving to make it speedy and effective through its minimum intervention, which is a paradox, at one hand, restoring the independence of the arbitration, which is a positive move for the winning party but on the other hand, sowing seeds of doubt about transparency and accountability in the arbitration proceedings for the defeated party.

Therefore, striking a balance between aspirations from the ADR and reality is an ongoing, tumultuous journey both by the courts and the corporate /commercial commercial sectors.

In this journey, issues emerging at the final stage undermine the intended efficiency of ADR, leaving the parties disillusioned and, obviously, the counsel in a difficult position, sometimes in a quagmire.

In this article, we will discuss the issues related to challenging and enforcing domestic arbitral courts in light of judicial pronouncements.

Challenging the award

Not everyone takes defeat in stride. So whenever an arbitral award goes against one of the parties to the dispute, he seeks ways of setting it aside. Though setting aside the whole does not seem to be possible or extremely challenging and rare, modification in part can be done much easier.

Issues related with challenging the award

Though Section 34 of the Arbitration and Conciliation Act 1996 provides for process and grounds for challenging the domestic arbitral award, it sets a high bar for success, and this is because:

Burden of proof on the applicant: The party challenging the award has the burden of proving the grounds for setting it aside. This requires convincing the court that the award falls under one of the limited exceptions.

Indian courts generally show deference to the decisions of arbitral tribunals. They are hesitant to interfere unless a compelling reason/ ground exists under Section 34 therefore, it can be rightly said that the Act provides for limited grounds for challenging the award, keeping alive the spirit of effective dispute resolution.

Limited grounds under Section 34(2)(a)

Reading Section 34(2) , it is evident that an award can be set aside by the party making an application and by the court on the grounds mentioned therein.

The grounds mentioned in Section 34 (2)(a) of the Act for challenging the domestic award by the party making the application and satisfying the court only on the basis of the records of the arbitral tribunal are:

Incapacity of the party (e.g. on the basis of minority or unsound mind), but it is curable.
Invalidity of the arbitration agreement
Not giving proper notice of the appointment of the arbitrator or of the arbitral proceedings
The arbitral award deals with a non-arbitrable dispute in whole or in part
The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties.

All the above grounds (ii to v) question the existence, validity, and procedural fairness in appointment & conduct, as well as the scope of arbitration. Setting aside such awards serves the best interest of justice, providing relief to the defeated party.

Following are some case laws where successful challenges were made by invoking the above mentioned grounds.

ONGC vs. Saw Pipes AIR (2003)

In this case, the Hon’ble Court first extensively discussed the court’s jurisdiction to set aside an award under Section 34 of the Arbitration and Conciliation Act 1996 and broadened the grounds on which interference was permissible, which includes

Award exceeding the scope of the dispute submitted to arbitration.
Serious procedural irregularity affecting the rights of a party.
Award violating public policy of India

But there is an instance where the Apex Court exercised limited judicial review and did not interfere with the award.

McDermott International Inc. vs. Burn Standard Co. Ltd. (2006)

In the landmark case of McDermott International Inc. vs. Burn Standard Co. Ltd. (2006), the Supreme Court of India upheld the principle of minimal judicial interference in domestic arbitration. This decision reinforced the sanctity and finality of arbitral awards, recognising their binding nature even in the presence of potential flaws in reasoning.

The case involved a dispute between McDermott International Inc., an American company, and Burn Standard Co. Ltd., an Indian company, arising from a contract for the construction of a power plant in India. The dispute was referred to arbitration in accordance with the terms of the contract.

The arbitral tribunal appointed to adjudicate the dispute issued an award in favour of McDermott International, Inc. However, Burn Standard Co. Ltd. challenged the award before the Indian courts, arguing that the tribunal had erred in its interpretation of the contract and that the award was based on insufficient evidence.

The Supreme Court, in its judgement, emphasised the importance of upholding the sanctity of arbitral awards and promoting the finality of arbitration proceedings. The Court held that judicial interference in domestic arbitration should be kept to a minimum and that courts should refrain from scrutinising the merits of arbitral decisions or reassessing the evidence considered by the tribunal.

The Court acknowledged that arbitral tribunals may occasionally make mistakes in their reasoning or interpretation of the law. However, the Court stressed that such errors, by themselves, do not render an arbitral award invalid or unenforceable. The Court emphasised that the primary objective of arbitration is to provide a swift and efficient resolution of disputes, and that this objective would be undermined if courts were to engage in a detailed review of the tribunal’s reasoning process.

The Supreme Court’s decision in McDermott International Inc. vs. Burn Standard Co. Ltd. has significantly contributed to the development of arbitration law in India. It has reinforced the principle of minimal judicial interference in domestic arbitration, ensuring that arbitral awards are respected and enforced without undue scrutiny by the courts. This decision has fostered a favourable environment for arbitration in India, making it an attractive option for resolving commercial disputes.

In Ssangyong Engineering & Construction Co. Ltd. vs. NHAI (2019), the Supreme Court of India delivered a landmark judgment that significantly impacts the landscape of arbitration in the country. The court held that, after the 2015 amendment to the Arbitration and Conciliation Act, 1996, courts cannot interfere with an arbitral award on its merits. This ruling has far-reaching implications for parties involved in arbitration proceedings and reinforces the principle of minimal judicial intervention in arbitration matters.

Prior to the 2015 amendment, courts had the authority to review arbitral awards on both legal and factual grounds. This meant that a party dissatisfied with an arbitral award could challenge it in court, arguing that the award was based on errors of law or fact. However, the 2015 amendment significantly curtailed this power of judicial review. Section 34(2A) of the amended Act now stipulates that courts can only interfere with an arbitral award in limited circumstances, such as when the award is in conflict with the public policy of India or when it is induced by fraud or corruption.

The Supreme Court’s decision in Ssangyong Engineering & Construction Co. Ltd. vs. NHAI further clarified the scope of judicial review under Section 34(2A). The court held that “merits” of an arbitral award include both questions of law and fact. This means that courts cannot examine whether the arbitral tribunal correctly interpreted the law or whether its findings of fact were supported by the evidence. The court emphasised that the role of the court is limited to ensuring that the arbitral process was conducted in accordance with the law and that there were no procedural irregularities.

This judgement is significant for several reasons. Firstly, it reinforces the sanctity of arbitral awards and enhances the enforceability of arbitration agreements. Parties can now have greater confidence that arbitral awards will be upheld by courts, unless there are compelling reasons for interference. Secondly, it promotes the efficiency and finality of arbitration proceedings by discouraging frivolous challenges to arbitral awards. Thirdly, it aligns India’s arbitration laws with international best practices, which emphasise minimal judicial intervention in arbitration.

In conclusion, the Supreme Court’s decision in Ssangyong Engineering & Construction Co. Ltd. vs. NHAI is a positive development for arbitration in India. It provides greater certainty and predictability to parties involved in arbitration and strengthens the role of arbitration as an effective means of dispute resolution.

Ambiguous and limited grounds for setting aside the arbitral award by the court

Section 34(2) (b) when the Court finds that:

the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force,
the arbitral award is in conflict with the public policy of India

It is clarified that an award is in conflict with the public policy of India only if:

the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81 (i.e principle of confidentiality in conciliation)
it is in contravention with the fundamental policy of Indian law; or
it is in conflict with the most basic notions of morality or justice.

The test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.

The following additional provision empowers the Indian court to set aside domestic arbitral awards if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:

Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.

ONGC Ltd. vs. Western Geco International Ltd. (2014)

Facts:

ONGC Ltd. (ONGC), an Indian state-owned oil and gas company, entered into a contract with Western Geco International Ltd. (Western Geco), a Norwegian seismic data acquisition company, for the provision of seismic data acquisition and processing services.
A dispute arose between ONGC and Western Geco regarding the interpretation of the contract and the amount payable by ONGC to Western Geco.
The parties agreed to resolve the dispute through arbitration in accordance with the rules of the International Chamber of Commerce (ICC).

Arbitration proceedings

The arbitral tribunal constituted under the ICC rules issued its award in favor of Western Geco, holding that ONGC was liable to pay a certain amount to Western Geco.
ONGC challenged the arbitral award before the Bombay High Court, arguing that the tribunal had erred in its interpretation of the contract and in the calculation of the amount payable.

Supreme Court’s decision:

The Supreme Court upheld the Bombay High Court’s decision and dismissed ONGC’s appeal.
The Supreme Court held that:
- Courts cannot review the correctness of factual findings or interpretations by the arbitrator, as the arbitrator is the final judge of both law and facts.
- However, courts can modify the quantum of an award when a technical error in the calculation is committed by the arbitrator.
In this case, the Supreme Court found that the arbitral tribunal had made a technical error in calculating the amount payable by ONGC to Western Geco.
The Supreme Court accordingly modified the arbitral award and reduced the amount payable by ONGC.

Significance:

The Supreme Court’s decision in ONGC vs. Western Geco clarifies the scope of judicial review of arbitral awards in India.
The decision reinforces the principle that courts should not interfere with the findings of fact and interpretations of law made by arbitrators.
However, courts can intervene to correct technical errors in the calculation of damages or other monetary awards made by arbitrators.

Associate Builders vs. Delhi Development Authority (2015)

Facts:

This case involved a dispute between Associate Builders (the appellant) and the Delhi Development Authority (DDA) (the respondent) over a construction contract.
The dispute arose when the DDA terminated the contract and claimed damages from Associate Builders for failing to complete the project within the stipulated time.
Associate Builders challenged the DDA’s claim before an arbitral tribunal, which ultimately ruled in favour of the DDA.
Associate Builders then filed a petition in the Delhi High Court challenging the arbitral award on various grounds, including that it was against public policy.
The Delhi High Court dismissed Associate Builders’ petition, holding that the arbitral award was not against public policy.

Legal Issue:

The main legal issue before the Supreme Court was whether an arbitral award can be challenged on the ground that it is against public policy.

Judgement:

The Supreme Court upheld the Delhi High Court’s decision and ruled that an arbitral award can only be challenged if it is against public policy, not merely because it contains an error of law.
The Court clarified that the term “public policy” in Section 34 of the Arbitration and Conciliation Act, 1996, refers to the fundamental principles of justice, morality, and fairness that are recognized by the legal system.
The Court held that an arbitral award will only be considered against public policy if it violates these fundamental principles.
In this case, the Court found that the arbitral award did not violate any fundamental principles of justice, morality, or fairness. Therefore, the Court held that the award was not against public policy and could not be challenged on that ground.

Significance:

The Supreme Court’s decision in Associate Builders vs. Delhi Development Authority clarified the concept of “public policy” within the context of Section 34 of the Arbitration and Conciliation Act, 1996.
The decision provides guidance to arbitral tribunals and courts in determining when an arbitral award can be challenged on the ground of public policy.
The decision also reinforces the importance of respecting the finality and enforceability of arbitral awards, as long as they are not against public policy.

It is also interesting to note that the interpretation of “public policy” has been both wide and narrow by the judiciary, and hence there is complexity and ambiguity involved when domestic and international arbitration intersect. For example, in Renusagar Power Co. Ltd. v. General Electric Co. (1994), the concept of public policy with respect to foreign awards was constructed in a narrow manner. Whereas in ONGC vs. Saw Pipes, the Apex Court held that in a case where the validity of an award is challenged, there is no necessity of giving a narrow interpretation to the term public policy of India.

Limited duration of time for making the application

Section 34 (3) provides for a time duration of three months and extension of thirty (30) days to make the application, but not thereafter. It is quite shorter when compared to the Limitation period in civil matters or money decrees.

However, there can be instances where the applicant, despite his best efforts, could not access documentary evidence or favourable information to prove his case and is therefore prevented from making the application within the said period.

Expeditious disposal of the Application under Section 34

Section 34(5) mandates the issuance of a prior notice to the other party before filing an application under Section 34 with the Court, along with an affidavit endorsing compliance with said requirement.

Section 34(6) prescribes a one year period for disposal of the application, starting from the date on which the notice referred to in sub-section (5) is served upon the other party. This provision was also made to overcome undue hindrance and delay in enforcing a just and fair arbitral award.

Enforcement of arbitral award

Arbitration awards play a pivotal role beyond merely resolving disputes; they embody the core principles of trust, expertise, and justice within the arbitration system, surpassing conventional adversarial litigation norms and therefore, without their smooth enforcement or execution, the spirit of ADR will greatly suffer.

Issues related with enforcing the arbitral award

Filing of stay application in appropriate court

Section 36 prescribes for the process of enforcing the arbitral award. Prior to the amendment made on October 23, 2015, the position of law was laid down in National Aluminium Company Ltd. vs. Pressteel & Fabrications (P) Ltd. and Anr. (2004) and Fiza Developers Case, that the moment an application challenging the arbitral award was made under Section 34, an implied automatic stay was imposed on the enforcement of an award under Section 36 of the Arbitration Act. There was no need to file an application for obtaining a stay separately once the award was challenged but the judicial approach changed in the Hindustan Construction Ltd vs. Union of India (2019) judgement, where it was held that the award debtors will not be able to escape their liability by simply filing an application (with grounds for obtaining a stay, showing how irreparable damage or injury will be caused to the defeated party) under Section 34 as there will be no automatic stay of the award.

Court backlog

The spirit of ADR (to avoid the court and a long period of litigation) gets defeated because the party, even after obtaining the award, is now approaching the court for its successful execution and therefore has to face the long backlog and additional cost.

No clarity of judicial Intent

After the expiration of the limitation period of three months (30 days-of the condonation of the delay period), the award becomes final and can be enforced as a court decree.

However, it is interesting to note after a deep reading of Section 34 and its interplay with Section 36, that the judicial intent appears to be dual and contradictory, as the arbitral tribunal is not empowered under the Amendment to replace the judicial courts as the Act does not provide the arbitral tribunal any power to enforce its own award like the courts.

Conclusion

At last, there is always a remedy that is kept alive for the defeated party to approach the Court—to appeal an award on grounds wide open for different interpretations. However, the process and timing for the stay application are being narrowed down to make it expeditious so as to make it appear that India is an Arbitration friendly country. But seeing the long backlog of the courts, the road towards these mission statements appears to be full of many twists and turns the legal fraternity has yet to encounter.

Recognising the complexity of the subject, it was suggested that two recommendations might be helpful. These recommendations stem from the understanding that the subject is both intricate and constantly developing.

Arrive at a global standard of “public policy.”
Dedicate additional benches for hearing applications and appeals with regard to arbitral awards.
Introduce penalty for filing challenges and applications on weak or unmaintainable grounds.

References

Doctrinal and non-doctrinal legal research

By

Rachit Garg

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July 5, 2024

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focusing — Image Source: https://bit.ly/3djUGRV

This article is written by Upasana Sarkar. This article deals with doctrinal legal research and non-doctrinal legal research and provides a comprehensive understanding of their concept, purpose, importance, methodology, advantages, and disadvantages. It also provides an extensive and detailed study of these two categories of legal research and their distinctions.

Table of Contents

Introduction

Research means a thorough study of a particular matter by collecting information about it. The expression ‘research’ is derived from the French word ‘recherché’, which means ‘thorough inspection’. Research is the systematic and methodical examination of data using scientific methods for investigating and analysing a particular research problem. Research is done for exploring and understanding new problems, finding solutions for them, or acquiring new knowledge on an existing matter. It helps in gathering information and evidence so as to reach a definite conclusion.

Legal research is a systematic method of studying legal problems in a scientific way that involves discovering new facts, validating existing material, analysing sequences and inter-relationships between the subjects, and developing tools and concepts based on the information. The main aim of legal research is to modify concepts, test hypotheses, and foster just and equitable government rules. The importance of legal research has far-reaching implications. It influences law-making decisions, addresses commercial difficulties, supports judicial decisions, improves legal knowledge, provides legal awareness, guides legal practitioners, and enhances the justice system of the country.

In the words of Collis and Hussey,” Research is basically a systematic, thorough, and rigorous process of investigation that increases knowledge.” Legal research focuses on the study of legal problems and issues. It deals with a systematic study of legal statutes, principles, regulations, and cases. It is used for solving legal problems, supporting legal arguments, providing guidance for legal decision-making, and enhancing the justice system. Legal research deals with activities like gathering information, updating legal knowledge, altering those that are required, and introducing them in our legal system. It plays an important role in framing a relationship between law and society by introducing new rules, Codes, and Acts. This legal research is also done in a scientific field. It assists in discovering new facts, verifying the old facts, introducing new knowledge, analysing both the old and new ones, explaining them in a proper manner, and developing them.

Types of legal research

Legal research has been mainly classified into two distinct kinds. One is the doctrinal legal research that helps in analysing the theoretical aspects of legal issues, and the second is the non-doctrinal legal research that helps in discovering the practical problems and finding solutions for those legal problems.

Doctrinal legal research

Doctrinal legal research is one that is conducted on a legal proposition through the analysis of the existing provisions of the statutes and cases using the power of reasoning. This research is theoretical in nature as its detail legal concepts and principles are from various sources like legislation, precedents, and others to inspect them for reaching a valid conclusion.

The origin of doctrinal research came from the term ‘doctrine,’ which means ‘principle’ or ‘normal governing tenet’. It is done through a rigorous and systematic study, analysis, and critical evaluation of legal doctrines, rules, concepts, and their inter-relationship. This research is also known as ‘Pure Theoretical Research’.

In doctrinal legal research, the research is mainly a library-based study where statutes, judgements, magazines, articles, legal journals, and others could be found. Relevant information and data on a particular legal problem can be collected, and after going through them, it would be easier to reach a conclusion by critically analysing them. This research is done by following traditional legal research methods. This research helps in analysing, interpreting, and synthesising this information and data to answer a legal problem or to develop new legal theories.

Definitions of doctrinal research given by jurists

Prof. S. N. Jain observed, “Doctrinal research involves analysis of case law, arranging, ordering, and systematising legal propositions, and study of legal institutions through legal reasoning or rational deduction.”

According to Dr. S.R. Myneni, “doctrinal research means research that has been carried out on a legal proposition or propositions by way of analysing the existing statutory provisions and cases by applying the reasoning power.”

Objectives of doctrinal legal research

Doctrinal legal research is done by thoroughly reading theoretical study materials that are present in a library. So it is a book-based examination of different statutes, legal books, laws, and other legal literature and journals to find an unambiguous solution to a legal proposition. It is mainly based on secondary sources of information, as it does not require fieldwork or experiments. It begins with several legal propositions at the beginning, and the entire inspection is focused on determining the soundness of the underlying hypothesis. Its objective is to gain knowledge from different legal documents and additional sources and utilise them for deducing an adequate response to the legal question through logical and rational reasoning and interpretation.

Sources of doctrinal research

The sources that are mainly used in doctrinal legal research are conventional legal sources. The sources not only consist of statutes and enactments but also legal history, judicial pronouncements, reports of the committee, and so on. The Acts that have been passed by the Legislature also fall under this category of sources. The decisions and judgements of the various High Courts and the Supreme Court are also sources of doctrinal legal research. Sometimes, textbooks, commentaries, and periodicals are also referred to while doing doctrinal legal research, though they are not as authentic as original sources like the Acts, enactments, and cases that are published in authorised websites, books, articles, and journals.

Characteristics of doctrinal legal research

The essential characteristics of doctrinal legal research are as follows:

It involves the analysis of legal concepts or propositions.
It mainly used conventional sources of information.
It may include legal concepts derived from enactments, regulations, administrative guidelines, or judicial decisions.
It is used for doing research into legal concepts and principles in all kinds of cases, rules, and statutes. This research mainly focuses on legal information and data that are collected from legislation, law journals, reports, case laws, textbooks, and so on.
It is more concerned with research in law than research about law. This type of research focuses only on the current state of the law instead of seeking public opinion on how it should be.
It is closely linked with the doctrine of precedent.
It is research into the black letters of the law.
This research is based on secondary data that is available and relevant to the study.

Normative character of doctrinal legal research

The normative character of doctrinal legal research in a particular legal problem is concerned with the discovery and development of legal research and doctrines for publishing them in journals and textbooks that question what law is. The doctrinal legal research answers this question, which is, ‘What is law?’ The legal rules and regulations are normative in character, as they tell us how one should behave as an individual. It does not take any initiative to explain, predict, or even understand human behaviour, just to discuss it. In short, it can be said that doctrinal legal research studies about the goals of law and not what it is about.

Purpose of doctrinal research

The following are the purposes of the doctrinal legal research:

It constructs new legal principles, doctrines, and theories. Then it tries to verify its validity and add new knowledge to it.
It helps in maintaining continuity, consistency, and certainty of law in society.
It tries to resolve disputes with clients in various matters by applying statutory laws and related cases. The outcomes become more predictable as they are derived from established sources.
It provides assistance or advice to the courts or clients about applying legal doctrines to a particular case or legal event at the time when required.
It is also helpful for examining judicial opinions and determining which opinion is to be preferred. If there is a conflict in the decisions of the courts, it provides suggestions for resolving those conflicts.
It also provides tools for reaching a conclusion for lawyers and judges on multiple legal problems, usually for those who have very limited time at their disposal.
It is also useful for conducting comparative and historical inquiries that deal with a contrasting legal regime.
It is useful for developing legal theories that try to provide an explanation of how laws or areas of law fit together.
It helps in identifying problems or tensions within a body of law or a legal institution.
It also helps to separate helpful information from useless ones.

Tools used for doctrinal research

The various tools that are used for doctrinal legal research are as follows:

Legal resources include statutes, regulations, and others.
Legal commentaries, which include law journals and legal articles.
Legal reviews like academic journals.
Legal treaties.
Case laws by studying the judicial pronouncements.
Online resources include various online legal websites and blogs.
Government reports
Reports of committees

Methodology of doctrinal legal research

Doctrinal legal research focuses on theoretical research, that is, library-based study. Since it is the most common methodology of legal research, it is used by most researchers. The purpose of doctrinal legal research is to analyse, develop, and apply legal ideas and principles. It is also useful for interpreting legal documents, which include statutes, case laws, treaties, and regulations. It also provides a detailed understanding of the legal concepts, doctrines, and principles. The process for doctrinal research methodology consists of various steps, which are as follows:

Identifying the research problem: Identification of the research problem is the first stage. It involves selecting a research problem and then defining and clarifying its scope.
Collecting legal sources: This step involves gathering legal sources, which is necessary for research problems like statutes, case laws, regulations, and judicial decisions. This is the most important stage, as it requires extensive background reading on a particular problem using various sources like textbooks, dictionaries, encyclopedias, legal articles, treatises, and journals that are followed by footnotes.
Evaluating those legal sources: After collecting information regarding the research problem, the researcher must evaluate them to check their relevancy, trustworthiness, and credibility.
Analysing the legal sources: Once the evaluation is done, the researcher then must analyse the legal principles, ideas, concepts, and arguments. The researcher should take into consideration all aspects of the legal sources.
Synthesising legal principles: After analysing the legal sources, the researcher must synthesise the legal concepts and principles so as to frame a rational, logical, and coherent understanding of the legal problem.
Applying those legal principles: After synthesising, the final stage is to apply those legal principles that have been previously analysed and synthesised to frame the legal problem or question and to finally arrive at a conclusion.

Examples of doctrinal legal research

Some of the examples of doctrinal legal research are as follows:

Studying a series of court judgements to find out how a legal doctrine works and evolves over a period of time, like the ‘basic structure doctrine’ of the Indian Constitution.
Evaluating legal articles, textbooks, journals, commentaries, and other legal documents to understand the ways in which scholars and jurists are interpreting various aspects of the law.
Analysing a specific statute that has been implemented by the Legislature and its effect on different jurisdictions.

Merits of doctrinal legal research

Some of the advantages of doctrinal legal research are as follows:

Helpful at the initial stage: It is helpful for those who are doing research in the initial stage of legal education. It is a standard approach for finding information or performing legal inquiries. This method is much easier for most scholars and law students, as plenty of resources will be available for them.
Provides clarity to the researchers: It provides clarity to the researchers as it can give clear and concise answers to legal problems. It is mainly based on legal sources and authorised legal resources. It helps the researchers identify and analyse the legal principles, concepts, ideas, and doctrines systematically and objectively.
Cost-effective/less expensive method: It is a cost-effective research methodology, as data collection in this research does not require expenses. The data and information are easily available on online websites, libraries, and legal documents. The researcher can analyse that information and reach a particular conclusion without much hassle.
Consumes less time: It is also a time-efficient research methodology, as the legal sources are easily available. The researcher can at any time search for information on a particular matter and analyse it quickly and efficiently.
Foundation for further research: It also provides a foundation for further research on a particular legal issue. The researcher gets a clear picture of the research problem and can easily identify the loopholes, inconsistencies, and ambiguities present in that particular legal problem. These help the researchers discover new aspects, develop new theories, propose new legal reforms, and conduct further research if required.
Helps in professional development: It is helpful for the legal profession, which includes lawyers, judges, scholars, and law students, to enhance their knowledge and skills in legal fields. It gives them an extensive and deeper understanding of legal ideas, concepts, principles, and doctrines, which can be used by researchers to apply them practically in the real world.
Provides quick solutions: It is useful as it provides quick answers to legal issues that are at hand. The information can be analysed by collecting it from all the secondary legal sources that are easily available.
More predictable and easily manageable: Finally, it has greater control and predictability as it is based on established and authorised sources. It is easily manageable, as it focuses on the sources of jurisprudence.

Demerits of doctrinal legal research

Some of the disadvantages of doctrinal legal research are as follows:

Based on the theoretical method: Research is mainly done based on the library sources, which are theoretical in nature. It is highly technical, conservative, and trivial in nature, as it does not take into consideration the social, economic, and political impact of the legal issue in society. It only focuses on its theoretical interpretation and analysis of them. It lacks originality as compared to non-doctrinal legal research.
Subjective in nature: It is also subjective in nature, as the perception of one researcher may vary from another on the same legal problem. It means that another person can reach an entirely different conclusion about the same question.
Limited scope: It has a limited scope, as it is entirely based on the study of legal sources that, most of the time, does include the non-legal aspects, which can have an effect on the legal outcome. Since its scope is limited in nature, it may not provide a detailed and comprehensive understanding of a particular legal problem.
Lack of empirical evidence: It is not supported by empirical evidence, as it does not include the collection of empirical data through any interviews or surveys. Since it does not take into consideration the impact of legal rules and practices on individuals and society, its projection is far off from social reality. Therefore, it is devoid of any support from social facts and a practical understanding of the social problems. This research is not of much help, as social transformation cannot be achieved by following this method.
Biassed in nature: This research mostly relies on theoretical legal sources, which can be biassed at times towards a particular interpretation of the law. This might lead to biases due to a one-sided analysis of a particular legal problem.
It cannot be updated: Research using this method is mainly dependent on the laws that are being made and passed by Parliament. It does not take into consideration the social changes that are taking place in the day-to-day lives of the individuals living in society. So this research might be unable to provide a valuable result that will be helpful for all members of the community as a whole.
Difficulty in predicting the practical outcomes: This research primarily focuses on analysing and synthesising legal sources that the researchers get from past legal decisions and precedents. So, it sometimes may not be sufficient enough to predict future legal outcomes and provide support for legal decision-making in the future.
Limited applicability: The results of doctrinal research may be limited only to the individuals of a particular legal system and might not be applicable to other legal systems or jurisdictions.

Non-doctrinal legal research

Non-doctrinal legal research is based on practical facts. It is fact-oriented research. It has a much wider aspect than that of doctrinal legal research. Research is mainly done through fieldwork or first-hand study by a scholar. This research is not based on secondary sources. It requires the collection of primary data, which is required for that research problem. This research focuses on the practical aspects that explore the intersection between law and society. This research is also termed as ‘socio-legal research’, as it is conducted by combining social science and legal principles to study the interlink between law and society. It involves the empirical method of collecting information and then analysing the legal practices, institutions, and policies within their social context. It studies the impact of the law and these institutions and policies on an individual’s attitude and its effect on society.

Non-doctrinal research can also be referred to as ‘purposive’ research when discussing consequences, as it emphasises the effects of laws on people and society or the purpose of enacting a specific law. This study is mainly done from a multidisciplinary perspective. It implements various methods to conduct this research. After employing all the methods that are necessary for collecting primary legal information, a conclusion is drawn by the researchers. Some of the methods that have been used for conducting non-doctrinal research include observations, demonstrations, surveys, questionnaires, and interviews. This research gained importance when it became necessary to bring legal matters into the domain of actuality. It was believed that legal research must not only be based on theoretical studies based on written laws but also concentrate on its practical impact on society in the real world. Researchers, while selecting a topic, mainly focus on a legal factor, like law, and a non-legal factor, like social, economic, or political variables, and then examine and analyse their relationship and interconnection using data, which can either be quantitative or qualitative. The primary aim of this research is to find the workings of law in the practical world.

Objectives of non-doctrinal legal research

The main objective of non-doctrinal legal research is to provide insights into the complex inter-relationship of law and society and to find out the legal reforms and policies that can be used to promote greater justice and equity in society. It aims to study the workings of law in a social and cultural setting. It also tried to gain knowledge about how people use, understand, and follow a particular law in real life by observing and questioning them. It shows how a law is being practically implemented in the day-to-day lives of the individuals living in society.

Sources of non-doctrinal research

Non-doctrinal legal research provides an adequate framework for determining the impact of the law on society and institutions. Primary data and information, or first-hand research, is required for analysis in non-doctrinal legal research methods. Primary data are collected through the following methods: such as observations, interviews, questionnaires, or schedules.

Characteristics of non-doctrinal legal research

The essential characteristics of non-doctrinal legal research are as follows:

It is conducted to find out the effect of non-legal events on the process of law-making or legal provisions.
It tries to determine and evaluate the extent to which the different variables influence the legal process.
It tries to identify the effect of legal decisions on individuals in society.
It tries to identify the societal consequences of any legislation or legal principle that can be traced.
It determines the correlation between the law and other non-legal facts.

Purpose of non-doctrinal research

The following are the purposes of the non-doctrinal legal research:

It alters the research tools to cope with the present legal problems or finds out various measures to resolve different social issues.
It organises society in a systematic manner and maintains peace by tracing social evils and eradicating them.
It finds out the consequences of the legal decisions and judgements that the courts pass and their effect on society.
It assesses the impact of non-legal events like technological improvement, economic development, and technical changes on legal decisions.
It also identifies and assesses the magnitude of variable factors that influence the decision-making process, like the effect of capital punishment awarded by the courts to convicts of dangerous crimes at a certain place at a given time.
It traces the practical consequences of the legal principles for society.
It finds out whether a law that has been passed is actually helping the people of society in the real world.

Tools used for non-doctrinal research

The various tools that are used for non-doctrinal legal research are as follows:

Surveys
Judgements
Schedule
Sampling
Case study
Published sources
Interviews

Methodology of non-doctrinal legal research

Non-doctrinal legal research focuses on field research. It is based on first-hand information. The information in this research was collected by observing and experimenting. The method includes surveys, interviews, questionnaires, and others. After the collection of data, it could be presented in the form of bar graphs, pie charts, and others. The process for doctrinal research methodology consists of various steps, which are as follows:

Identifying the research question: It involves the identification or selection of the research problem and clarifying the scope of the research.
Collecting data: This step involves gathering information and measuring data on variables of interest, which is necessary for research problems. It should be done in such a systematic way that it becomes easier to answer the research question, test hypotheses, and evaluate the end result. This method emphasises the collection of primary data to ensure that the information is accurate and proper. Surveys done in a locality or interviews taken from lawyers, judges, legal professionals, and other people living in society who are affected by a certain legal problem are ways of collecting data. It also includes groups with community organisations, advocacy groups, and participant observation at court hearings and other legal proceedings.
Classifying data: After collecting data, the next step is to classify that information. It means the process of arranging data into homogeneous classes in accordance with the common features present in the data. The main objective of the classification of data is to organise information in such a manner that similarities and differences can be quickly understood.
Analysing information: Once the data are classified properly into groups with similar features, the researcher then analyses them. The researchers reduce the data to a story and then analyse it. This process of analysing data helps reduce the burden of large chunks of data by breaking them into smaller fragments that are easily understandable.
Findings: This step involves the result of the outcome that the researchers found after analysing the data that has been collected. Its goal is to use this information to address the research question that is stated at the start, even if the end result contradicts the hypothesis.
Conclusion: This is the last step of non-doctrinal legal research. It may be concluded that a reformation is needed in the legal system for the welfare of society. It can also be used to portray that certain rights of communities have been violated. Therefore, greater attention should be given to rectifying them, as well as examining how social issues influence legal decisions.

Examples of doctrinal legal research

Some of the examples of non-doctrinal legal research are as follows:

Conducting interviews and surveys with incarcerated individuals to study the impact of criminal justice policies on the real world, like the effect of capital punishment on the offenders.
Investigating human rights abuses in a particular region or locality through field work involves questioning and interviewing those whose rights are being violated.
Evaluating the effectiveness of the regulations that have been implemented for the protection of the environment and collecting information about pollution levels.

Merits of non-doctrinal legal research

Some of the advantages of non-doctrinal legal research are as follows:

Based on field research: Unlike doctrinal legal research, this is field-based research. It is not limited to theoretical studies only. It has a much wider scope than the doctrinal legal research methodology. It takes into consideration the social, economic, and political impact of the legal problems of society. Since it is field-based research, it is not dependent on secondary sources of information.
Determines the practical efficiency of laws: It helps in determining the practical efficiency of laws in all the non-legal sectors. It highlights the gaps between legislative goals and practicality. It shows the difference between a statutory law mentioned in the statutes and its real applicability in society. It also provides a detailed and comprehensive understanding of a particular legal problem.
More credible: Unlike doctrinal legal research, this research is more credible as it is based on first-hand information, which is the primary source of data.
Improves and simplifies policy making: This research shows what laws society requires, where laws are lacking, what laws are needed to be implemented, and what the reactions of individuals are to a particular law. This detailed and in-depth research helps in providing assistance and improving and simplifying policy making.
Always updated: Research in this method not only deals with the laws that have been already passed but also with those that need to be implemented for the welfare of society. It takes into consideration the social changes that are taking place in the day-to-day lives of individuals living in society. It genuinely provides a valuable result that will be helpful for the lawmakers as well as the individuals living in society.
Becomes easier to predict practical outcomes: It helps in analysing the practical impacts of a law that is being implemented in society. It is not only based on past legal decisions and precedents but also on recent laws and their effect on the people of society. Therefore, it becomes easier to predict future legal outcomes and provide support for legal decision-making in the future.
Provides expert advice: It offers expert advice and important input about various social issues to legislators, judges, and policymakers to improve the development, enforcement, and interpretation of laws.

Demerits of non-doctrinal legal research

Some of the disadvantages of non-doctrinal legal research are as follows:

Time-consuming: Since it is field-based research work, it consumes more time than doctrinal legal research work. This research is based on real facts, and therefore, sources are not easily available. The researchers need to visit different places to collect information. After collecting the data, the researcher analyses them properly and comes to a definite conclusion. Therefore, this research cannot be done quickly.
Expensive method of research: Unlike doctrinal legal research, this research is an expensive method of research. It is not a cost-effective research methodology, as it is not only based on the data that is easily available on online websites, libraries, and legal documents, but it also requires fieldwork. The research needs money to go to different places to collect primary evidence. He has to face a lot of hassles while doing this research.
Needs special training for doing this research: The basic research tools of data collection cannot be employed in this research work. It needs a special kind of training to design and employ tools for collecting information. It requires special knowledge, skill, efficiency, and training from the planning stage to the execution stage. It entails greater commitments of time as well as energy to produce meaningful results.
Needs strong background research: Before starting a non-doctrinal research work, a strong background research is necessary to get a detailed understanding of a particular matter. If a researcher is weak in doctrinal legal research, it would be difficult for him to conduct non-doctrinal legal research in a meaningful and proper way.
Does not provide instant results: Unlike doctrinal research work, this research does not provide instant results as it takes a lot of time to understand a particular problem and its effect on people, find a solution to the problem, and state the necessary measures to solve the problem.
Needs financial support: This research method needs a financial backup. It is difficult for a researcher or a law student belonging to a poor family to conduct non-doctrinal legal research work. The non-availability of funds is one of the main shortcomings of this research.
Not easily manageable: It is not easily manageable, as it is not based on established and authorised sources only. It deals with actual facts, which requires the collection of primary information by visiting different places, classifying them in different categories, and finding an appropriate solution.
Difficulty in collecting first-hand information: Furthermore, acquiring primary data on some controversial or delicate issues may be a difficult and risky task. People have varying levels of understanding of information, and their judgement may involve a certain degree of bias and prejudice, which may also confuse the researchers at times.

Difference between doctrinal and non-doctrinal legal research

The doctrinal legal research and the non-doctrinal legal research are closely connected with one another. The legal research falls somewhere in between these two categories. In doctrinal legal research, legal doctrines and principles dominate the research work, while in non-doctrinal legal research, this legal doctrine is just a variable of the research work. A clear difference between them is not visible. Still, some distinctions can be made between these two types of legal research.

The difference between doctrinal and non-doctrinal legal research can be understood by reading the following points:

S. no.	Doctrinal legal research	Non-doctrinal legal research
1.	Doctrinal legal research deals with legal doctrines and principles.	Non-doctrinal legal research emphasises the practical impact of the law on society.
2.	In doctrinal research, the research is mainly dependent on traditional or conventional sources of data.	In non-doctrinal research, the research is not solely dependent on traditional sources but also includes current problems at hand.
3.	Doctrinal legal research is library-based theoretical research.	Non-doctrinal legal research is field-based socio-legal research.
4.	Doctrinal research work is based on secondary sources of data, which include textbooks, legal articles, commentaries, and others.	Non-doctrinal legal research is based on primary sources of data, which include surveys, interviews, and case studies.
5.	The origin of doctrinal legal research came from the analytical or positivist school of thought.	Non-doctrinal research comes from the realist school of thought.
6.	The scope of doctrinal legal research is narrower as compared to non-doctrinal legal research, which deals with law in isolation.	The scope of non-doctrinal legal research is much wider as compared to doctrinal legal research, as it gives a detailed and comprehensive understanding of law.
7.	Doctrinal legal research is used by the advocates for framing legal arguments and policy recommendations.	Non-doctrinal legal research is used by advocates in forming policy decisions for social and legal reforms.
8.	Special training is not required for doing doctrinal research.	Non-doctrinal research needs special training, a conceptual framework, particular skills, and knowledge of other disciplines.
9.	Doctrinal legal research is mainly concerned with legal propositions.	Non-doctrinal legal research is mostly concerned with social values and individuals.
10.	In doctrinal legal research, it is not required to collect first-hand information.	Non-doctrinal legal research requires the collection of first-hand information for case studies.
11.	A researcher doing doctrinal legal research only answers questions about one or two legal propositions.	A researcher doing non-doctrinal legal research answers more questions as it involves large areas of research work.
12.	Doctrinal legal research is less expensive and consumes less time.	Non-doctrinal legal research is a more time-consuming and expensive method.
13.	The basic sources of the doctrinal research are taken from established sources like legal norms and principles.	Non-doctrinal research incorporates interdisciplinary perspectives and empirical data to provide a significant understanding of the law’s impact on society.

Conclusion

This article gives a complete understanding and a detailed comparison of doctrinal and non-doctrinal legal research. It shows the advantages as well as the shortcomings of both the legal research. While dealing with a legal problem, a researcher needs to know the background of that problem. So it is important for him to do both the doctrinal research work and the non-doctrinal research work to understand its root cause and gain in-depth knowledge about it. On one hand, doctrinal legal research provides a foundation for the problem by analysing all the existing legal materials and guidelines, and on the other hand, non-doctrinal legal research helps to broaden the perspective by exploring its impact on the real world. Therefore, it can be seen that the combined approaches of both legal research provide a more comprehensive understanding of law and its effect on the people of society. It will be easier for the researchers to first identify the areas, do a thorough inspection of a particular legal problem, and then finally provide measures for reformation after analysing all the information. Before providing a solution, he needs to examine the legal principles and doctrines through doctrinal legal research and the practical impact on the society where the law is in operation by following non-doctrinal legal research methods.

Therefore, both types of legal research are equally important to identify the strengths and loopholes of the law. Doctrinal as well as non-doctrinal legal research are required to find solutions to the emerging problems of society within the framework of law. Both studies must be given equal importance for the development and improvement of the laws and for solving legal issues from time to time. A combination of these two categories of research will be helpful in accomplishing the goals and objectives of the researchers in a proper manner. A researcher who has thorough knowledge and is aware of the benefits and shortcomings of these two types of legal research will take the necessary measures to equip themselves by using alternative research methodologies and with the necessary skills to enable themselves to comfortably meet their research objectives. Hence, it can be concluded that both doctrinal and non-doctrinal approaches contribute distinctively to the advancement of the law and legal practices. They act as an important factor, serving as a driving force behind positive societal change and equitable governance by providing justice to the people.

Frequently Asked Questions (FAQs)

What are the stages involved in legal research?

The legal research involves the following stages:

Discovering new facts: Legal research helps in finding new facts or information within the legal domain.
Verifying old facts: It tries to verify the already established facts to ensure accuracy and relevance.
Analysing the facts: It analyses the facts and finds out the connections and inter-relationships between the legal elements.
Providing an explanation: After analysis, it provides a proper explanation and conclusion to a legal problem.

What are the objectives of legal research?

The main aim of legal research is to contribute to the advancement of legal understanding and different ways to overcome legal problems. Some of the objectives of legal research are as follows:

Verifying the already existing concepts and knowledge.
Adding more information to the already-existing knowledge.
Exploring new arenas to gain insights and explanations.
Testing of hypotheses about a legal proposition.
Examining legal history and contributing to its development.
Analysing the ambit of new legal reforms and legal institutions.
Evaluating the merits and demerits of existing laws and suggesting improvements for their development.
Assessing the interaction between legislative and judicial bodies and offering suggestions and recommendations for collaboration.

What is the significance of legal research?

The significance of legal research is, as follows:

It works as a catalyst for achieving positive social change and the pursuit of justice.
It helps the government to enact new laws that will be beneficial for economic and social transformation.
It helps in solving problems and challenges faced by businesses and industries.
It helps in spreading legal awareness in society and promoting informed decision-making.

References

Role of AI in autonomous spacecraft navigation systems

By

Vanshika Kapoor

-

July 4, 2024

0

This article has been written by Pathipati Sahithi Chowdary pursuing a Remote freelancing and profile building program from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

If a machine can interpret data, learn from it, and apply that knowledge to do particular tasks, then the machine is said to have artificial intelligence.

Artificial intelligence is used by many services that surround us today, such as Siri, the way emails are sorted into spam and inbox folders, and how you landed on this article by searching a few specific keywords on the Google search engine. They also play a crucial role in a few lesser-apparent situations, like disease detection and the screening of job applications. Whether we realise it or not, we are all exposed to AI.

Though AI has recently gained popularity on a broader scale, scientists, engineers, and science fiction writers have been thinking about it for a century.

The popular movie Interstellar featured two artificial intelligence robot characters, “TARS” and “CASE,” who are seen planning courses to various destinations, calculating the spacecraft’s speed and spin, taking control of the spacecraft, and manoeuvring through space with ease. They were seen doing this all while speaking and reacting with an element of humour and a touch of robot charm. This kind of AI is more of an artificial general intelligence robot. A possible general AI is still a long way off. We currently deal with more task-specific AI. So, the question of robots endangering humans is a long shot.

Machine learning

Be it humans or machines, learning is the most essential phase in achieving anything. This process of teaching a machine to perform a certain activity is known as “machine learning.”

Supervised learning, unsupervised learning, and reinforcement learning are a few machine learning techniques.

Supervised learning is a process of learning with training labels provided by a supervisor. Training is done on a large set of data, and then the machine is tested on some more data to evaluate the progress made. The machine learns from mistakes; each time it makes an error, the input weights are updated using the update rule.

Unsupervised learning is learning without training labels provided by a supervisor; instead, it uses labels from the environment around it; this is also called clustering or grouping. In this technique, learning happens by clustering or grouping based on properties and attributes. These specific clusters are called K-clusters. An algorithm called K-means clustering is used to predict these clusters based on the averages of the data. After prediction, AI will have to learn to update its beliefs to match its observations of reality. Another way of unsupervised learning is representational learning, where two images are compared to see if they are similar or not.

Reinforcement learning, in simple terms, is learning by doing to achieve a difficult goal. This technique is helpful when we wish to teach AI to perform a particular task. Once the task is complete, we can inform AI that it succeeded and ask them to explain how it did it. Reinforcement learning makes use of a concept called credit assignment to navigate which actions helped to get the work done. Values are assigned to different states, and the best policy is selected for task completion in the most optimised way.

Spacecraft navigation

We spend billions of dollars every year learning more about the cosmos and our place in it. Space technology is one area where precision and accuracy are crucial. Although there is a long way to go for the construction of robots like TARS and CASE from Interstellar, robotic rovers like Perseverance and Curiosity are one of those that employ artificial intelligence and machine learning in many of their operations.

Ground-based tracking systems were mostly employed in the past for spacecraft navigation, and they had their share of problems. Data transmission between the spacecraft and the ground stations is slow due to the great distance involved. Precision and cost reduction are generally key factors in these endeavours, so the technology of ground-based radiometric tracking began to wane.

Autonomous spacecraft navigation and AI

The notion of the spacecraft having little to no communication with the ground stations became the new trend in the spacecraft navigation field to adjust the delay issues. This idea of the spacecraft autonomously navigating itself through space also required significant contributions from multiple engineering disciplines and computer science.

In 1998, NASA launched the Deep Space 1 (DS1) mission. This was a test flight that flew by an asteroid and a comet. It had autonomous navigation software called AutoNav. AutoNav allows a spacecraft to autonomously adjust its course by analysing images of its area of vision. Deep Space 1 laid the foundation for later missions to travel space more efficiently and autonomously. This ability of the computer to extract high-level understanding from images is the goal of computer vision (a type of artificial intelligence).

Computer vision in space

Computer vision, a subfield of artificial intelligence, plays a crucial role in the navigation systems of robotic rovers exploring extraterrestrial environments. Techniques like convolutional neural networks (CNNs) and perspective-n-point (PnP) are employed to extract vital information from visual data captured by the rovers’ cameras.

CNNs are a class of deep neural networks specifically designed to process visual data. They are particularly adept at recognising patterns and features in images and videos. In the context of rover navigation, CNNs are used to identify and track landmarks, such as rocks, craters, and other geological formations. This information is then used to determine the rover’s position and orientation relative to its surroundings.

PnP is a computer vision technique used to estimate the position and orientation of a camera (or other sensor) relative to a known set of 3D points. In the case of rover navigation, the known 3D points are typically landmarks identified by the rover’s cameras. PnP algorithms use the 2D coordinates of these landmarks in the image and their known 3D coordinates to calculate the rover’s pose (position and orientation).

The combination of CNNs and PnP enables rovers to accurately navigate their surroundings and perform tasks such as autonomous exploration, sample collection, and hazard avoidance. These techniques are essential for enabling rovers to operate autonomously in complex and unpredictable extraterrestrial environments.

Computer vision is a rapidly evolving field, and new developments are constantly emerging. As computer vision techniques continue to advance, rovers will become even more capable and versatile, paving the way for even more ambitious space exploration missions in the future. There is a significant amount of research focused on developing intelligent robotic spacecraft that use computer vision to track and determine the motion of unknown targets, such as space debris or retired missions, solely based on vision. Artificial neural networks are the result of connecting many perceptrons. A perceptron is a programme that mimics one neuron. As the number of neurons grows in the input layer, these networks become more complicated and are hence used to solve more intricate problems.

Path planning and control

Path planning involves calculating the best trajectory to follow, from the current position to the destination, while ensuring collision-free navigation. A lot of research has also been done in path planning, which relies on techniques like artificial intelligence, vector fields, and deep reinforcement learning methods to determine the trajectory towards a target object, such as space debris. To execute the desired trajectory calculated through path planning, spacecraft need to activate their thrusters to follow this path. Advanced control theories are essential for generating and maintaining the desired motion.

AstroSLAM is a space-adapted version of SLAM software that helps in finding out the spacecraft’s relative position.

Along with spacecraft navigation, AI is extensively used in space exploration. AI can sift through mountains of data from telescopes and find patterns in them. The recent discovery of Kepler-90i is a work of AI. AI algorithms were trained to spot minute changes in the starlight that could indicate the presence of a planet passing by.

AI’s crossover applications

Artificial intelligence (AI), initially developed for space exploration, has transcended its extraterrestrial origins to permeate various domains back on Earth. Once confined to the realm of rocket science and satellite navigation, AI has charted a bold course into uncharted territories, revolutionising industries and redefining human experiences.

In the realm of healthcare, AI has emerged as a game-changer. From analysing medical images to identify diseases at an early stage to developing personalised treatment plans, AI is transforming the way healthcare is delivered. By leveraging deep learning algorithms, AI can process vast amounts of medical data, leading to more accurate diagnoses and more effective treatments.

Transportation has also witnessed a profound transformation due to AI. Self-driving cars, once a futuristic concept, are now a tangible reality, promising safer and more efficient travel. AI-powered traffic management systems optimise traffic flow, reducing congestion and minimising travel time. Additionally, AI is being harnessed to develop innovative solutions for public transportation, making it more accessible and convenient for commuters.

In the financial sector, AI is driving a wave of innovation. From automating repetitive tasks to detecting fraudulent transactions, AI is transforming banking operations. AI-powered chatbots provide instant customer service, offering personalised advice and assistance. Moreover, AI is revolutionising risk assessment and portfolio management, enabling financial institutions to make more informed decisions.

Retail and e-commerce have also been disrupted by AI. AI-driven product recommendations, personalised marketing campaigns, and virtual fitting rooms are enhancing the customer experience and increasing sales conversions. AI-powered supply chain management systems optimise inventory levels, reduce shipping times, and improve overall efficiency.

The entertainment industry has not been immune to the transformative power of AI. AI-generated content, such as music and art, is blurring the lines between human creativity and machine intelligence. AI-powered virtual reality experiences are taking entertainment to the next level, immersing users in captivating and immersive worlds.

AI’s impact on education is equally significant. AI-powered tutoring systems provide personalised learning experiences, adapting to each student’s needs and learning style. AI-driven language translation tools break down language barriers, making education accessible to learners worldwide.

In summary, AI’s crossover applications have transcended the boundaries of space exploration, touching virtually every aspect of our lives. From healthcare and transportation to finance, retail, entertainment, and education, AI is transforming industries, enhancing experiences, and unlocking new possibilities for the future.

Marine biology

AI algorithms designed for star matching in the Hubble space telescope are now being used to track endangered whales by recognising the unique patterns of spots on their skin. Biologists collaborated with NASA to adapt the AI algorithm originally developed for the Hubble space telescope to identify these patterns, which are as unique to whales as fingerprints are to humans. This technology has also been adapted to identify other sea creatures with unique spot patterns. This innovative technology has transformed the way we study whale sharks. Researchers can now catalogue sightings and track their movements across the oceans with great accuracy. All the statistics on the encounters and sightings of whale sharks using this technology are being documented in a database called the Sharkbook. This wealth of data provides invaluable insights into the behaviour and population trends of these majestic creatures.

Medical imaging

The benefits of AI reach far beyond space exploration and wildlife, touching many areas of our daily lives. This crossover from space technology to marine biology highlights the incredible versatility of AI. For instance, AI technology originally developed for space missions is now being used in other fields to great effect. Take medical imaging as an example. The same AI algorithms designed for image recognition in space telescopes are now helping doctors detect diseases like cancer at their earliest stages. These AI systems can analyse medical images with great precision, spotting variations that might escape even the most trained human eyes. This capability helps in earlier diagnosis and significantly improves treatment outcomes for patients.

Ethical considerations

As we keep tapping into the power of AI, we’re opening doors to tackle some of the biggest challenges humanity faces and explore new horizons both here on Earth and in space. Efforts should be made to create ethical guidelines and standards for AI development and use, with the help of technologists, policymakers, and ethicists, so that we can establish a framework that encourages the responsible use of AI and ensures that it has the best possible impact on society.

Conclusion

The future can be a collaboration of both artificial intelligence and actual intelligence working to make the world a better place. Integration of AI into space technology would increase the efficiency of these missions. AI’s influence on spacecraft navigation could be revolutionary in addressing issues like space debris, which is a major threat to orbiting satellites. With AI, autonomous navigation can be more sophisticated and capable, helping space agencies successfully lead various missions like interplanetary missions, flybys, robotic rovers, etc. Ultimately, this results in us understanding a bit more about ourselves and our place in the universe.

References

Committee of creditors- roles, responsibilities & functions

By

Vanshika Kapoor

-

July 4, 2024

0

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

This article has been edited and published by Shashwat Kaushik.

Introduction

India is a country currently in the process of establishing a robust market economy that requires the implementation of modern, well-drafted laws to replace the outdated ones from the past centuries. So, it is essential to have efficient and effective organisations that enforce these new laws.

Companies in India are registered under the Company Act, 2013, which provides a legal framework for the incorporation, operation and governance of companies. Similarly, the Limited Liability Partnership Act, 2008; the Micro, Small and Medium Enterprise Development Act, 2006, Partnership Act, 1932, etc. are there for the registration of different types of business entities. However, there were no proper provisions for resolving insolvency, liquidation or bankruptcy for these business entities.

In December 2015, the government passed a new law called the Insolvency and Bankruptcy Code Bill. This law was created by a special group called the Bankruptcy Law Reforms Committee, which works under the Ministry of Finance. After asking the public for their opinions and getting suggestions from a group of lawmakers, both Parliament’s houses agreed on the Insolvency and Bankruptcy Code, 2016. This became official on May 28, 2016, and was put into action on August 5th and August 19th, 2016.

The old laws for dealing with financial problems were outdated and not very helpful. But now, the Insolvency and Bankruptcy Code, 2016 is here to replace them. This new law is great because it helps companies, individuals, partnerships, and other groups that are having money troubles. It focuses on helping the people or companies that are owed money (creditors) sort out these problems. It’s a big change that was really needed.

Who is a creditor

Before understanding the committee of creditors, first we need to understand who is a creditor and why he is most important for a company.

In the realm of finance and accounts, a creditor is an individual, financial institution, business owner, organisation or entity that lends money or extends credit in exchange for receiving money in the future, with or without any additional interest. In simple terms, we can say that a creditor is an entity to whom money is owed. The debtor owes money to the creditor.

If you have ever purchased a car or home through a loan, then you must know about the concept of debtor and creditor. In this case, you are the debtor, and the financial institution where you took the loan is the creditor. A creditor can be anyone to whom you owe an outstanding balance; however, typically, it means a financial organisation or any business entity.

But do you know that there are two types of creditors? One is a secured creditor, and the other is an unsecured creditor.

The division of creditors is only based on the asset given by the debtor as collateral. Secured creditors always lend credit when the debtor pledges any asset, like a title deed, salary slip, gold ornaments, etc., as collateral to his debt so that the creditor can recover his amount from that asset if the debtor becomes bankrupt or insolvent.

Whereas, the unsecured creditors are mostly at risk, as they do not take any collateral from their debtors. There are very few chances to recover the entire amount from the debtor when the debtor becomes bankrupt.

But as per the Insolvency and Bankruptcy Code (IBC) 2016, creditors can also be divided as financial creditors (FC) and operational creditors (OC).

According to Section 5(7) of the Insolvency and Bankruptcy Code 2016, a financial creditor is defined as “a person to whom the debt is owed, including a person to whom such debt has been legally assigned.” For example, banks, financial institutions, etc.

Whereas according to Section 5(20) of the Insolvency and Bankruptcy Code 2016, an operational creditor is defined as “a person to whom the debt is owned, which includes the person to whom such debt has been legally transferred.” It means they are the entities to whom money is paid in return for the services they have delivered. For Example: vendors and suppliers, employees, government, etc.

Both the creditor and the debtor play very important roles in every business, as they can impact the cash flow of your business. They affect the assets and liabilities on the balance sheet of any company. When a company lend credit to another company, then the credit can be considered as an asset. But the debts taken by the company always count as liabilities.

Committee of creditors

When we hear the word “Committee of Creditors”, the one thing that comes to mind is that there may be some group of creditors who hold a round table conference to discuss any banking-related matters in a company.

But what exactly does the committee of creditors mean? Where is it written? And why do they form?

The answer is that during the bankruptcy of a company, a group of people represents the company’s creditors, driving the insolvency process under the Insolvency and Bankruptcy Code, 2016 (‘IBC’). In 2016, the law of insolvency and bankruptcy was codified in the form of the Insolvency and Bankruptcy Code, 2016 (IBC Code). According to this code, when the company defaulted in paying a debt for an amount over ₹ 1 crore, all the creditors of such a company were created into a group that is referred to as the Committee of Creditors ( ) of that company.

The Committee of Creditors is created immediately after the initiation of the insolvency process. The Committee of Creditors (COC) spearheads the Corporate Insolvency Resolution Process (CIRP), very effectively taking over control from the former Board of Directors of the debtor-company.

The Committee of Creditors typically consists of financial creditors who have voting rights based on the proportion of their dues. Operational creditors may also be a part of the COC, but their participation and voting rights are often limited unless they meet certain thresholds.

Composition of COC

The Committee of Creditors is a decision-making body in the Corporate Insolvency Resolution Process, having all financial creditors of the corporate debtor. Section 21 of the IBC deals with the committee of creditors.

Sec-21(1) of the code says, “The interim resolution professional shall after collation of all claims received against the corporate debtor and determination of the financial position of the corporate debtor, constitute a committee of creditors”.

But there is another provision, too. The financial creditor or the authorised representative of the financial creditor should not be a related party to the corporate debtor. But if it is a related party, then it shall not have any right of representation, participation or voting in a meeting of the committee of creditors.

Roles and responsibility of COC

Within seven days of its formation, the Committee of Creditors must convene its initial meeting, during which it has the authority to designate a Resolution Professional or replace the existing Interim Resolution Professional with another, contingent upon obtaining a vote representing no less than sixty-six percent of the voting shares held by the financial creditors. But, in Dharmendra Kumar vs. IBBI & Ors., NCLAT held that COC can appoint the IRP as RP only after obtaining consent from the proposed person.

Decision making

When it comes to the resolution of the debtor’s insolvency, the Committee of Creditors is the primary and supreme decision-making body. It also takes important decisions regarding the future of the company.

Otherwise, as per a separate provision in the Insolvency and Bankruptcy Code of 2016, all decisions made by the Committee of Creditors (COC) must receive approval from at least fifty-one percent of the financial creditors’ voting shares. In the case of K. Sashidhar vs. Indian Overseas Bank & Ors. (2019), the honourable Supreme Court clarified that the law does not authorise the Resolution Professional (RP), the National Company Law Tribunal (NCLT), or the National Company Law Appellate Tribunal (NCLAT) to overturn the COC’s commercial decisions, as no such provision has been established by the legislature.

Protection of interests

The Committee of Creditors’ main responsibility is to protect the interests of all the creditors representing them, including their own and to maximise the value of the debtor’s assets for distribution. They should ensure that the debtor does not abuse the bankruptcy process and take advantage of the creditors.

Information gathering

It is the responsibility of the Committee of Creditors to gather all the relevant information regarding the financial situation of debtors, including assets, liabilities, and operations.

Resolution plan evaluation

The Committee of Creditors evaluates and approves the resolution plans submitted by resolution applicants. It also supervises the work of the resolution professional, who manages the debtor during the insolvency process.

Approval of transactions

At the time of the insolvency process, the Committee of Creditors approve the significant transactions. The transactions may include the sale of assets or the initiation of new contracts.

Engagement of professionals

The Committee of Creditor’s main responsibility is to process the insolvency proceedings. But they also have the power to engage legal or financial professionals to assist them in the insolvency proceedings.

Operational management

The Committee of Creditors can take any decision on the insolvency of a debtor. So, they can also make key decisions regarding the debtor’s operations during the insolvency process, such as whether the business should continue to operate or not.

Advocating for fair treatment of creditors

The creditors’ committee has the duty of making sure that every creditor is treated fairly during the bankruptcy process. This involves making sure that assets are distributed in a way that is fair to all creditors and speaking up against any actions proposed by the debtor or trustee that could hurt the creditors’ interests.

Ensuring compliance

The Committee of Creditors also ensures that the insolvency process is compliant with the appropriate law and that the rights of all stakeholders are protected.

Functions of COC

Meeting regularly

According to the committee of creditors, the meeting will be conducted by the insolvency professionals, who act as chairpersons of the meeting. For the voting, every member should be present at the meeting. The Committee of Creditors is required to meet periodically to discuss the progress and make decisions regarding the insolvency process.

Voting on resolutions: Voting is the most important function of the Committee of Creditors. Each member of the committee of creditors shall vote on various matters, such as approval of resolution plans, extension of the resolution process, and deciding on the liquidation of the debtor. But they shall vote in accordance with the voting share assigned to them based on the financial debts owed to such creditors as per the IBC.

Consideration of resolution plans

The Committee of Creditors reviews, negotiates, and approves resolution plans that aim to resolve the debtor’s insolvency and ensure the viability of the business.

Monitoring the assets

The Committee of Creditors monitors the management and disposition of the debtor’s assets by the resolution professional during the insolvency process.

Judicial interpretation

There are so many cases in our Indian Judiciary relating to the Committee of Creditors. Some are as follows:

K. Sashidhar vs. Indian Overseas Bank & Ors.

In the landmark Supreme Court case of K. Sashidhar vs. Indian Overseas Bank & Ors., the Committee of Creditors (COC) plays a crucial role in considering and approving resolution plans under the Insolvency and Bankruptcy Code (IBC). The process begins when a resolution plan is submitted to the COC by a potential investor or a group of investors.

The COC is responsible for evaluating the resolution plan based on various criteria, including its feasibility, viability, and compliance with the provisions of the IBC. The plan must also address the interests of all stakeholders, including creditors, shareholders, and employees.

Before presenting the resolution plan to them, the Resolution Professional (RP) must vet and verify it to ensure that it complies with all statutory requirements specified under Section 30(2) of the IBC. This includes assessing the plan’s financial feasibility, operational viability, and legal compliance.

The COC has the primary responsibility of approving or rejecting the resolution plan. The Code grants paramount status to the commercial wisdom of the COC, recognising that they are best placed to make decisions in the best interests of the corporate debtor and its stakeholders. The COC’s decision-making process is guided by the principle of maximising the value of the corporate debtor’s assets and ensuring a fair and equitable distribution of proceeds among creditors.

To ensure transparency and accountability, the COC must follow a structured voting process. Creditors with voting rights, typically determined by their debt exposure to the corporate debtor, cast their votes in favour of or against the resolution plan. The plan is approved if it secures the requisite majority as specified under Section 30(4) of the IBC.

Once the resolution plan is approved by the COC, it is submitted to the National Company Law Tribunal (NCLT) for final approval. The NCLT reviews the plan to ensure that it complies with the provisions of the IBC and protects the interests of all stakeholders. If the NCLT approves the plan, it becomes binding on all parties involved, including the corporate debtor, creditors, and shareholders.

The K. Sashidhar case emphasises the importance of the COC’s role in the IBC process. By granting paramount status to the commercial wisdom of the COC, the Code aims to facilitate efficient and effective resolution of corporate insolvency while ensuring a fair and equitable outcome for all stakeholders.

Shaji Purushothaman vs. Union Bank of India and Ors.

In the case of Shaji Purushothaman vs. Union Bank of India and Others, the National Company Law Appellate Tribunal (NCLAT) ruled that the Committee of Creditors (COC) must determine whether a settlement proposal made under Section 12(1) of the Insolvency and Bankruptcy Code (IBC) is superior to the Resolution Plan. This decision has significant implications for the corporate insolvency resolution process in India.

Section 12(1) of the IBC allows for the submission of settlement proposals by any interested party, including the corporate debtor, during the corporate insolvency resolution process. These proposals can include a plan for restructuring the debtor’s debt, selling its assets, or a combination of both.

The COC is responsible for evaluating settlement proposals and deciding whether to accept them. If the COC accepts a settlement proposal, it will then be binding on all stakeholders, including the corporate debtor, its creditors, and shareholders.

The NCLAT’s decision in Shaji Purushothaman vs. Union Bank of India & Ors. clarifies that the COC must compare the settlement proposal with the Resolution Plan when making its decision. The Resolution Plan is a plan submitted by a potential investor or acquirer that outlines how they intend to revive the corporate debtor and repay its creditors.

The NCLAT’s decision ensures that the COC must carefully consider all options available to them and select the proposal that is most likely to maximise the value of the corporate debtor’s assets and provide the best outcome for all stakeholders. This decision will help protect the interests of creditors, shareholders, and other parties involved in the corporate insolvency resolution process.

Overall, the NCLAT’s decision in Shaji Purushothaman vs. Union Bank of India & Ors. is a significant development that will have a positive impact on the corporate insolvency resolution process in India. By ensuring that the COC must compare settlement proposals with Resolution Plans, the NCLAT has helped to ensure that the best possible outcome is achieved for all stakeholders involved.

Ms. Rama Subramaniam vs. M/s Sixth Dimensions Project Solution Limited

In the case of Ms. Rama Subramaniam vs. M/s Sixth Dimensions Project Solution Limited, the National Company Law Tribunal (NCLT) ruled on the authority of the Committee of Creditors (COC) to change the Insolvency Resolution Professional (IRP). While acknowledging that the COC has the ability to replace the IRP, the tribunal emphasised that this power is not absolute and must be exercised for valid and tenable reasons.

The NCLT’s decision in this case serves as a reminder that the COC’s authority is subject to legal limitations and that arbitrary or unjustified changes to the IRP are not permissible. The tribunal’s ruling helps ensure that the insolvency resolution process remains transparent, fair, and accountable.

The IRP plays a crucial role in the insolvency resolution process, overseeing the management of the corporate debtor, formulating and implementing resolution plans, and facilitating negotiations between creditors and stakeholders. Therefore, it is essential that the IRP is a competent and experienced professional who can effectively discharge their responsibilities.

The NCLT’s ruling also highlights the importance of due process in insolvency proceedings. By requiring the COC to provide valid reasons for changing the IRP, the tribunal ensures that decisions are made in a transparent and well-reasoned manner. This helps protect the rights and interests of all stakeholders involved in the insolvency resolution process.

Furthermore, the NCLT’s decision underscores the need for robust oversight mechanisms in the insolvency regime. The tribunal’s role in reviewing and approving changes to the IRP acts as a check against arbitrary or capricious decisions by the COC. This oversight mechanism helps maintain the integrity and credibility of the insolvency resolution process.

Overall, the NCLT’s ruling in Ms. Rama Subramaniam vs. M/s Sixth Dimensions Project Solution Limited sets an important precedent for the exercise of the COC’s authority to change the IRP. By emphasizing the need for valid reasons and due process, the tribunal has contributed to the development of a fair and transparent insolvency resolution framework in India.

Conclusion

The Committee of Creditors plays a very important role in the insolvency process. But the specific roles and functions of the Committee of Creditors can vary based on the insolvency and bankruptcy laws of the relevant jurisdiction and depending on the circumstances and developments. The Committee of Creditors has the supreme powers, but it has to operate within the boundaries of law and it is always answerable to the adjudicating body for its decisions. The Committee of Creditors’ role is critical for ensuring that the resolution process is fair, transparent, and efficient and that it balances the interests of various stakeholders, including the creditors, the debtor, employees, and others.

References

Rajkumar Narsingh Pratap Singh Deo vs. State of Orissa and Anr. (1964)

By

Vanshika Kapoor

-

July 4, 2024

0

This article is written by Shweta Singh. This article provides a detailed analysis of the Rajkumar Narsing Pratap Singh Deo vs. State of Orissa case, along with information relating to the facts of the case and in-depth arguments presented by the parties. In addition to this, it also entails the analysis of the precedents referred to and the decision made upon such analysis by the Supreme Court.

Table of Contents

Introduction

In the context of analysing the acts of the monarch in India, the Supreme Court always gets confronted with a complex question pertaining to whether the act in issue is a legislative action or an executive one. For the purpose of ascertaining such an issue, it becomes relevant to distinguish between legislative and executive actions. Precedents in this field of law are concerned with the role and classification of the orders and grants issued by the provincial rulers in pre-Constitution India and consider the legal position that these orders and grants take in the current legal framework governing the Indian polity. This demarcation is important because Article 372 of the Constitution of India provides that the law in existence before the coming into force of the Constitution of India will continue to be in force unless it has been so amended or repealed by a competent authority. The Supreme Court, in the case of Rajkumar Narsingh Pratap Singh Deo vs. State of Orissa and Anr. (1964) (hereinafter referred to as ‘this case’ or ‘present case’), dealt with a similar issue and emphasised the importance of distinguishing between the executive and legislative actions of a monarch in order to decide the precise effect of the grants and orders issued by him. This case analysis provides insight into the relevant facts, arguments, and judgement rendered by the Supreme Court, along with the reasoning behind such a decision.

Details of the case

Name of the case: Rajkumar Narsing Pratap Singh Deo vs. State of Orissa, 1964
Name of the court: The Honourable Supreme Court of India
Date of the judgement: 9 March 1964
Parties to the case

Appellant: Rajkumar Narsing Pratap Singh Deo
Respondent: State of Orissa

Equivalent citations: 1964 AIR 1793, 1964 SCR (7) 112.
Type of the case: Civil Appeal No. 133 of 1963.
Bench: Honourable Chief Justice P.B. Gajendragadkar, K.N. Wanchoo, J.C. Shah, N. Rajagopala Ayyangar, and S.M. Sikri.

Facts of the case

The ruler of the Dhenkanal state awarded a Sanad to his younger brother, Rajkumar Narsingh Pratap Singh Deo (hereinafter referred to as ‘the appellant’), allocating some lands and a maintenance allowance as per the customary laws of the Dhenkanal State. The state of Dhenkanal was an independent state before 1947. However, it merged with the Province of Orissa following the merger agreement between the ruler of Dhenkanal and the Dominion of India on the 15th of December 1947. The agreement was effective from the 1st of January 1948. This led to the taking over of the entire administration of Dhenkanal State by the State of Orissa (hereinafter referred to as ‘the respondent’), which, in consequence, discontinued the cash allowance. This handover of power was done in the exercise of its powers granted by the central government under Section 3(2) of the Extra-Provincial Jurisdiction Act of 1947.

Following the Sanad under appeal, which was granted to the appellant, he was given Rs. 5001 monthly from the Dhenkanal District Treasury. This payment was received through a permanent pay order sanctioned by the ruler of Dhenkanal, which was given according to the Sanad. However, after the merger, the respondent ceased making this payment on the 1st of May 1949. Despite several attempts by the appellant to appeal to various authorities of the respondent to reconsider this decision, all his attempts were in vain. Hence, the appellant filed the present suit on the 26th day of September 1951 in the Court of the Subordinate Judge, Dhenkanal. In the suit, he challenged the validity of the order of discontinuation by asserting that his pension had been cancelled illegally and sought an appropriate order under the law. The suit was dismissed by the Court of the Subordinate Judge, Dhenkanal. Therefore, the appellant filed an appeal to the Supreme Court.

Issues raised

The leading question of law that arose in this appeal was:

Whether the Sanad granted to the appellant by his elder brother, the ruler of Dhenkanal State, was part of the ‘existing law’ under Article 372 of the constitution and clause 4(b) of Order No. 31 of 1948 issued by the respondent.

Arguments of the parties

Appellant

Several contentions were raised by the appellant in support of their claim that the discontinuation of the cash allowance by the state of Orissa was unlawful and unconstitutional. The appellant asserted that according to the custom in the appellant’s family, every junior member of the family had the privilege of being provided with reasonable maintenance, depending on the state of the family. This custom was recognised and enforced as customary law in the Dhenkanal State. Cash allowances and properties, such as land, were the components of maintenance grants provided to the members of the Royal Family. These allowances, known as Kharposh allowances, were recovered from and disbursed out of the revenue of Dhenkanal State. It was in accordance with the customary law that the Ruler of Dhenkanal provided the appellant with the Sanad in question. The Sanad was provided to the appellant with some land and a monthly cash benefit of Rs. 5001 per month for his entire life. The discontinuation of the cash allowance of Rs. 5001, as received by the appellant by the respondent, was challenged as unlawful and unconstitutional. The appellant argued that the grant constituted a law under Article 372 of the Constitution of India, and therefore, the respondent should have continued it. He also alleged that after the merging of Dhenkanal with Orissa, he was entitled to receive the grant, which was accepted and enforced by the respondent. Thus, for these arguments, the appellant prayed for an injunction to compel the respondent to continue paying the appellant’s cash allowance.

Mr. Setalvad, who represented the appellant in the present case, supported the assertion that the Sanad, which was the basis of their claim, was ‘law’. Mr. Setalvad argued that at the time when the Sanad was granted, the ruler of the Dhenkanal state was an absolute monarch vested with absolute sovereign power. This sovereignty allowed the Ruler to have legislative, judicial, and executive power. Hence, any order the Ruler gave was equivalent to ‘law’. Mr. Setalvad emphasised that in the context of an absolute monarch, whose decrees are inherently lawful, there was no significance in distinguishing between orders that are legislative from those that are executive or administrative. Any order that such a ruler issues should be considered to have the force of law, and the Sanad in question falls into that category.

It was further argued by Mr. Setalvad that the Foreign Jurisdiction Act, 1947 (hereinafter referred to as ‘the Act of 1947’) conferred on the central government broad powers to extend its jurisdiction to areas beyond its provinces as it deemed necessary. Such authority was granted under Section 3(1) of the Act of 1947. On the other hand, Section 3(2) even allowed the central government to transfer this jurisdiction to any officer or authority as that government deemed fit, either fully or partially, and in any manner without limitation. Mr. Setalvad argued that it was in the exercise of this power as granted under Section 3(2) of the Act of 1947 that the central government had delegated its powers to the province of Orissa with respect to states that had merged with it. This delegated power was used to issue Order 31 of 1948 by the state of Orissa. Laws that were applicable to the merging areas were provided under clause 4 of this Order, specifically clause 4(a), which referred to the list of enactments applicable to the merged areas. Clause 4(b), on the other hand, provides that for matters that did not fall within any of the specified enactments mentioned in the list, all laws that were in operation in any of the states that merged with Orissa, irrespective of whether they were substantive or procedural, customary or statutory laws, would still prevail. These laws would continue to be in force unless they ceased to have effect by virtue of an order under the Act of 1947.

On the basis of the afore-mentioned fact, the appellant concluded their argument by asserting that according to Clause 4(b) of this Order, the customary law that existed in the State of Dhenkanal before its merger continued to function as law within the territory of Dhenkanal because it has not been repealed or amended. Hence, since the Sanad was held as law by the appellant, it is unlawful for the respondent to cancel the cash allowance payment to the appellant through an executive decision. The only way by which the respondent could cancel such a cash allowance was by either passing a new law or issuing an order under Clause 4(b) of Order 31 of 1948.

Respondent

The respondent dismissed the appellant’s contention on the grounds that the gift upon which the appellant relied was of a nature that could be terminated by the respondent. The respondent claimed that the grant that was given by the Ruler by an executive act in 1931 does not fall within the definition of law under Article 372 of the Constitution. Therefore, as the grant was an executive action by the Ruler, it could also be withdrawn by the respondent through another executive action, given that the respondent was the legal successor to the Ruler.

The respondent also argued that the appellant’s claim that the respondent acknowledged and agreed to honour the grant of a cash allowance was untenable. The respondent supported this argument by contending that the trial judge, to whom the appellant initially took his case, and the High Court of Orissa, where the appellant went with an appeal from the trial judge’s ruling, also dismissed the appellant’s submissions. Thereby dismissing the appellant’s argument. Later, the appellant applied for and was issued a certificate by the High Court that enabled him to bring his case before the Supreme Court in an appeal.

Laws discussed in Rajkumar Narsingh Pratap Singh Deo vs. State of Orissa and Anr. (1964)

Constitution of India

The Constitution of India is the Supreme Law of India that outlines the political and administrative system in the country. The Constitution was adopted by the Constituent Assembly on November 26, 1949, and came into force on January 26, 1950. It also lays down the basic structure that defines the basic political principles, organises the structure, processes, powers, and functions of governmental agencies, and defines the rights, directing principles, and duties of citizens. The following Article was discussed in the present case:

Article 372 of the Constitution of India

Article 372 of the Constitution of India deals with the continued application and modification of existing laws after the coming into force of the Constitution. Article 372 of the Constitution states that any existing laws in India that were in force at the time of the commencement of this Constitution shall remain in force until they are amended or repealed by some legislative body or other competent authority. This means that the previous laws shall remain in force until they are repealed or amended by the competent legislative body.

The rationale behind Article 372 is to provide a smooth transition from the pre-constitutional legal setup to the new legal framework established by the Constitution. It recognises the need for legal certainty and consistency while admitting the need for the legal system to undergo the necessary transformations to meet the principles and demands of the new constitutional order. This ensures that there are no legal gaps and that governance does not come to a standstill as the nation transitions from the pre-constitutional stage to the post-constitutional one.

While Article 372 provides protection for existing laws to operate until they are repealed, it also provides for the amendment of such laws so that they conform to constitutional principles. These amendments include making changes, alterations, or even modifications to the laws in order to remove any contradiction or conflict with constitutional provisions.

According to the provisions of Article 372(2), the power to alter these existing laws is vested in the President of India. While exercising such power, the President can make necessary or expedient adaptations and modifications that he deems necessary so that any existing law is in accordance with the Constitution of India. All the adaptations suggested by the President pursuant to his power under this Article are effected through orders or notifications made under his authority, and such orders have a binding legal authority akin to the enactments passed by Parliament.

As per the provisions of Article 372(3)(a), the President cannot exercise his power to amend, adapt, change, or suspend an existing law after the culmination of three years from the commencement of the Constitution. Moreover, as per Article 372(3)(b), the President shall not prevent any competent legislature or authority from altering in any way any law adapted or altered by the President as empowered under this Article.

Foreign Jurisdiction Act, 1947

The Foreign Jurisdiction Act was passed on 24th December 1947. This Act empowered the Central Government to acquire territories outside India by treaties, agreements, sufferance, and in any other legal way. It enables the Central Government to exercise foreign jurisdiction in any manner it considers fit. The following sections were discussed in the present case:

Section 3 of the Foreign Jurisdiction Act, 1947

Section 3(1) of the Act of 1947 confers on the central government broad powers to extend its jurisdiction to areas beyond its provinces as it deems necessary. On the other hand, Section 3(2) even allowed the central government to transfer this jurisdiction to any officer or authority, as that government deemed fit, either fully or partially and in any manner without limitation.

Section 4 of the Foreign Jurisdiction Act, 1947

As provided by Section 4(1) of the said Act, the necessary orders can be passed by the central government through issuing notifications in the official gazette for the proper exercise of said extraterritorial jurisdiction as the Central Government deems necessary. This implies that the central government has the authority to make decisions and take actions that are best suited for administrative purposes that lead to legal consequences in foreign territories. Section 4(2) further outlines the specific types of orders that the Central Government can issue, categorised under clauses (a) to (d). These categories encompass a wide range of powers, ensuring the government can address various situations and needs that arise in areas where this Act of 1947 is applicable.

Precedents referred to by the court

The Supreme Court had referred to several precedents to assist itself in deciding on the issue. The precedents referred to by the court are as follows:

Ameer-un Nissa Begum vs. Mahboob Begum (1955)

In this case (hereinafter referred to as the ‘Ameer-un Nissa Begum case‘), the Supreme Court was called upon to assess the validity of the Firman made by the Nizam of Hyderabad on February 19, 1939. This Firman created the Special Commission to investigate and prepare a report regarding a case of succession to a deceased Nawab that had been transferred from the Darul Quaza Court. The question in issue in this case was whether the Firman was an enactment of the legislative power or the judicial power of the Nizam. Chief Justice Mukherjea, on behalf of the Court, stated that Nizam was the supreme authority in the legislative, judicial, and executive fields as he had unlimited powers in all these areas, and there was no check on his power. He further stated that Farman was the sovereign will of Nawab and had the same legal effect as any other law in the state. Thus, as long as a specific Firman remained valid, it regulated the rights of the parties concerned but could be recalled or amended with an additional Firman for any reason chosen by the Nizam.

The Supreme Court in the present case, by analysing this case in reference to the issue at hand, observed that the learned counsel in that case did not argue the point, and the question of whether it was possible or useful to distinguish between legislative and executive Firmans was neither debated before the Court nor examined and decided as a general legal principle. Therefore, the court opined that the facts of the aforementioned case were distinguished from this case.

Director of Endowments, Government of Hyderabad vs. Akram Ali (1955)

In this case, the Supreme Court was tasked with considering a Firman issued by the Nizam on December 30, 1920. This Firman instructed the Department to oversee the administration of the Dargah until the Civil Court could investigate the case and determine the rights of the parties. At the time when the Firman was issued, the Nizam was referred to as the absolute sovereign on all civil matters, and his word was considered a legislative authority. Therefore, the Firman was considered valid, thereby depriving the respondent and any other claimant of all the rights of possession while the case investigation was pending.

The court, through the analysis of this case, came to the same conclusion as the one concluded while analysing the Ameer-un Nissa Begum case. The Supreme Court, in the present case, observed that in the aforementioned case, the point was not argued about whether it was possible or useful to distinguish between legislative and executive Firmans. Therefore, the court pointed out that the observations made in this case were not meant to set any sort of precedent, or that the proposition that was put forward by Mr. Setalvad was misplaced.

Madhaorao Phalke vs. The State of Madhya Bharat (1960)

In this case (hereinafter referred to as the ‘Madhaorao Phalke case’), the Supreme Court of India had to decide whether the Kalambandis issued by the Ruler of Gwalior in the exercise of his sovereign powers were laws or mere executive action. This case entailed the assessment of these orders, unlike the above-mentioned cases, which broadly considered the nature of orders issued by absolute monarchs without detailed analysis. Upon analysis, the Court concluded that the Kalambandis possessed elaborate regulations and demonstrated characteristics akin to statutes or laws. Consequently, it could hardly be distinguished from legislative acts. Therefore, the Court found that the Kalambandis have to be considered as rules or regulations that have the force of the law.

Promod Chandra Deb vs. The State of Orissa (1961)

The Court, in this case, was seized with the question of whether the grant in question was law. The Court pointed out that, when analysed together with Order 31 of the Rules, Regulations, and Privileges of Khanjadars and Khorposhdars, the grant did have the force of law. These rules, similar to the Kalambandis in the Madhaorao Phalke case, as observed by Chief Justice Sinha, were to be treated as existing law within the meaning of Article 372(2) of the Constitution of India. In essence, this decision affirmed existing specific rules or regulations before the commencement of the Constitution, remaining legally enforceable. However, the case did not formulate new principles; it only referred to general observations that are common in other cases.

Tilkayat Shri Govindlalji Maharaj vs. State of Rajasthan (1963)

In this case, the Court had to decide the precise issue of whether a Firman issued by the Udaipur Dhar Bar in the year 1934 was law. In reaching this conclusion, the Court carefully reviewed the provisions, ambit, and impact of the implementation of the Firman. After much deliberation, the Court proclaimed that the Firman was indeed law. The above conclusion was based not on general principles but on a detailed analysis of what the Firman contains.

Maharaja Shree Umaid Mills Ltd. vs. Union of India (1962)

In this case, a similar question arose before the Supreme Court to decide, as in the aforementioned cases, regarding an agreement made on April 17, 1941. The main argument was that this agreement should be considered law, and in support of this argument, several general observations drawn from previous cases were offered. Justice S. K. Das, speaking for the Court, considered these observations and the circumstances under which they were made. He rejected the arguments that such observations established that it was impossible to distinguish between the legislative and executive powers of an absolute monarch.

The court clarified that the said agreement was only a contract, which was nothing more than an executive act and not a law as per the provisions of Article 372 of the Constitution of India. Therefore, it was concluded by the court that such agreements or orders could be distinguished based on their legislative or executive nature. This decision further affirmed the notion that not all the actions of an absolute monarch are legally binding.

Judgement in Rajkumar Narsingh Pratap Singh Deo vs. State of Orissa and Anr. (1964)

The court, in this regard, ruled that the appellant’s contention as to the respondent’s act of discontinuing the cash allowance was not legitimate. The court also held that while the payment was being made even after the merger, it did not mean that the respondent was not authorised to discontinue the payment later on. The court stated that the respondent required some time to review many similar cases before coming up with a definite decision on the matter. Therefore, the court affirmed the High Court’s decision except on different grounds and dismissed an appeal.

Obiter dicta

For the purpose of deciding whether the grant was part of the existing law under Article 372 of the constitution and clause 4(b) of Order No. 31 of 1948 issued by the State of Orissa, it was pertinent to consider whether the power exercised in a given case by issuing an order by the ruler was judicial, legislative, or executive. The court, while deliberating on this issue, negated the contentions made by Mr. Setalvad that, with regard to the order made by the monarch, there could be no distinction between executive and legislative orders. The court recognised that in an absolute monarchy, all legislative, executive, and judicial power is vested in the monarch. All these powers emanate from the monarch, and any order given by him was binding within the sovereign territory of the country, regardless of whether it was legislative, executive, or judicial in nature. However, even though these powers were consolidated in one individual, the fundamental differences between them remained.

For example, the division between the legislative and executive branches still persists from a jurisprudential standpoint, although in practice, it may be unfruitful to question the nature of such orders. This means that the existence of absolute monarchs did not undermine the existence of the fundamental rules of jurisprudence that draw a distinction between these three kinds of powers. A comprehensive analysis of an order passed by a monarch would disclose to the jurist whether the power exercised was judicial, legislative, or executive. The conclusion drawn based on the jurisprudential analysis regarding the nature of the order as well as the power that lies at its foundation would still remain valid. The court, therefore, observed that it was illogical to claim that, in relation to the presence of an absolute monarch, the legal differentiation of all the aforementioned three types of powers was unimportant.

The court further observed that in order to decide upon the issue, it was important to consider whether it was possible by analysing the nature of the given order, its provisions, and the circumstances surrounding the order to decide whether it was a legislative or executive order. It was observed by the court that while it might be tough for theorists to demarcate a precise distinction between law and other forms of executive orders, the attributes of law are clear. In general, a law can be defined as a set of rules that define legal rights and obligations that are recognised by courts. This makes a law different from a grant, where there is an agreement between the grantor and the grantee, in contrast to a law that is a command that the citizens have to obey no matter the circumstances.

Consequently, in an absolute monarch’s reign, law has been defined as commands that ought to be followed by the subjects. Hence, the court concluded that it could not accept the assertion made by Mr. Setalvad that it was irrelevant to consider whether a grant by an absolute monarch was an executive or legislative act. If the view of Mr. Setalvad were accepted, then any order that an absolute monarch would pass would be considered law, even if the matter were purely personal and did not affect the public in any way. Therefore, it is not right to negate the difference between judicial, executive, or legislative order or matters relating to private concerns while considering action or order from an absolute ruler.

The Supreme Court analysed various judgements referred to by the appellants to assess the validity of the appellant’s arguments. The court concluded that a detailed scrutiny of the decisions referred to by Mr. Setalvad goes against the contention of the applicant that this Court has developed a broad principle of law that disregards the distinction between the legislation and administration in the orders passed by absolute kings, or the Raja of Dhenkanal, as in the present case. The right legal position is that if there is a dispute as to whether an order from an absolute monarch is a legislative act and remains in effect under Clause 4(b) of the Order, all factors must be taken into consideration before making a determination. These factors include the nature of the order, the scope and impact of its provisions, its context and general setting, and the method used by the Ruler to issue legislative versus executive orders. All of these and other related features must be looked at in order to then lawfully assess the nature of the order. Therefore, it would be wrong and unjust to accept Mr. Setalvad’s proposition that the Sanad issued by the Raja of Dhenkanal is ‘law’ without looking at its characteristics and other surrounding factors. The court, therefore, proceeded to analyse Sanad in light of the aforementioned factors.

Ratio decidendi

The court, in its analysis of the Sanad, found that it consists of three clauses. The first clause described the customary practice that prevailed in the State of Dhenkanal, wherein the Rajas used to grant hereditary rights to their relatives. It also stated the necessity to ensure that the grantee received adequate provisions to maintain a dignified lifestyle appropriate to his status as a Rajkumar of the State. This included providing enough resources for him to support not only himself but also his family, heirs, and descendants, allowing them to live in a manner befitting their noble status and heritage. Therefore, as a sign of love and affection, the grantor made the khanja grant, which entailed the appellant receiving Rs. 5001 as a cash allowance to be paid from time to time in the appellant’s lifetime, and further assigned to him all the land of 6942-71-5 acres described in the Schedule to the Sanad. The land in this grant could be passed from one generation to another, thus enabling the grantee and his heirs to benefit from it for generations.

Clause 2 of the Sanad puts the condition on the grantee and his heirs to remain loyal. Clause 3 of the Sanad stipulated that the State was responsible for any costs involved in preparing the granted land for cultivation. After analysing the three clauses of the Sanad, the court concluded that there was no legislative component in these provisions. The Sanad does not contain any orders that the citizens of the State are supposed to obey; it is merely a gift from the Ruler that accords with the family customs and the customary law of the State, which obliges him to provide for his junior brother. Thus, the court held that the grant was solely an executive act of the ruler in order to discharge a duty owed to his junior brother under personal and customary family law. It would be unreasonable to classify a grant of such a nature as law. Even if the grant was in part founded on personal and customary law, any action taken by the Ruler to discharge his responsibilities under these laws could not be construed as an order made by him in his legislative capacity. For these reasons, the court held that the Sanad in question was an executive act and, therefore, cannot be classified as law, as Mr. Setalvad pointed out in his assertion.

The Supreme Court then moved ahead to decide upon the second contention of the appellant that the obligation assumed by the Ruler was acknowledged by the respondent and, therefore, it could not be set off or cancelled by the respondent through executive action. The court outrightly negated this argument as irrational and held that if the original grant was made by the Ruler of the State of Dhenkanal in the exercise of the executive power, then it is within the authority of the respondent, as the Ruler’s successor, to alter or even revoke the said grant by another exercise of the executive power. The court accepted the argument that the customary law requiring maintenance from the Ruler towards his junior brother might have been continued under clause 4(b) of the 1948 order and Article 372 of the Indian Constitution. However, to continue, the customary law is quite different from stating that the specific amount of maintenance as claimed in the grant cannot be varied. The act of the respondent to withdraw the monetary benefit, especially the monthly cash allowance of Rs. 5001, does not abrogate the law itself. It is agreed that the said land grant is still in place with regard to the Sanad. Consequently, the action of the respondent merely decreases the total maintenance allowance, which was initially awarded to the appellant by the Ruler in 1931. The court further ruled that though the customary law requiring the provision of maintenance to the appellant was in force, the respondent had complete authority to vary and modify the maintenance amount, and such authority fell within the executive capacity of the respondent. Therefore, since Sanad is not a law, it would be unjustified to hold that the respondent could not vary or modify the amount provided under Sanad by an executive, and the only way of doing so is through the filing of the suit in court.

Critical analysis of the case

The Supreme Court, in this case, by distinguishing between legislative and executive actions, reinforced the intention of preserving only those actions that can be classified as “law” under Article 372 of the Constitution of India. This saves against the tendency to continue all pre-constitutional acts that could generate legal confusion. The decision delivered by the Supreme Court upholds fundamental principles of jurisprudence. The decision emphasises that even if kings and emperors wield absolute authority, there remain differences between legislative and executive acts, as the former are aimed at broader public applicability while the latter may have a limited scope and a specific context. In addition to this, the decision of the Supreme Court in this case has also paved the way for the transition to take place from the pre-constitutional legal precedents to the newly constituted legal system without complete rejection or acceptance. It allows for the analysis of each act independently, making it possible to avoid the legalisation of any act that does not warrant further protection.

Conclusion

In legal disputes arising out of grants and orders made by an absolute monarch, the Supreme Court of India has time and again drawn a distinction between legislative and executive action. The resolution of such disputes involves examining the characteristics and context of such grants and orders, including whether they were legislative or executive. In this case, after analysing the context and characteristics of the grant made by the Ruler of Dhenkanal, the same has been held as an executive act rather than a legislative one. Therefore, the respondent, being the successor to the Ruler, had every right to either revoke or alter the grant by an executive order. This decision reaffirms several fundamental principles of constitutional law, one of which is that acts of an absolute monarch cannot be considered legally binding and can be repealed by the subsequent authority of an executive action.

Frequently Asked Questions (FAQs)

Where is the term ‘existing law’ defined under the Constitution of India?

The words ‘existing law’ is prescribed under Article 366(10) of the Constitution of India. Under this provision, “existing law” has been defined as any law in force in India immediately before the creation of the new Constitution. In particular, it includes any statute, regulation, order, regulation, or by-law made by any legislative body or person who had legal authority to do so at that time.

What was the observation of the court with regard to the case laws referred to by the appellant?

After the close examination of the cases referred to by the appellant, the Supreme Court observed that it did not support his argument that this Court had set forth a general principle with regard to the irrelevance or inapplicability of the well-recognized distinction between legislative and executive acts pertaining to orders passed by absolute monarchs, such as the Raja of Dhenkanal in this case.

What is the difference between legislative actions and executive actions?

The distinction between legislative and executive is that the legislative body is responsible for drafting laws, while the executive body is, on the other hand, supposed to execute these laws. In India, the law-making institution is the parliament, and on the other hand, the executive institution is the government. The powers of a legislative body include the passing of legislation and bills. On the other hand, an executive body is one that is assigned the task of enforcing laws and introducing bills to Parliament.

What are the contents of the Sanad that was in issue in the present case?

The Sanad consists of three clauses. The first clause described the customary practice that prevailed in the State of Dhenkanal, wherein the Rajas used to grant hereditary rights to their relatives. It also stated that there was a clear need to provide adequately for the grantee so that he might be enabled to live a dignified life as a Rajkumar of the State as well as support himself, his family, heirs, and descendants in a manner suitable to their status. Therefore, as a sign of love and affection, the grantor made the khanja grant, which entailed the appellant receiving Rs. 5001 as a cash allowance to be paid from time to time in the appellant’s lifetime, and further assigned to him all the land of 6942-71-5 acres described in the Schedule to the Sanad. The land in this grant could be passed from one generation to another, thus enabling the grantee and his heirs to benefit from it for generations. Clause 2 of the Sanad puts the condition on the grantee and his heirs to remain loyal. Clause 3 of the Sanad stipulated that the State was responsible for any costs involved in preparing the granted land for cultivation.

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MH Hoskot vs. State of Maharashtra (1978)

By

Vanshika Kapoor

-

July 4, 2024

0

This article has been written by Debapriya Biswas. This article deals with the analysis of the landmark case of M. H. Hoskot v. The State of Maharashtra (1978). Further, the article discusses the issues raised in the case and the principles established by the Supreme Court to address these issues. Lastly, the article traces the significance of the judgement as well as the future implications it may have brought even in the present times.

Table of Contents

Introduction

Enshrined in Part III of the Constitution of India are the fundamental rights that are guaranteed to all citizens. Every individual is eligible for these rights, regardless of their age, gender, race, status, class, etc. However, despite the guarantee, it is the individuals imprisoned in jails that often face the most violations of fundamental rights, many of which are not further reported either.

Being imprisoned and found guilty of one’s crimes does not equate to one’s status being degraded from a person to a non-person. Every person is eligible for basic human rights and so are those imprisoned. The landmark judgement of M. H. Hoskot v. State of Maharashtra (1978) discusses the same in length, exploring the basic rights of a prisoner as well as the need for free legal aid and assistance for prisoners who are unable to secure legal services.

Details of the case

Date of judgement

August 17, 1978

Parties of the case

Petitioner: Madhav Hayawadanrao Hoskot

Respondents: State of Maharashtra

Citation

1978 AIR 1548, 1979 SCR (1) 192, 1978 SCC (3) 544, AIR 1978 Supreme Court 1548, 1978 SCC(CRI) 468.

Court

The Supreme Court of India

Judges/Coram

Hon’ble Justice V.R. Krishna Iyer
Hon’ble Justice D.A. Desai
Hon’ble Justice O. Chinnappa Reddy

Background of the case

Education in India means more than just a quest for knowledge — it can be seen as a door to further opportunities or even an opportunity itself to help grab a higher-paying job. The higher the education level from a reputable college or university, the better chances there may be to get selected for higher-paying jobs.

With such a hunger for degrees, the Indian community provides a very favourable hunting ground for forgery and fabrication of such degrees, as seen in the present case with the petitioner. If the expertise in such fabrication is perfected as any other fine art and its practice undetected by the authorities, then there is quite more scope in this immoral business than an honest doctorate.

Even in the present job scenario, the competition for a single job posting is very high, even when the pay might be quite below the market rate. The rate of unemployment is high and people are desperate. In such circumstances, most people attempt to either build their academic achievements to the highest degree or find work through references. Since most lie in the former category, the fabrication of degrees and academic certificates also finds its way.

In addition to that, education is pricey, especially higher education like undergraduate and postgraduate studies. They are both costly and not readily available to all classes of society. While scholarships may be provided for those with social and economically backward backgrounds, many people find it difficult to even be admitted to such institutions given the high competition for each seat.

Thus, people either have to pay a high amount of money to be admitted and accommodated or give up their dream of studying further. This is why many people opt to fabricate their degrees instead, opting for it as a cheaper albeit immoral alternative.

In its essence, while education is still a necessity, the education system has become a borderline scam — a view that was also expressed by the Supreme Court of India in the present judgement.

Social Background

In the present case, the petitioner is a PhD and MSc holder while also attempting to fabricate the degrees of the same level from the same college he had attained them from — an irony in making that is more tragic than amusing. It should also be pertinent to note that the petitioner is from a middle-class family, which at the time was not at a status to even push through education beyond basic schooling.

Thus, the high academic background of the petitioner along with his economic status paints an image that is familiar to many already. It is often expected that the higher degrees one might have the higher paying jobs one may get, but the present case makes clear how that train of thought is not quite true.

As mentioned earlier, the education system has become a borderline scam given its pricey edge and more demand than availability. This has led to many scam artists working around to fabricate and sell degrees in a way to make money, which often makes more money than even an honest doctorate. The petitioner of the present case seemed to have thought the same as he made an attempt at fabrication of the certificate of degrees by the Karnataka University. However, he was caught before he could do so and was charged with forgery of authority letters and his fraudulent behaviour.

While not as severe as other crimes, the aforesaid offences should not be taken lightly either. Although initially the petitioner was given a very light sentence, with the view of his economic background and motivation, it was soon revised and extended up to three-year imprisonment.

In the present case, the economic status of the petitioner became one of the pivotal points of discussion, given how he was deprived of his right to appeal due to the delay of service of a copy of the judgement by the High Court while also not having enough funds to secure a legal professional. To counter both, the petitioner had filed a petition for appeal as soon as his sentence had ended and argued his case himself with the help of appropriate legal aid.

Many people in India are not aware of their rights, such as their right to bail or appeal, let alone have an idea of how to opt for legal aid if they are unable to afford legal services. This is especially true for people with lower social and economic status who find legal issues both costly and troublesome due to a lack of knowledge and aid.

Furthermore, since society does not have a favourable view of those with criminal charges or involved in legal prosecutions, many people opt to avoid legal conflicts at all costs — even if it means they have to waive their right to something. Many a time, people can’t even afford to access justice, leading to the same conclusion.

In the present case, the Supreme Court of India discusses the same at length, emphasising the need for free legal aid as well as its awareness among the public to help pave a better path to justice. Law provides protection to everyone regardless of their gender, race, class or status but the ones receiving the protection should also be aware of the means to access these services.

Legal Background

Enshrined in the Constitution of India are the rights and duties of every individual as well as the State itself. The Constitution, through its various provisions, protects and uplifts human development. Every individual in India is eligible for the rights and duties enshrined in the Constitution, which shall be granted when needed and addressed when breached.

One such right is the right to free legal aid and assistance under Article 39A of the Indian Constitution, which was added later on in 1976 by the 42nd Amendment of the Constitution. While not present in the initial stage of formulation of the Constitution, free legal aid now stands to be one of the most crucial steps to access to justice for different sections of society.

Free legal aid, in essence, helps to pave the path for a fair and reasonable legal procedure while upholding the laws of natural justice. Without such assistance, people from socially and economically backward classes would feel handicapped. After all, legal services are quite pricey and are not often available to all. Thus, it is vital to provide free legal aid to those in need to provide for a fair procedure.

As previously held by the Supreme Court in Maneka Gandhi v. Union of India (1978), Article 21 read with Article 19 of the Indian Constitution provided that fair legal procedures are part of personal liberty, without which no one can be deprived of their right to life and personal liberty.

Thus, it can be concluded that a fair legal procedure is the basis for any fair and unbiased prosecution and to facilitate the same, free legal aid and assistance is necessary. The question that arises here is whether free legal aid should be provided only to those in poverty or should it be extended beyond, such as the prisoners who may not be in a position to communicate with the outside world much.

In the present case, the Supreme Court discusses the aforesaid question in detail, expanding the scope of Article 142 of the Indian Constitution which empowers the Supreme Court to exercise its jurisdiction wherever it is necessary to ensure complete justice in any cause or matter pending before it.

This expansion of the scope of Article 142 evolved after a lot of judicial development with the aim to bring complete justice to deprived or marginalised sections of society, including the poor and needy people. In the present case, prisoners were also added to the scope of its protection.

Facts of MH Hoskot vs. State of Maharashtra (1978)

The petitioner of this case, Dr Hoskot, was a PhD and MSc holder from Karnataka University that was also questioned for fabrication given the actions of the petitioner. In the prior verdict, the petitioner was prosecuted and found guilty of forging counterfeit degrees under the name of Karnataka University.

The petitioner had forged a letter of authority along with the signature of the personal assistant to the Vice-Chancellor of Karnataka University, which authorised him with the power to get official seals with the name of the University made. With this forged authority letter, the petitioner had approached a seal-maker in Bombay named DabholKar, who was an expert in crafting embossing seals for administration and educational systems.

This embossed seal, once obtained, could then be used by the petitioner to make counterfeit certificates of degrees in the name of Karnataka University. However, before that could happen, the seal-maker informed the police of the said transaction, leading to the petitioner being caught red-handed in the forgery.

The Petitioner was held guilty of offences under Sections 417, 467, 468, 471 and 511 of the Indian Penal Code (IPC) by the Sessions Court, leading to a sentence of simple imprisonment of one day and a fine. In the view that the petitioner came from a middle-class family, the Court had given him a much softer sentence than anticipated by the State.

Thus, both the State and the petitioner filed appeals against the verdict of the Sessions Court to the Bombay High Court, asking for a revision of the one-day imprisonment. The petitioner argued against the simple imprisonment while the State contended that for such serious offences under the aforesaid sections, the imprisonment imposed was too light.

The Bombay High Court allowed the State’s prayers while dismissing the petitioner’s appeal and enhanced the imprisonment period from one day to three years. This verdict was given on November 22, 1973, three days after which the Central Prison Authority of Bombay took custody of the petitioner in conformity with the judgement. Later on, the petitioner was transferred to the Yerawada Jail in Pune where he was held for the rest of his imprisonment period of three years.

After his release, the petitioner filed a Special Leave Petition (SLP) in the Supreme Court under Article 136 of the Indian Constitution, seeking relief for his imprisonment despite a four-year delay. The petitioner opted to argue for himself with the help of professional legal aid provided by the Court, given his economic background. He reasoned that the delay in filing the present petition was due to the late delivery of the copy of the verdict of the Bombay High Court, which he did not receive until after his imprisonment period was completed despite applying for the same.

Issues raised

The issues raised before the Supreme Court of India were as follows:

Whether the present petition is maintainable under Article 136 of the Indian Constitution.
Whether Article 21 of the Indian Constitution encompasses the concept of free legal aid.

Contentions of the parties

Petitioner

As briefly stated earlier, the main contention of the petitioner was that there was a delay in his grant of a copy of the judgement by the Bombay High Court. The copy of the judgement given by the High Court in November 1973 was delivered to the petitioner in 1978 — a delay of over four years despite the fact that a free copy of the same was promptly sent by the High Court through the Superintendent of the Central Prison, Pune.

According to the petitioner, he had requested a certified copy of the verdict of the High Court through the jail authorities on December 10, 1973, under Section 363 (2) read with Section 387 of the Criminal Procedure Code, 1973 (CrPC). However, the petitioner did not receive any copy of the judgement despite his application.

The petitioner argued that even if the certified copy of the judgement was received by the jail authorities, it was never delivered to him during his imprisonment of three years. Due to this, the petitioner lost his right to appeal under a special leave petition and was forced to opt for a condonation petition under the Indian Limitation Act instead once he procured a copy of the verdict in 1978.

The petitioner’s argument that he never received the copy of the judgement was supported by a lack of any record or token of receipt for such delivery. Since there was no signature of the petitioner in the authority’s register for the recipe, there was no proof whether the petitioner was ever served the copy of the judgement by the High Court.

Respondent

The Respondent, on the other hand, argued that the apparent delay in the delivery of the copy of judgement was not due to their own actions.

As per the Superintendent of the Pune Central Prison, a clerk from his office had indeed delivered the copy of the judgement by the High Court to the petitioner. However, the copy was later retrieved back from the petitioner since it needed to be enclosed with a mercy petition to the Governor of Maharashtra for the remission of the sentence.

Due to the aforementioned retrieval, there was a delay in the delivery of the copy of the judgement to the petitioner.

Laws discussed in MH Hoskot vs. State of Maharashtra (1978)

Given below is a brief of the legal provisions discussed in the present case analysis:

The Constitution of India, 1949

Article 19 of the Indian Constitution

Enshrined in Article 19 (1) of the Indian Constitution are the six fundamental freedoms guaranteed to the citizens of India, which are:

Freedom of speech and expression;
Freedom to assemble peacefully;
Freedom to form associations or unions;
Freedom to travel and move throughout India;
Freedom to reside and settle in any part of India;
Freedom to practise any type of profession, occupation, trade or business.

The restrictions of the abovementioned rights are provided in the rest of the clauses of the same Article of the Constitution.

Article 21 of the Indian Constitution

The right to life and personal liberty is enshrined in Article 21 of the Indian Constitution. This Article has become an umbrella provision for many other rights that are essential to protect the rights of the citizens of India, which may not explicitly be included in the Constitution. The only exception to Article 21 is when deprivation of the right to life or personal liberty of any individual is done as per the procedure established by law.

Article 22 of the Indian Constitution

Article 22 of the Indian Constitution provides protection against any unlawful detention or arrest. It establishes the rights of the arrestees, which include the right to consult or be defended by a legal professional, the right to be informed of the grounds of their arrest, the right to be produced in front of the local Magistrate within 24 hours, etc.

Article 39A of the Indian Constitution

Under Directive Principles of State Policy, Article 39A of the Indian Constitution establishes the State responsibility of free legal aid and assistance for needy citizens. This Article aims to ensure access to justice by every citizen of India through free legal services, to ensure that the State is encouraged to make appropriate legal provisions, schemes, etc.

Article 136 of the Indian Constitution

Article 136 of the Indian Constitution grants the Supreme Court power to entertain a Special Leave Petition to appeal from any verdict, order, sentence or otherwise from any court or tribunal in India regarding any cause or matter.

Article 142 of the Indian Constitution

Article 142 of the Constitution of India empowers the Supreme Court to pass and enforce any orders and decrees that are necessary to ensure complete justice for the cause or matter pending before it. This includes the order for the production of any evidence, document, person or otherwise for the purpose of prosecution.

The Code of Criminal Procedure, 1973

Section 304 CrPC

Section 304 of CrPC deals with legal aid in cases where the accused is unable to secure any legal services. In such cases, the Court has the power to assign a representative advocate for the accused whose expense would be paid by the State as per the Court’s order.

Section 363 CrPC

Section 363 of the CrPC states that a certified copy of the verdict of the Court should be given to all the parties involved in the case, especially the accused when any sentence is given against them. Under this section, an application can be filed to request a copy of the judgement, let it be in the language of the Court or any other language that the applicant is comfortable with. The delivery should be free of cost and immediate, especially in cases of the death penalty or other severe punishments.

Under this section, the applicant can also request copies of orders or verdicts of any Criminal Court despite not being a party to the case with a prescribed fee if the High Court allows so. The fee for the same can be waived if the Court deems it necessary.

Section 387 CrPC

As per Section 387 of CrPC, all the rules stated in Chapter XXVII of CrPC that apply to criminal courts of original jurisdiction shall also apply to the appellate courts such as the Sessions Court or the Chief Judicial Magistrate.

The Indian Penal Code, 1860

Section 417 IPC

Section 417 of the IPC deals with the punishment for cheating, which is imprisonment that may extend up to one year or a fine or both.

Section 467 IPC

This section of the IPC deals with the forgery of security, wills, authority letters or any documents that give the authority of anything of a valuable nature to another individual. Under this section, anyone found to be guilty of forgery shall be punished with imprisonment that may extend up to ten years or a fine or both. Depending on the severity of the case, the punishment can also be extended to imprisonment for life.

Section 468 IPC

Section 468 of IPC deals with the offence of forgery with the purpose of cheating. As per this section, anyone found to be guilty of the said offence shall be punished with imprisonment that may extend up to seven years as well as a fine. This section is applicable for the forgery of both physical and digital copies of a document.

Section 471 IPC

Section 471 deals with using a forged document, let it be a physical or electronic copy, as a genuine one despite knowing that it is not. Under this section, anyone found to be guilty of the same would be punished with the same sentence as given in Section 467, as if he was the one who had forged the documents himself.

Section 511 IPC

Section 511 of IPC is a general provision that deals with the punishment for the attempt of a crime. In simple words, even if the accused was not successful in committing the criminal offence as planned, his attempt to do so would be counted as the same. Under this section, the individual who had attempted an offence under IPC would be tried and punished under the same sentence as if he had been successful in committing the crime.

Judgement in M.H. Hoskot vs. State of Maharashtra (1978)

Ratio decidendi behind the judgement

Article 21 of the Indian Constitution protects the right to life and personal liberty of an individual, which includes all the aspects that may affect the same. Anything that may deprive an individual of their overall development or living life as they wish to shall be covered under this Article. In a manner, this Article stands as an umbrella for other human rights to be included within the ambit of the fundamental rights enshrined in the Constitution.

The only exception to Article 21 stands to be when such deprivation of the right to life or personal liberty is done as per the procedure established by law. In other words, only through the fair and reasonable procedure that is established within the Indian laws can an individual be deprived of the rights under this Article.

The ‘fair and reasonable’ procedure, which also finds its roots in natural justice, also includes the right to appeal to a higher bench than the tribunal the case was tried in. It is applicable for both civil and criminal cases, such as the present Special Leave Petition where the petitioner had filed against the verdict of his previous criminal prosecution.

Appeals are an integral part of fair procedure and natural justice, giving both the parties of the case reasonable times and stages to be heard and trialled for. Every step of the appeal is crucial as well as obligatory and any inaction or obstacle in the same could lead to injustice and infringement of the rights of the party, as seen in the present case.

In the judgement of the present case, the Supreme Court emphasised that every step in the right of the appeal is crucial for a fair procedure and if any such step is stultified due to the action or inaction of another, it would be unfair and lead to the infringement of rights enshrined under Article 21 read with Article 19 of the Indian Constitution. The Court also highlighted how this view was previously established in the Maneka Gandhi case, where it was laid down that without a fair legal procedure, no one can be deprived of their right to personal liberty.

In addition to this, the Supreme Court also emphasised the fact that the right to free legal aid, enshrined under Article 39A, is also a necessary part of the access to justice for those in socially and economically backward classes. Since the legal fees can be quite high and often unaffordable for many people, opting for free legal aid as provided by the State can prevent the sense of handicap that people from such backgrounds may often feel in the absence of professional legal service.

Observations by the Supreme Court

The Supreme Court observed two major points in the present case; the first one being the delivery of the certified copy of the judgement to the accused or prisoner within the limitation period for further appeal and the second one being the provision of free legal services for the individuals, especially prisoners, who are unable to secure professional legal services due to their social and economic backgrounds. Both of these points lie under the responsibilities of the State, specifically under Article 21 and apply wherever procedural laws provide, including for further appeals to a higher bench.

In the present case, the petitioner’s right to appeal was stultified due to the delay in the delivery of the copy of the verdict of the Bombay High Court. This inaction on the part of the State, on whom the responsibility to deliver the copy of the order or the judgement to the prisoner lies, the petitioner was not able to appeal and had to wait till the fulfilment of the full term of his imprisonment before doing so.

Failure of proper service of the order or judgement to the prisoner led to the infringement of the rights to appeal of the prisoner while also paving the path to illegal or unlawful detention if continued so without correction. Just because an individual is imprisoned does not entail that they are stripped of their constitutional and statutory rights, including that of appeal and special leave petitions.

The Court also observed that legal aid is a crucial part of ensuring justice is accessible to everyone, regardless of their status or background. Articles 39A and 21 read with Article 142 of the Indian Constitution empower the Court to assign a competent counsel for accused parties who are imprisoned, especially in case they are unable to secure legal services due to their economic background.

It was further observed that while Article 22 (1) of the Indian Constitution also mentions a legal practitioner, the scope of it is much more generalised. Thus, the purpose of legal aid in prison situations, Article 21 is to be read with Article 39A.

Holding of the Supreme Court

In view of the abovementioned reasonings and observation, the Supreme Court condoned the delay of the delivery of the verdict to the petitioner but still dismissed the present petition. However, the Court established some rules regarding the service of a copy of the judgement to the parties along with free legal aid for those unable to secure legal services.

The Supreme Court held that all the parties of the case should be provided with a copy of the order or judgement passed by the Court, let it be in a civil case or criminal. Especially in cases where the accused is sentenced to imprisonment, the accused has the right to request a certified copy of the judgement sentencing him the same.

If the accused is already imprisoned, then the service of the certified copy of the judgement or the order passed by the Court should be the responsibility of the jail authorities. Such delivery should be made without unnecessary delays and within the period for the filing of an appeal. To make sure it is delivered to the accused, a written acknowledgement of such delivery should also be obtained for the same.

The Court also held that in the cases where the prisoner seeks to file a revision of their case or even an appeal, the jail authorities shall provide every facility to help the prisoner in his endeavour. Any obstacles during such a step would lead to grave injustice, as seen in the present case.

It was further held that any jailor or prison authority withholding the delivery of copies of official Court documents to the prisoners would be held liable for violation of Section 363 of CrPC and Article 21 of the Constitution. This is due to the fact that such actions stand as an obstacle to fair and reasonable procedure and may lead to unlawful or illegal detention of the prisoner.

The Court also extensively discussed the necessity of free legal aid in the present judgement, stating that it is the obligation of the Court to assign a competent counsel for the prisoner in cases where the prisoner is unable to secure professional legal services due to poor economic background or lack of communication with anyone outside, especially for cases where the gravity of the offences and the subsequent sentence is severe and grave injustice may occur without proper counsel hired for the prisoner. The prisoner can also object to such an assignment or even to the particular counsel assigned.

The legal fees of the assigned counsel would be paid by the State that had prosecuted the accused, which shall be equitably fixed by the Court where the case is tried.

Analysis of the judgement

The present judgement stands to be one of the precedents that made the presence of free legal aid more prominent in India, especially for those in prison. As one may already be aware, there is a lot of stigma against those who are in imprisonment — even if one may be acquitted of all their charges, they may still face issues later on due to being entangled in legal issues and facing criminal charges.

In addition to this prejudice, the status of most prisoners is not quite well off either. Many prisoners are shut down once in jail and there have been many incidents where the prisoners’ basic human rights have been infringed horrendously.

In such circumstances, access to justice for prisoners becomes quite hard, especially given most of them are quite disconnected from the outside world and do not know how to secure legal services for themselves from the prison. Being imprisoned and found guilty of one’s crimes does not equate to one’s status being degraded from a person to a non-person.

The Supreme Court’s holding in this judgement led to a massive improvement in the justice rate for those in prison, especially in the context of their right to appeal and request for a copy of the verdict of their sentencing. Moreover, the detailed discussions as well as guidelines given in regard to the scope of free legal aid have also paved the path for further development of the concept, which is quite necessary for a country like India where many people seek justice but cannot afford legal services. Unlike the current times, the awareness about free legal services and assistance was not as prevalent back then and this case set a precedent to make them more accommodating for the needful.

While the petition was dismissed, the guidelines given by the Supreme Court regarding procedural and legal delays were quite crucial for the judicial development of the rights of the prisoners. Furthermore, the present judgement also drew out detailed instructions on the delivery of legal documents and transcripts of the respective cases to the prisoners, which was also a major step towards securing the rights of the imprisoned individuals. Holding the State accountable for their negligence was also a necessary step towards preventing the repeat of any such incident.

The further expansion of Article 21 read with Article 39A and Article 142 to interpret a wider scope for free legal aid as well as to assign a competent counsel for their representation was a vital part of this judgement that shaped the judicial system as we currently know it.

Significance of M.H. Hoskot vs. State of Maharashtra (1978)

The present judgement brings limelight to several issues regarding the justice system, especially the treatment of prisoners and how the rights of the prisoners are the first to always be cut down. As mentioned earlier, there’s a strong social prejudice against those imprisoned and this carries on during and even after the individual serves their term.

Such prejudice is especially noticed in cases where the rights of the prisoners are violated, as seen in the present case. The petitioner was robbed of his right to appeal within the limitation period because of a delay that could not be reasonably proven either. It was a product of carelessness and negligence, which can be seen as a recurring theme in cases relating to prisoners. Such negligence then leads to not only a violation of fundamental rights but also years of the life of the prisoners wasted as they are illegally detained.

The procedural and legal delays regarding the same were also addressed in the present judgement, along with the rights of the prisoners to free legal aid and assistance. This led to this case being cited as a landmark judgement for the development of prisoners’ rights as well as free legal aid for the needy, let it be those stricken by poverty or by those who are unable to secure legal services due to circumstances like being in prison.

This judgement was the first one to recognize the prisoner’s rights, the view of which was then supported by several other landmark judgements such as the Maneka Gandhi v. Union of India (1978). In this case, Article 19 read with Article 21 of the Indian Constitution, established that fair legal and judicial procedures are a part of personal liberty, without which no one can be deprived of their right to life and personal liberty.

Another landmark judgement that cited the present case and its view regarding free legal aid was Hussainara Khatoon v. Home Secretary, State Of Bihar (1979). In this case, the Supreme Court reiterated that free legal aid and assistance is a vital part of the rights of an accused party, regardless of the crime they have committed. It also discussed the right to legal assistance under Article 21 of the Constitution and the need for speedy trials for undertrial prisoners to avoid further violation of their rights.

Khatri v. The State of Bihar (1980) also followed the principles set by the present judgement, where the Court held that it was the constitutional obligation of the State to provide legal aid and assistance to an accused party who was unable to afford or find professional legal services. It also discussed the State’s role in ensuring free and fair trial and how it is their obligation to do so.

In addition to these cases, further developments have been brought to minimise the procedural and legal delays, such as the recent introduction of the portal called ‘FASTER 2.0’ which catalogues official Court orders and verdicts of sentences and releases of prisoners. The portal is available and easily accessible to all the jail authorities across India, with the aim of allowing immediate intimation without any confusion or delay of the same. The copy of the verdicts or orders of the Court from the portal can then be printed and shared with the prisoners to avoid any unnecessary delays.

Furthermore, statutory authorities such as the National Legal Services Authority or NALSA were also established by legislation like the Legal Services Authority Act, 1987 to promote and regulate free legal aid and assistance at different levels of the judiciary. In 2016, the Model Prison Manual was introduced which gave further guidelines and information about legal services and assistance that can be opted by imprisoned individuals.

Nationwide schemes such as the Modernization of Prisons Scheme were also launched in the early 2000s to improve the conditions of the prisons, which was later turned into the Modernisation of Prisons Project in 2021. The project aims to provide financial assistance to several prisons throughout the nation, improving the living conditions of the prisoners while also introducing rehabilitation programmes for the prisoners. Other projects, such as the E-Prisons Project, were also introduced by the government to digitalise the jail security systems to keep up with the times.

Conclusion

In the end, the judgement of M. H. Hoskot v. State of Maharashtra, set a precedent for prisoner’s rights in India, bringing recognition to the violation faced by the imprisoned individual and their need for legal assistance in such circumstances. While the petition itself was dismissed, the guidelines regarding free legal aid and the delivery of legal documents to the prisoners by the judicial authorities were discussed in detail.

This judgement also highlighted the negative consequences of procedural and legal delays, especially in relation to rights like the right to appeal that have a short limitation period. The duties of the authorities to prevent such mishaps were addressed by the Supreme Court at length, along with their obligation to provide any and all legal assistance that the prisoners may need for filing for appeal or revision.

Frequently Asked Questions (FAQs)

What are the basic rights of a prisoner?

In India, prisoners retain all their basic human rights as any other citizen except the restriction of the right to life and personal liberty with the due procedure established. These rights include the right to be represented by a legal professional, the right to be treated with dignity, the right to be informed of their bail and Court verdicts, etc. Most of these rights are enshrined in the Constitution as well as other statutory provisions like the Prisoner’s Act, 1894.

Can prisoners get free legal aid?

Yes, prisoners also have the right to free legal aid enshrined in Article 39A of the Constitution when read with Article 21. Individuals unable to secure legal services due to poor economic background or due to a complete disconnect from the outside world can opt for legal aid that will be provided by the State.

Is free legal aid part of fundamental rights?

Yes, free legal aid is a part of both the fundamental rights under Article 21 as well as the Directive Principles of State Policy under Article 39A.

References

M. Seervai, Constitutional Law of India, Universal Law Publishing Co., Reprint 2013.
M. Bakshi, The Constitution of India, Universal Law Publishing Co., 2014.
Dr J.N. Pandey, Constitutional Law of India, Central Law Agency, Allahabad, 37th edition, 2001.

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Difference between Fundamental Rights and Fundamental Duties

By

Rachit Garg

-

July 4, 2024

0

This article was written by Sambit Rath and further updated by Jyotika Saroha. In this article, the author aims to differentiate between fundamental rights and fundamental duties. It elaborates on the concepts of fundamental rights and fundamental duties. It mainly deals with the difference between these two concepts.

Table of Contents

Introduction

The Indian Constitution is the supreme law of this country. It is the lengthiest written Constitution amongst all the countries in the world. It contains within it the fundamental rights, duties, directive principles of state policy, and duties to be performed by the government. It was drafted by the Constituent Assembly chaired by Dr. B.R. Ambedkar in 1947, and it came into force on 26th January 1950. Since then, there have been various amendments to the Constitution, among which one such amendment was the addition of Part IVA through the 42nd Constitutional Amendment.

Fundamental rights are those basic rights that the citizens of a country enjoy and that have been provided to them within the Indian Constitution. Whereas, fundamental duties are the moral and ethical principles that impose a duty upon the citizens to fulfil their obligations towards the growth and development of their country. The existence of two “fundamentals” raises the question as to what is the difference between the two? Are both of them legally enforceable? What is the need for either of the two? In this article, we’ll endeavour to answer these and a few other questions.

What are Fundamental Rights

As the name suggests, fundamental means something that is necessary in order for something else to function. Thus, fundamental rights are basic human rights that are available to the citizens of India irrespective of place of birth, religion, or gender. They are the foundation of any democracy, as they enable the people living in a democratic society to achieve their potential without fear of suppression. These rights ensure individual liberty. These rights are the privileges granted to the citizens of a country, and they are enforceable in a court of law. They provide protection to their citizens and empower them with certain rights and freedoms. They are justiciable in nature, and in India, there are six fundamental rights provided in Part III of the Indian Constitution, from Article 14 to Article 35.

The Indian Constitution guarantees and protects these fundamental rights. Let’s look at each one of these rights:

Right to Equality (Articles 14-18)
Right to Freedom (Articles 19-22)
Right against Exploitation (Articles 23-24)
Right to Freedom of Religion (Articles 25-28)
Culture and Educational Rights (Articles 29 -30)
Right to Constitutional Remedies (Articles 32)

Right to Equality (Articles 14-18 of the Indian Constitution)

Article 14 : Equality before the law

This Article states that all individuals are equal in the eyes of the law and are treated equally. It also states that individuals enjoy equal protection of the law. This means that in similar situations, individuals will be treated in the same manner. Article 14 lays down two important concepts: ‘equality before law’ and ‘equal protection of laws’.

Equality before law

The concept of ‘equality before law’ came from Britain during the 16th century and was propounded by renowned jurist A.V. Dicey. It states that no one is above the law, and no one shall be punished or made to suffer except for a breach of the law. It further provides that every man shall be subject to the ordinary laws of the country. But the right guaranteed under Article 14 is not absolute, and certain restrictions are imposed upon it. It includes the privileges and immunities given to the President of India or to the Governor of a State under Article 361 of the Constitution. According to clause (2) of Article 361, no criminal proceedings shall be instituted against the President of India or the Governor of a State. Also, during the period of emergency, the right guaranteed under this Article may be suspended when the proclamation is in operation.

Equal protection of laws

The concept of ‘equal protection of laws’ is taken from the Constitution of America. It implies equal protection under equal circumstances. Article 14 restricts the classification as hostile and discriminatory in nature. However, it does not restrict the classification, which is reasonable in nature. In the cases of Budhan Choudhry v. State of Bihar (1955) and Vajravelu Mudaliar v. Special Deputy Collector for Land Acquisition (1965), it was laid down that for a classification to be reasonable, it must fulfil two criteria:

The said classification must be based on an intelligible differentia, and
The said classification, based upon intelligible differentia, must be related to the object that is sought to be achieved.

Article 15 : Prohibition from Discrimination

This Article prohibits discrimination of any kind and states that no individual can be discriminated against based on religion, race, sex, caste, or place of birth. This Article is further divided into six clauses:

Article 15(1): This clause suggests prohibiting the state from discriminating against any individual. It states that the state shall not make discrimination against any citizen on the ground of religion, race, caste, sex, place of birth, or any of the grounds laid before.
Article 15(2): This clause states that no person shall be denied access to any public place like railway stations or use public facilities like wells, roads, etc. It provides that no citizen shall be discriminated against on the similar grounds laid down in clause (1) of Article 15 and subject to any disability, any restriction with respect to access to restaurants, shops, hotels, places of public entertainment, and the use of wells, bathing places, tanks, roads, places, etc. This provision paves the way for Article 17 to abolish untouchability.
Article 15(3): This clause provides for exceptions to clauses (1) and (2) for the prohibition of discrimination. It provides that the state shall make special provisions for women and children. This provision was introduced with the objective of uplifting women and children, who are considered the most vulnerable sections of society. This provision was made to neutralise the gap between gender equality and empower women to overcome the obstacles that come their way.

Article 14 protects all persons, be they citizens of India or foreigners, whereas Article 15 has a narrow scope and only extends to the citizens of India.

In the case of Anjali Roy v. State of West Bengal (1952), the petitioner (Ms. Anjali Roy) completed her schooling and wanted to take admission to Hooghly Mohsin College to pursue her honours degree. At the time when she filled out the application form for the purpose of taking admission to said college, her application was transferred to a women’s college nearby that was newly established. The college did not have an honours program or proper educational facilities. The petitioner filed a writ petition under Article 226 of the Indian Constitution in the High Court of Calcutta for the purpose of issuing an appropriate writ directing the principal of the said college to take admission. The Court stated that the Women’s College was established with respect to the special provisions for women, and it was held that she was not denied admission because she was a woman but because the Women’s College was established as a step towards the development and advancement of women as per the special provisions given under Article 15(3) of the Constitution.

Article 15(4): This clause allows the state to make special provisions for weaker sections of society, like the scheduled caste, scheduled tribe, and other weaker sections recognized by the government. The said provision was not included at the time of the commencement of this Constitution but was added by way of the First Amendment Act, 1951, in order to correct the wrongs done to the backward classes and to provide them with social justice. The concept of social justice has been considered as a part of the basic structure by the Apex Court.
Article 15(5): This clause allows the state to make special provisions for the Scheduled Castes and Scheduled Tribes for their admissions to educational institutions for the purpose of their development and advancement. The term educational institutions refers to public as well as private educational institutions, be they aided or unaided, but excludes educational institutions established for minorities. The said provision was not a part of the Constitution at the time of its commencement but was later added by way of the 93rd Amendment Act 2005.
Article 15(6): This clause states that the provisions under Article 19(1)(g) and Article 29(2) shall not prevent the state from making special provisions for the development of economically weaker sections except those mentioned in clause (4) &(5) of this Article and special provisions for their admissions to educational institutions, which include private institutions as well as those aided or unaided by the states; however, it does not cover the educational institutions of minorities given under Article 30(1).

Article 16 : Equality of opportunity and matters of public employment

This Article aims to provide equal opportunity to citizens in employment provided by the state. This Article is further divided into 5 parts:

Article 16(1): This clause states that all citizens should be given equal opportunity in matters of employment.
Article 16(2): This clause prohibits discrimination in matters of employment provided by the state.
Article 16(3): This clause allows the parliament to make laws that require residential requirements for public employment.
Article 16(4): This clause allows the parliament to make special provisions for weaker sections of society in matters related to public employment in order to promote the principle of social justice, which is considered a part of the basic structure by the Apex Court.
Article 16(5): This clause permits the parliament to make laws that require a person belonging to a particular religion to be appointed to an institution of that religion.

Article 17 : Abolition of Untouchability

This Article prohibits the practice of untouchability. Practising untouchability in any form is a punishable offence.

Article 18 : Abolition of Titles

This Article prohibits the state from conferring titles. However, the state is not prohibited from conferring titles that are academic or military in nature.

Right to Freedom (Articles 19-22 of the Indian Constitution)

Article 19 of the Indian Constitution

This Article guarantees 6 freedoms to the citizens of India.

Freedom of speech and expression

Article 19(1)(a) is a very important or essential right that provides citizens with the freedom to express their views in different forms, whether by speech, acts, images, art, etc. However, this right is not absolute, and certain reasonable restrictions are imposed upon it that are given under Article 19(2). It states that the right guaranteed under clause (a) shall not affect or prevent the state from making any law, and there are certain reasonable restrictions imposed upon it, which include interests in the sovereignty and integrity of the country. This was added by way of the 16th Amendment Act, 1963, security of state, public order, decency, morality, contempt of court, etc.

In the landmark case of Romesh Thapper v. State of Madras (1950), the Supreme Court widened the interpretation of freedom of speech and expression and stated that it includes the freedom to present ideas and views. In another case, Sakal Papers v. Union of India (1961), freedom of the press was also included within the ambit of freedom of speech and expression. The Court stated that freedom of speech and expression is a vital part of our Constitution, and it also includes the freedom to publish one’s opinion.

Freedom of peaceful assembly without arms

Article 19(1)(b) provides for the freedom to assemble peacefully without arms, which implies that the assembly must be non-violent and should not cause any inconvenience to the public. However, if the assembly is disturbing public peace, then it will not come under the freedom given in this Article. This right has certain reasonable restrictions imposed upon it and is given under Article 19(3), which includes public order and maintaining the sovereignty and integrity of the country.

In the case of Kameshwar Prasad v. State of Bihar (1962), an appeal has been filed before the Hon’ble Supreme Court by the petitioner, Kameshwar Prasad, against the order of Patna High Court for dismissing their writ petition that was filed against the notification of the Government of Bihar, which introduced the Bihar Government Servants Conduct Rules, 1956. Rule 4A restricts or stops government servants from taking part in any strike or demonstration regarding the condition of their services. The High Court of Patna stated that said rule comes within the purview of reasonable restrictions imposed under Article 19(3) of the Indian Constitution and dismissed the writ petition filed by the petitioner. Thereafter, the petitioner went to the Supreme Court by way of appeal, wherein the Court upheld the decision of the High Court of Patna by stating that there is no way to right to strike within the Fundamental Rights; however, the Apex Court partly allowed the appeal by stating that the rule restricting demonstrations by government servants is definitely violative of Articles 19(1)(a) and 19(1)(b) and must be struck down. The Court also stated that it cannot be accepted that the class of government servants is excluded from the protection of fundamental rights under Part III of the Indian Constitution.

Freedom of forming associations or unions

Article 19(1)(c) provides for the freedom to form associations and unions, which includes the right to form or join or not to form or not to join the associations or unions. It also has certain reasonable restrictions imposed upon it under Article 19(4), which are the restrictions imposed in the interest of public order, morality, integrity, and the sovereignty of the country.

Freedom of movement throughout the territory of India

Article 19(1)(d) provides for the right to move freely throughout the territory of India and provides immunity to the citizens against the arbitrary actions of states. This right is available only to the citizens of India and not to foreigners.

Freedom of residence and settlement in any part of the territory of India

Article 19(1)(e) provides for citizens to reside and settle in any part of the territory of India. The reasonable restrictions for Articles 19(1)(d) and 19(1)(e) are given under Article 19(5), which includes the restrictions imposed in the interest of the general public for the protection of the interests of Scheduled Tribes.

Freedom of profession, occupation, trade, or business

Article 19(1)(g) provides for the right to practise any profession, trade, or business, and it is the duty of the state to ensure that no individual is deprived of this right. This right gives the citizen the right to choose his or her source of living. However, there are certain reasonable restrictions imposed upon this right, and this includes restrictions imposed in the interest of the general public.

Article 20 of the Indian Constitution

Protection in respect of conviction for offences: This Article provides protection to individuals accused of crimes. It has 3 sub-clauses:

Article 20(1): This clause contains provisions related to the ex-post-facto law, which provides that no person shall be punished for acts that were not punishable at the time of commission.
Article 20(2): This clause contains provisions regarding ‘double jeopardy’ which state that a person cannot be prosecuted and punished for the same offence more than once.
Article 20(3): This clause contains provisions regarding protection against self-incrimination and states that no person accused of a crime can be compelled to be a witness against himself.

Article 21 of the Indian Constitution

Protection of life and personal liberty: This Article provides the right to life and personal liberty. No person can be deprived of this right except according to the procedure established by law. This Article has been given a wider connotation by the Supreme Court in the context of the case and includes the right to a healthy environment, the right to sleep, the right to education, etc. within the ambit of the right to life.

The landmark case of Maneka Gandhi v. Union of India (1978) is related to Article 21, wherein the petitioner’s passport was impounded by the Regional Passport Office at New Delhi when she went to the Delhi Airport for the purpose of travelling somewhere. The reason for impounding her passport was not stated by the Ministry of External Affairs. The petitioner went to the Supreme Court, stating that it was a violation of her right to travel abroad. The Apex Court held that the order given by the government for impounding the petitioner’s passport is arbitrary and violative of Articles 14 and 19 of the Indian Constitution. The Court, in this milestone judgement, interlinked Articles 14, 19, and 21 as the golden triangle. This judgement is very significant in the development of Article 21.

Article 22 of the Indian Constitution

Protection against arrest and detention in certain cases: This Article provides procedural safeguards to individuals in cases of arrest, like the right to be informed of the grounds of arrest and the duty of the police authorities to produce the arrested individual before a magistrate within 24 hours.

Right against Exploitation (Articles 23-24 of the Indian Constitution)

Article 23 of the Indian Constitution

Prohibition of traffic in human beings and forced labour: This Article prohibits human trafficking and any kind of forced labour. It not only protects citizens from the actions of states but also provides protections against the actions of private individuals.

Article 24 of the Indian Constitution

Prohibition of employment of children: This Article prohibits children below the age of 14 from being employed in hazardous places like factories or mines. But the children working in non-hazardous employment are still allowed. Various laws were passed in pursuance of Article 24, which includes the Factories Act, 1948, the Mines Act, 1952, the Child Labour and Prohibition Act, 1986 etc.

In People’s Union for Democratic Republic v. Union of India (1982), a writ petition was filed before the Supreme Court for the gross violation of Article 24 of the Indian Constitution, wherein some child employers were working in inhumane and dangerous conditions at a construction site in Delhi. The said matter came to the attention of the People’s Union for the Democratic Republic, which resulted in the filing of this petition. The main issue was whether Article 21 includes the right to live life with dignity. The Supreme Court considered the scope of Articles 23 and 21. The Court stated that Article 23 includes forced labour as well, and it is a violation of Article 21, which includes the right to live life with dignity.

Right to freedom of religion (Articles 25-28 of the Indian Constitution)

Article 25 of the Indian Constitution

Freedom of conscience and religion: This Article ensures freedom of religion for every citizen of the country.

The case of Bijoe Emmanuel v. State of Kerala (1987) is popularly known as the national anthem case. In this case, three students studying in a government school situated in a district of Kerala were debarred from school for not singing the national anthem due to their different religious beliefs, which eventually led to disciplinary action against them by the school authorities. The three children filed a writ petition before the Kerala High Court, where the petition was dismissed. Then, they approached the Supreme Court by way of filing an SLP under Article 136 of the Constitution. The Supreme Court ruled in favour of students and stated that the action taken by the school authorities was arbitrary in nature and violated Article 25 of the Constitution, which provides for freedom of conscience and religion. It further held that Article 25 not only includes the freedom to hold religious beliefs but to express them as well. There is a gross violation of students fundamental rights, and the action was taken on unreasonable grounds. By way of this judgement, the Apex Court observed the significance of Article 25, which deals with the freedom of conscience and religion.

Article 26 of the Indian Constitution

Freedom to manage religious affairs: This Article gives every religious denomination the right to establish and maintain institutions for the purposes of religion and charity; in matters of religion, the right to manage its own affairs; the right to own and acquire movable and immovable property; and the right to administer such property as per the law; however, these rights are subjected to public order, morality, and health.

In the case of Dargah Committee, Ajmer v. Syed Hussain Ali (1961), the Dargah Khwaja Saheb Act, 1955, was in question, wherein the members claimed that it violates the fundamental rights of the Muslim community who belong to the Soofi Chista order. The members of said order contended that they are the sole owners of Ajmer’s shrine, but the dispute was that the Act only permitted Muslims belonging to the Hanafi community to take over the management of said Dargah. It was contended that the Act infringes on their fundamental right enshrined under Article 26, which deals with the freedom to manage religious affairs. The respondents went to the High Court of Rajasthan by way of writ petition under Article 226, wherein it was stated that the Act is unconstitutional and passed in favour of the respondents. The appellants approached the Supreme Court, and it set aside the order passed by the High Court, which observed that Article 26 is a significant provision that provides safety to the religious denominations in order to manage their religious affairs. It also restricted the acts of state from interfering in such issues unless there was a sufficient reason for the same.

Article 27 of the Indian Constitution

Freedom as to payment of taxes for promotion of any particular religion: This Article provides that no taxes shall be imposed by the state for the promotion and maintenance of a particular religion.

The landmark case of The Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shhirur Mutt (1954), is related to the violation of Article 27 of the Indian Constitution. In the said case, the Mathadhipati of Krishna Mutt filed a petition in the High Court of Madras and prayed for issuing the writ of prohibition against the order of the board for implementing the scheme for the purpose of managing the affairs of the Mutt as per Section 62 of the Madras Hindu Religious Endowments Act, 1927. The petitioner challenged the constitutionality of the Act. The High Court of Madras held some sections of the said Act as unconstitutional and in contravention of some fundamental rights, such as Articles 25, 26, and 27. However, aggrieved with the decision of the High Court, the petitioner presented an appeal before the Hon’ble Supreme Court. The main issue was whether the money taken under Section 76 of the Act would be considered a tax or not. The Court stated that it is similar to tax, but it depends upon the capability of the payer, and hence it is a tax under Section 76. The Court held that Article 27 is not violated; however, some sections of the Act are in conflict with the Fundamental Rights, but the rest of the Act is valid and constitutional. The Supreme Court dismissed the appeal filed by the petitioners.

Article 28 of the Indian Constitution

Freedom as to attendance at religious instruction or religious worship in certain educational institutions: This Article provides that religious groups can establish educational institutions to disseminate religious instruction.

Cultural and Educational Rights (Articles 29-30 of the Indian Constitution)

Article 29 of the Indian Constitution

Protection of interest of minorities: This Article provides that a community of people has the right to conserve their language, script, or culture.

Article 30 of the Indian Constitution

Right of minorities to establish and administer educational institutions: This Article permits religious and linguistic minorities to establish educational institutions.

Article 32 of the Indian Constitution

Right to Constitutional Remedies (Article 32): This Article guarantees remedies in cases of violation of the fundamental rights of citizens. This permits citizens to approach the Supreme Court if their fundamental rights are violated. This Article empowers the Supreme Court to issue appropriate orders, directions, and writs in the nature of Habeas Corpus, Mandamus, Quo Warranto, Certiorari, and Prohibition. Dr. B.R. Ambedkar has named this Article as the ‘heart and soul’ of the Indian Constitution. It keeps a check on the arbitrary actions of states and authorities in order to protect and promote the fundamental rights of citizens.

The case of ADM (Additional District Magistrate) Jabalpur v. Shivkant Shukla (1976) is popularly known as the Habeas Corpus Case, wherein a political leader named Shivkant Shukla was arrested during the period when an emergency was imposed in 1975 and the Fundamental Rights were also suspended. He was arrested and detained as per the provisions of the Maintenance of Internal Security Act (MISA), 1971. Meanwhile, his wife filed a writ petition of Habeas Corpus. The issue was whether the right to life and personal liberty under Article 21 could be suspended during an emergency. The Supreme Court, in its verdict by a majority of 4:1, held that during a period of emergency, the right to life and personal liberty could be suspended, and the judiciary cannot intervene in the process of detention of an individual as per the Maintenance of Internal Security Act. The judgement pronounced by the Supreme Court in this case was later criticised for its negative stance on fundamental rights. However, the said case was overruled in another landmark case, K.S. Puttaswamy v. Union of India (2017), wherein the Apex Court ruled that the right to privacy is a fundamental right enshrined under Article 21 of the Constitution.

It is to be noted that the right to property was initially a fundamental right. At present, it is a legal right under Article 300A, which was added by the 44th Constitutional Amendment Act, 1978.

What are Fundamental Duties

Fundamental duties are the moral obligations of the citizens towards the country. They are provided in Article 51A under Part IVA of the Indian Constitution. Originally, these weren’t a part of the Constitution. They were added by the 42nd and 86th Constitutional Amendment Acts, which were recommended by the Swaran Singh Committee. The concept of fundamental duties was borrowed from the USSR. These duties were drafted to prepare an ethical, moral, and cultural code of conduct. These are to be followed by citizens to protect the sovereignty, unity, and integrity of the country. The fundamental duties play a significant role in the progress and advancement of a country, as they impose a duty upon the citizens to perform their obligations towards their country. Basically, it is the responsibility of a citizen to perform certain acts that he is obliged to perform in order to promote the growth and development of the country.

At first, there were 10 Fundamental Duties that were added by the 42nd Amendment, and later on, one more was added by the 86th Amendment. The 11 fundamental duties are as follows:

To abide by the Constitution and respect the Indian flag and the National Anthem.
To follow the ideas that inspired the freedom struggle.
To uphold and protect the sovereignty, unity, and integrity of India.
To defend the country and serve the nation when called upon.
To promote harmony and brotherhood among the people of India and to renounce derogatory practices that demean women.
To value and preserve the rich heritage of our culture.
To protect and improve the natural environment and have compassion for living creatures.
To develop scientific temper, humanism, and a spirit of inquiry.
To protect public property.
To strive towards excellence in all spheres of individual and collective activities.
To provide educational opportunities to children between 6-14 years of age, it is also the duty of the parents to ensure the same.

The 11th Fundamental Duty was added by way of the 86th Constitutional Amendment Act, 2002.

Case laws relevant to fundamental duties

Shri Ranganath Mishra v. Union of India (2003)

In the present case, the former Chief Justice of India, Hon’ble Shri Ranganath Mishra, wrote a letter dated 18-03-1998 to the then Chief Justice of India, V.N. Khare, and the said letter was treated as a writ petition. The present writ petition was heard by a Constitution bench. In the said letter, it was stated that it is the responsibility of a citizen to be aware of their rights as well as their duties, and it becomes the duty of the state to make its citizens aware of those duties in order to maintain a proper balance. The letter was treated as a writ petition in the public interest. The Supreme Court ordered a committee, under the expertise of Justice J.S. Verma, to make recommendations for the purpose of spreading awareness and knowledge about fundamental duties. The said committee met two times and submitted its report in due course to the Court. In the said report, it talked about the national anthem, which should be learned by every citizen, and to sing it properly by heart.

All India Institute of Medical Sciences Union v. A.I.I.M.S. (2001)

In the present case, the Apex Court supported the merit test over reservation regarding admission to PG medical courses. For the purpose of admission to such PG courses, the AIIMS holds a national entrance examination, and the AIIMS follows a rule of 40% reserved seats in these courses for graduates under the UG program, which later resulted in lower marks for internal students, and due to the said reason, the said rule was challenged in the Supreme Court. The Supreme Court, in its judgement, set aside the said rule by stating that it is unconstitutional as it is in contravention of the right to equality under Article 14. It was observed that the reservation inside the institution does not support the principles laid down in the Constitution. The Apex Court also stated that fundamental duties hold the same value and importance as fundamental rights; both are termed as ‘fundamental’ and have equal importance. They are both related to each other.

Enforcement of Fundamental Rights

We have seen that there are certain fundamental rights available to the citizens of this country. Now the question that arises is how are these rights enforced? What gives these rights the power to eclipse a proposed law?

The answer lies in Article 13 of the Indian Constitution. This Article empowers the fundamental rights that are available to citizens. Basically, Article 13 shields these fundamental rights from infringement by the government. Article 13(1) states that any law in force before the commencement of the Constitution, as long as they are inconsistent with any fundamental right, will be void. This means that any pre-Constitution era law that is in force but has some part of it that is infringing on these fundamental rights will become void from the date on which the Constitution of India came into effect, which is 26th January 1950. Article 13(2) declares that the state shall not make any law that takes away or alters fundamental rights. Also, any such law, to the extent of the infringement, shall be void. This means that the state cannot abuse its powers and meddle with the fundamental rights of its citizens.

Now, there needs to be a remedy if there is a right, or else it will be just words on paper and nothing more. For this, the Constitution-makers have provided the ultimate defence. Article 32 of the Indian Constitution is the ultimate defence. It states that infringement of the fundamental rights of a citizen would allow them to approach the highest court of the country, the Supreme Court. So when the state deprives an individual of his fundamental right, he can approach the Supreme Court for legal remedy. It is important to note that Article 32 is itself a fundamental right, thereby ensuring that the state cannot take away this power from the citizens. Article 226 also allows citizens to approach the High Courts for the same. Some key differences to note here are that Article 32 is a fundamental right and Article 226 is a legal right. The scope of the High Courts is wider, as they can issue writs for infringement of legal rights in addition to fundamental rights, unlike the Supreme Court, which can only issue writs in cases of violation of fundamental rights.

How is the performance of Fundamental Duties ensured

If fundamental duties are moral obligations towards the country, then how is the performance of these duties ensured? It is important to note that fundamental duties are non-justiciable in nature. This means a person cannot be punished for not performing his fundamental duties. The reasons for this are discussed in the next section below. It is also important to note that there is nothing in the Indian Constitution that provides for direct enforcement of these duties by the courts. That means no one can approach the court to seek a remedy if there is a non-performance of these duties by someone else.

However, the Parliament can enforce these duties indirectly by making suitable legislation. Nothing stops the Parliament from making a law that prohibits any act that is in violation of its duties. This is how the fundamental duties can be made indirectly enforceable. Let’s look at some examples:

To ensure the performance of the duty given in Article 51A(g), which is the duty to protect the environment, the Supreme Court held that it is the duty of the government to take steps to make this provision effective. It also issued some directions to the government:

To direct educational institutions throughout the country to impart lessons in the first ten classes relating to the protection and improvement of the environment.
To produce textbooks written on this topic and distribute them for free.
To introduce short-term courses to train teachers.
All government employees and authorities are to introduce cleanliness weeks and take measures to keep their surroundings clean.

Prevention of Insults to National Honour Act, 1971: This Act prohibits the destruction or insult of National Symbols, which include the National Flag, National Emblem, National Anthem, the Constitution, and the map of India. It includes punishment with imprisonment, which may extend to three years, a fine, or both, for the disruption of the National Anthem.
Protection of Civil Rights Act, 1955: An Act to prescribe punishment for the preaching and practice of untouchability.
Environment (Protection) Act, 1986: This Act allows the government to protect and improve the environment and also restricts anyone from operating or setting up industries on environmental grounds.
Forest (Conservation) Act, 1980: This Act of the Parliament of India provides for the conservation of forests and matters connected therewith or ancillary or incidental thereto.

Can one be punished if they do not perform their Fundamental Duties

Fundamental duties, by their nature, are not enforceable or justiciable, i.e., no person can be held liable for non-performance of fundamental duties. The Swaran Singh Committee had proposed penal actions for non-performance of these duties, but these were rejected later. The reason is that the majority of the Indian population was illiterate at that time, and the language used to define the duties makes it tougher for someone with limited knowledge to grasp the message. In such a scenario, making these duties justiciable would have led to a lot of commotion, as every other person would have violated these duties unknowingly. As we have seen in the above section, no one can be punished if they do not perform their fundamental duties. But one can be punished if they perform a prohibited act that violates their fundamental duties. Hence, there is no punishment for non-performance, but there is punishment for acts that violate fundamental duties.

Difference between Fundamental Rights and Fundamental Duties

Basis	Fundamental Rights	Fundamental Duties
Definition	Basic human rights are available to every citizen, irrespective of race, place of birth, religion, caste, creed, or gender.	The moral obligation of the citizens towards the country is to protect its sovereignty, unity, and integrity.
Part of the Constitution	Present in Part III of the Indian Constitution.	Present in Part IVA of the Indian Constitution.
Total number	There are 6 rights that have been made available to Indian citizens as fundamental rights.	There are a total of 11 fundamental duties that should be abided by the citizens of this nation.
Borrowed from	The concept of fundamental rights is borrowed from the United States of America.	The concept of fundamental duties is borrowed from the USSR.
Availability	Is available to citizens only, while some of them are available to foreigners too.	Available to and binding upon citizens only.
Nature	Political and social in nature.	Political, social, and economic in nature.
Justiciability	Justiciable	Non-Justiciable
Articles	Articles 12 to 35 deal with fundamental rights.	Article 51A deals with fundamental duties.
Enforceability	They are directly enforceable.	There is no provision for direct enforcement by the courts. Parliament can enforce them through suitable legislation.
Legal outercourse	One can approach the Supreme Court or the High Court for the violation of their fundamental rights under Article 32 or 226 by praying for the issuance of an appropriate writ.	There would be no legal action taken for the enforcement of such duties, as they are not enforceable.
Amenability	They can be amended, but are subject to the condition of not amending the basic structure.	They can be amended easily.

Conclusion

Both fundamental rights and fundamental duties are important as they complement each other. There can be no demand for rights if the duties bestowed upon the citizens are neglected. Even though only fundamental rights are enforceable and justiciable in nature, fundamental duties are equally important. By performing moral obligations, we make efforts to create a better society, as was envisioned by the makers of the Indian Constitution. These duties were not made justiciable because not everyone would grasp this concept and understand what these terms mean. India’s majority population being uneducated played a huge role in this decision. But people like us, who are capable of understanding them, should follow and promote these ideas for the betterment of this country.

Frequently Asked Questions (FAQs)

What are the sources of fundamental rights and fundamental duties?

The concept of fundamental rights is taken from the United States of America, whereas the concept of fundamental duties is taken from the Soviet Union (USSR).

What is the nature of fundamental rights and fundamental duties?

The fundamental rights are justiciable in nature, whereas the fundamental duties are non-justiciable in nature. The fundamental rights are enforceable in the court of law, while the fundamental duties are not enforceable in the court of law.

Are fundamental rights absolute or qualified?

Fundamental rights are qualified but not absolute. This is because the state has the power to impose reasonable restrictions on these rights. For example, freedom of speech and expression under Article 19(1) is not absolute. The state can hold a person liable if their speech damages the reputation of another.

What is the difference between fundamental rights and duties?

Fundamental rights are basic human rights given to citizens of a country. They are justiciable in nature. Fundamental duties are the moral obligations of the citizens towards the country. These duties are not justiciable in nature.

What is the relationship between fundamental rights and fundamental duties?

The relationship between fundamental rights and duties is that for every right, there is a corresponding duty. One’s right is another person’s duty. If people don’t perform their duties, the rights of others will be affected.

References

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Importance of retirement planning : strategies for long-term financial security

By

Vanshika Kapoor

-

July 3, 2024

0

This article has been written by Sunil Kumar Pathak pursuing an Executive Certificate Course in Corporate Governance for Directors and CXOs from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Introduction

Retirement planning is for a period when one prepares for life after paid work career ends. Retirement planning is a strategy of evaluating and building a future fund corpus over a period of time, encompassing future goals, and taking all actions and decisions that are imperative to the achievement of that goal. Retirement planning is also about maintaining, safeguarding dreams and aspirations nurtured throughout the life cycle.

These days, younger people are planning retirement very early in their careers, so they should have a good corpus of financial stability after their retirement from service. The benefit of retirement planning is that it guards against any future challenges and provides a comfortable lifestyle.

Why retirement planning

In Indian society, family ties are interconnected, but societal safety coverage for a retired person is limited due to the changing dynamics of societal norms. In our traditional family system, children cared for their parents, but with changes in family ties, structure, and urbanisation, the dynamics have metamorphosed.

In this scenario, retirement planning becomes imperative because earning avenues for a person are constrained due to their advanced age. Most employees in corporate and government jobs retire in their 60s. So, here, the earning potential dries up at this stage of life. Then finding a solution for a dignified life becomes essential. Then, retirement planning works as a panacea for an independent and dignified financial life.

Imagine Sri Parasnath, a government school teacher who dedicated his life to teaching and is now retired from service at age 60. Now his pension will not be sufficient to cover the cost of his financial independence and dignified living.

Significance of retirement planning

There is no perfect time to start with retirement planning. We should keep in mind that every individual journey is unique, so risk tolerance and financial goals should be customised accordingly. This mapping of target retirement income and future cash flows helps ensure the secure future of an individual after retirement. Retirement planning envisages evaluating expenses, estimating sources of income, developing a savings strategy, and controlling risk and assets.

Imagine the case of Sri Ramesh, a corporate employee who began investing in a systematic investment plan (SIP) in a mutual fund. After his retirement, he found a good corpus in his kitty due to his disciplined approach.

Retirement is a significant chapter in an individual’s life, as it marks the culmination of hard work during life. The journey towards retirement requires meticulous planning and perspicacity. Dr. Teresa Ghilarducci, an esteemed scholar in retirement security, emphasises, “Retirement planning is not an option; it’s a necessity.” This perception stresses a visionary approach towards safeguarding one’s financial stability in the golden years of life. Retirement planning is an integral part of a sound financial plan at an early age. When you are preparing for your future retirement, there is always a sufficient corpus of funds to tackle any unprecedented challenges and lead a comfortable life.

Typically, retirement planning includes three phases:

Investment
Accumulation, and
Withdrawal.

The first phase should start at the age of 30-50 when you can afford to save or invest a fair amount.

In the modern world, prioritising retirement planning has become imperative due to volatile market conditions, rising costs of living, and the and the lack of a pension system in certain jobs. As Dr. Alicia H. Munnell, a renowned economist, observes, the traditional pillars of retirement security are crumbling. “Due to the rise in the ageing population and the lack of social security measures, retirement planning boosts income in old age. Although pensions and employee provident funds do exist, they may not be sufficient to cover all individuals and their expenses.

Financial independence

Retirement planning enables individuals to achieve financial independence and self-sufficiency during retirement. It allows them to maintain their desired lifestyle without relying on external sources of income, such as employment or government assistance. By saving and investing consistently throughout their working years, individuals can accumulate a nest egg that will provide them with a steady stream of income during retirement. This financial independence gives retirees the freedom and flexibility to enjoy their leisure time, pursue their passions, and live life on their own terms.

Inflation protection

Retirement planning helps protect individuals from the impact of inflation. Inflation is the gradual increase in prices over time, which erodes the purchasing power of money. By investing in assets that appreciate over time, such as stocks and real estate, retirees can preserve the value of their savings and ensure their purchasing power remains strong in the future. This is particularly important given that retirement can span several decades, and inflation can significantly reduce the value of a fixed income stream.

Healthcare expenses

Healthcare costs tend to increase with age, and retirement planning allows individuals to set aside funds specifically for medical expenses during retirement. This ensures they have access to quality healthcare services without straining their budget. Healthcare expenses can be unpredictable and substantial, and having a dedicated fund for these costs can provide peace of mind and prevent retirees from having to compromise on their medical care.

Unexpected expenses

Retirement planning helps individuals prepare for unexpected expenses that may arise, such as major home repairs or emergencies. Having a financial cushion can prevent these expenses from derailing their retirement plans. Unexpected expenses can be financially devastating, especially for retirees on a fixed income. Retirement planning allows individuals to set aside funds for these contingencies, ensuring they can handle unexpected expenses without having to dip into their savings or rely on debt.

Rationale for having a retirement plan

Lack of a social retirement benefit

India has not built a robust social security plan encompassing retirement benefits for its senior citizens. Though there are pensions and employee provident funds, they may not be sufficient to cover all expenses. Apart from corporate employees, they are bereft of above mentioned schemes to make them live a dignified life. This is why creating a diversified retirement fund with a mix of investment strategies is important.

Financial independence

A joint family system provided care for the older generation, but due to the shifting dynamics of modern day lifestyles, this has become a thing of the past. Retirement planning provides not only financial independence but a dignified way of living. Since generations, older Indians have depended on their children for retirement support.

Rising costs

Retirement planning accounts for rising costs and inflation. A consideration of inflation is taken into account, which is a vital element to consider when planning your retirement. A rising cost of living may impede your standard of living. If you are unable to keep up with rising costs, you may have to compromise on your standard of living.

Medical emergencies

Healthcare costs are very critical and pivotal in understanding the importance and dynamics of retirement planning. Health care can erode entire savings Due to inflation, retail expenses continue to rise steadily, and healthcare inflation is growing at an alarming rate. During even normal medical care, the costs of medicines and doctor fees put ample pressure on funds. Though some other financial goals may be compromised, health cannot be compromised.

What should be the medical inflation one should keep for post-retirement planning:

Medical and healthcare costs form a critical element of post-retirement living expenses. Medical expenses, which entail almost 12%-15% of expenses after retirement, could be for normal healthcare. Inflation in healthcare in India is approximately 14%. Therefore, having a specific fund for medical expenses that is invested sensibly to keep up with inflation is crucial when making retirement plans. Ideally, one should set aside a set amount of money each month for a considerable amount of time and begin saving early.

Strategies for long-term financial security

Harness the power of compounding by starting early

According to financial expert Warren Buffet, starting early for retirement planning is the key. Investments increase exponentially over time due to compound interest, resulting in large returns and protecting the investor from market turmoil.

Clear goals and a budget

To be in an effective retirement, one envisages setting up a clear goal by aligning retirement lifestyles and financial strategies accordingly. To start with, one needs to build a detailed budget that accounts for savings, expenses, and investment contributions for long term financial security coverage.

Portfolio diversification:

Harry Markowitz pioneered modern portfolio theory and advocated diversification as a key to minimising investment risk. By spreading investment in different baskets such as stocks, ETFs, bonds, real estate, mutual funds, and gold, one can leverage the risk exposure of volatile market conditions. One also needs to periodically rebalance their portfolio in alignment with financial goals and risk tolerance.

Embracing best of your tax advantages

By embracing proper tax planning, a good corpus can be harnessed in the long term. Dr. Richard Thaler, a leading economist, underscores the importance of exploiting tax-efficient vehicles to maximise savings and optimise retirement outcomes.

The tax avenues:

Public Provident Fund (PPF): A long-term savings scheme that offers tax benefits and interest rates. Contributions are tax-deductible under Section 80C, and the interest earned is tax-free. A long-term savings scheme with a tax-free interest rate.
Employee Provident Fund (EPF): A government-backed savings scheme that offers benefits to employees and employers.
National Pension System (NPS): is a traditional option that offers tax benefits and stable returns.
Equity-linked savings schemes (ELSS): Provide higher returns over the long term, but with higher risk.
Tax-saving fixed deposits and recurring deposits: a tax-saving investment option.
Tax-free bonds: a tax-saving investment option.
Pradhan Mantri Vaya Vandana Yojana: A tax-saving investment option.
Sukanya Samriddhi Yojana (SSY): A government-backed scheme that saves taxes while yielding returns.
Senior Citizen Savings Scheme (SCSS): A government-backed scheme that saves taxes while yielding returns.
National Savings Certificate (NSC): A government-backed scheme that saves taxes while yielding returns.

One should explore these retirement savings plans and choose the ones that align with their financial goals and risk tolerance.

Knowledge is power

As Benjamin Franklin famously said, “An investment in knowledge pays the best interest.” One should try to broaden their knowledge to stay afloat in the financial market. This helps in keeping abreast of investment strategies, regulatory changes, and retirement trends. One should always seek advice from good investment advisors.

Peace of mind

When you see a good corpus of funds taking care of your retirement needs, its fulfilment is a good achievement. Then peace of mind is invaluable. The stress of managing money to meet your long-term and short-term expenses can be dreadful. Paucity of money may even cause health-related issues such as hypertension and other unfortunate illnesses. It is more important to shield yourself from such problems at an older age.

Investment allocation

Effective retirement planning encompasses more than simply accumulating assets. It requires strategic allocation of investments to optimise potential returns while mitigating risk. A well-diversified retirement portfolio should incorporate a mix of stocks, bonds, and other investments to enable individuals to navigate market fluctuations and achieve their long-term financial goals.

Stocks:

Stocks represent ownership in companies and offer the potential for substantial growth over the long term. However, they also carry higher risk due to market volatility.
Within stock allocation, diversification is crucial. Investors should consider including a mix of large-cap, mid-cap, and small-cap stocks to spread risk and capture growth opportunities across different market segments.
Sectors and industries also play a role in stock selection. Investors should aim for a balanced mix of sectors and industries to reduce exposure to specific economic downturns.

Bonds:

Bonds provide stability and income in a retirement portfolio. They are less volatile than stocks and offer regular interest payments.
Government bonds, such as Treasury bonds, carry lower risk but also lower potential returns. Corporate bonds, on the other hand, offer higher yield but come with greater credit risk.
Bond duration is another important consideration. Longer-duration bonds are more sensitive to interest rate changes but provide higher potential returns. Shorter-duration bonds offer lower risk but may have lower returns.

Other investments:

Alternative investments, such as real estate, commodities, and hedge funds, can provide diversification benefits and potentially enhance returns. However, these investments often carry higher risk and require knowledge.
Real estate investment trusts (REITs) offer exposure to real estate without the need for direct property ownership.
Commodities, such as gold and oil, can serve as inflation hedges and provide diversification.
Hedge funds employ complex strategies and aim to generate absolute returns regardless of market direction.

Estate planning

Estate planning is an essential component of retirement planning that ensures your assets are distributed according to your wishes after your passing and that your beneficiaries are financially secure. Here’s how estate planning fits into retirement planning:

Asset distribution:
Estate planning allows you to specify how your assets, such as property, investments, and personal belongings, will be distributed after your death. This includes designating beneficiaries and ensuring that your assets are transferred to them smoothly and efficiently.
Beneficiary designation:
Through estate planning, you can name beneficiaries who will receive your assets upon your death. This designation is essential to ensuring that your wishes are respected and that your assets are not distributed according to state laws. You can also designate alternate beneficiaries in case your primary beneficiaries are unable or unwilling to receive your assets.
Tax minimisation:
Estate planning can help minimise taxes on your assets after your death. By utilising strategies such as trusts, charitable giving, and life insurance, you can reduce the estate tax burden and maximise the value of your assets for your beneficiaries.
Legacy planning:
Estate planning allows you to leave a lasting legacy and have an impact on future generations. You can establish trusts to provide financial support for your children’s education, grandchildren’s futures, or charitable causes that are close to your heart.
Guardianship and minors:
If you have minor children, estate planning allows you to designate a guardian who will assume responsibility for their care and upbringing in the event of your death. This ensures that your children are well-protected and their needs are met.
Healthcare directives:
Estate planning documents can include healthcare directives such as living wills and durable powers of attorney for healthcare. These directives allow you to make decisions about your medical care in advance and appoint someone to make decisions on your behalf if you are unable to do so.
Avoiding probate:
Probate is the legal process of distributing a deceased person’s assets. By creating a trust or utilising other estate planning strategies, you can avoid probate, which can be time-consuming, costly, and public.

By incorporating these strategies into their retirement planning, individuals can enhance their chances of achieving long-term financial security and enjoying a comfortable and fulfilling retirement.

Conclusion

The process of retirement planning requires active participation, thoughtful consideration, and continuous assessment. As Dr. Ghilarducci aptly states, “Retirement security is not a destination; it’s a lifelong pursuit. People can go towards a financially secure and satisfying retirement by following good financial rules, utilising the knowledge of distinguished academics, and remaining flexible in the face of unpredictability. Planning carefully and being resilient will help you stay on the path to long-term financial security. Maya Angelou: “We may encounter many defeats, but we must not be defeated.” With diligent planning and resilience, the path to long-term financial security remains within reach.

References

Independent director : the key to corporate governance success

By

Vanshika Kapoor

-

July 3, 2024

0

This article has been written by Santosh Kuradi pursuing an Executive Certificate Course in Corporate Governance for Directors and CXOs from Skill Arbitrage.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

The success of a company depends upon the leaders it possesses, and companies have an abundance of it. However, to make it foolproof, the government of India has made it compulsory to have one-third of a company’s board of directors be independent directors. An independent director should hold unbiased views, be fair and knowledgeable, and act as a watchdog to uphold the interests of its shareholders. Having an experienced, knowledgeable and competent independent director with these qualities is the key to success for corporate governance. For the success of the company, it’s equally important to know other parameters as well.

Role of the board of directors in overseeing a Company’s operation and strategic direction

Good governance in any place is always a key to success, whether in the corporate world, an organisation, or any form of government. And to have good governance, you need to have a team of leaders with enough knowledge, experience, intelligence, and leadership skills to be capable of handling any situation at any given time. They should be willing to work towards a common goal, make decisions impartially, and build and manage the team while upholding the interests of the organisation and the people working for it.

The board members and the directors are the key forces in the corporate world. They are the ones holding the strings of the chariot, and driving in the right direction leads to success. A small decision taken in the boardroom can affect the entire organisation, and every decision taken in the boardroom should be taken with due care and diligence. All decisions taken in board rooms should be thoroughly analysed.

Of course, it was and always is being done in the same way in every organisation. However, there are still chances of making errors in doing so for many reasons, such as:-

The company wants to gain more profit in a short period of time.
Mismanagement of the organisation or poor governance.
Pilfear in the company.
Corruption.
Taking uncalculated risks.
Failure of prediction.
No proper checks and balances.
Delay in taking decisions.
Unhappy employees.
Not be able to build trust in shareholders.
Ignoring the government’s policies.
Non-cooperation between the board of directors and the team.
Yes man, team on board of directors.
Using funds for other purposes than what they are meant for.
Not adhering to the new technology or upgrading.

Under this situation, there is always room for scams and frauds, and there are many such incidents. Some of the measures against scams and frauds in India and abroad can not be ignored.

Scams in India

The Satyam Computer Services scandal, which unfolded in 2009, was a monumental corporate fraud that shocked the business world. It involved the systematic manipulation of financial records and misrepresentation of company assets by the company’s top executives, led by its founder and chairman, B. Ramalinga Raju.

The scandal came to light when Raju confessed in a letter to the company’s board that the company’s accounts had been falsified over several years. He admitted to inflating profits, overstating revenues, and creating fictitious assets. The revelations sent shockwaves through the Indian corporate landscape and led to a sharp decline in the company’s share price.

Investigations revealed a complex web of deceit and financial irregularities. It was discovered that Raju and his associates had created fake invoices and inflated project values to artificially boost the company’s financial statements. They also engaged in insider trading, using their knowledge of the company’s true financial position to make personal profits.

The scandal not only damaged Satyam’s reputation but also eroded investor confidence in the Indian stock market. It raised serious questions about corporate governance and accountability in India. The Indian government and regulatory authorities launched investigations into the matter, and several criminal charges were filed against Raju and other top executives.

The Satyam scandal served as a wake-up call for businesses and regulators alike. It highlighted the importance of strong internal controls, transparent financial reporting, and ethical leadership. The scandal also led to reforms in the Indian corporate governance framework, including stricter regulations on financial reporting and increased oversight of audit committees.

The Satyam Computer Services scandal stands as a cautionary tale about the dangers of unethical business practices and the importance of maintaining integrity and transparency in corporate operations.

Nirav Modi and Mehul Choksy Scam: The diamond merchants were involved with PNB Bank in attaining a fraudulent letter of understanding to attain collateral free amount.

On November 9, 1992, the Central Bureau of Investigation (CBI), India’s premier investigating agency, swooped down on the offices and residences of Bombay-based stockbroker Harshad Mehta and his two brothers, Ashwin and Hitesh. The CBI alleged that the Mehta brothers, along with several associates, had been involved in a massive stock market fraud.

The CBI’s investigation revealed that the Mehtas had allegedly misappropriated more than 2.8 million shares of about 90 companies through forged share transfer forms. These shares were worth approximately Rs. 1,300 crores (about US$ 325 million) at the time. The Mehtas allegedly used these shares as collateral to obtain loans from banks and financial institutions.

The CBI also alleged that the Mehtas had manipulated the prices of shares through collusive trading and other illegal means. This resulted in artificial inflation in the stock market, leading to massive losses for investors when the bubble burst in 1992.

The Mehta brothers were arrested and charged with various offenses, including criminal conspiracy, cheating, forgery, and violation of the Securities and Exchange Board of India (SEBI) regulations. The trial in the case lasted for several years, and the Mehtas were eventually convicted and sentenced to prison.

The Harshad Mehta scam, as it came to be known, was one of the biggest financial scandals in India’s history. It shook the confidence of investors in the Indian stock market and led to the introduction of stricter regulations to prevent such frauds in the future.

KLA was another corporate fraud that was the first of its kind in the airline industry, which ultimately led to the fall of the empire of the King of Good Times. The airline was launched by flamboyant Vijay Mallya, well known as the King of Good Times. Over a short period of time, KLA established a reputation as the finest private airline in the country, with high quality service standards and was enjoying second highest market share after Jet Airways.

The Sahara India scam, one of the biggest financial scandals in Indian history, involved two Sahara group companies: Sahara India Real Estate Corporation Ltd. (SIRECL) and Sahara Housing Investment Corporation Ltd. (SHICL). These companies lured millions of investors, primarily from rural and semi-urban areas, into investing in their Optionally Fully Convertible Debentures (OFCDs), promising high returns and guaranteed buybacks.

However, the companies operated in a fraudulent manner, flouting regulatory norms and failing to comply with the guidelines set by the Securities and Exchange Board of India (SEBI). They raised funds from investors without registering their OFCD schemes with SEBI, effectively bypassing the regulatory oversight that is essential for protecting investors’ interests.

The Sahara group companies used aggressive marketing tactics and employed a network of agents and brokers to solicit investments from unsuspecting individuals. They made false and misleading claims about the safety and profitability of their OFCDs, exploiting the financial aspirations of people who were often unaware of the risks involved.

The scam came to light when investors began facing difficulties in redeeming their OFCDs and receiving promised returns. As the magnitude of the fraud became apparent, SEBI launched an investigation and ordered the Sahara group companies to refund investors’ money. However, the companies failed to comply with SEBI’s directives, leading to legal proceedings and a prolonged battle between the regulator and the Sahara group.

The Sahara India scam not only caused financial losses to millions of investors but also eroded trust in the financial system. It highlighted the need for stricter regulations and enforcement measures to prevent such fraudulent practices in the future. The case serves as a cautionary tale, underscoring the importance of investor education, due diligence, and regulatory vigilance in safeguarding the interests of investors.

The Infrastructure Leasing & Financial Services (IL&FS) financial scandal sent shockwaves through India’s financial sector. IL&FS, a major infrastructure development and finance company, was found to have concealed its financial stress and defaulted on various debt obligations, amounting to over $12 billion.

Scams abroad

One of the most notorious cases of corporate fraud is the Enron scandal. At its height, Enron, a major energy company, was raking in billions upon billions in profits. However, when the company began to face declining revenues and debt troubles, company executives hid the facts through massive accounting fraud.

All frauds are similar in nature, including manipulation in financial transactions and utilisation of funds in inappropriate ways.

There might have been some frauds and scams that were never reported and kept unexposed to the normal public, kept secret or else the intricacies never been solved.

This is where the government of India laid the policy to have an outsider as an independent director who speaks his mind, has professional scepticism, and has the skills to identify a red flag and question any abnormal financial parameter. An independent director must have technical knowledge, including a deep understanding of the financial statements, economy and industries in which the company operates. Having such independent directors will definitely lead the company to success.

Government rules for appointment of independent director

The appointment of independent directors in India is governed by Section 149 of the Companies Act 2013, along with Rules and Regulations. Here’s a breakdown of which companies must or can appoint independent directors:

Public listed companies (mandatory)

All publicly listed companies must have at least one-third of the total number of directors as independent directors. It is a mandatory requirement to ensure that publicly listed companies have a significant presence of independent directors to enhance corporate governance.

Other classes of public companies (prescribed by the federal government)

The Union government has the authority to prescribe the minimum number of independent directors for other classes or classes of public companies and the government can extend the requirement of appointing independent directors to specific categories of public companies beyond the mandatory provision for listed companies.

Public companies with certain criteria (mandatory)

Criteria: Public companies meeting the following criteria must have at least two independent directors:

Paid-up share capital of INR 100 million or more.
Turnover of INR 1 billion or more.
Aggregate outstanding loans, debentures, borrowings, and deposits exceeding INR 500 million.

Exceptions: However, there are exceptions to these criteria, including:

Joint ventures
Wholly-owned subsidiaries
Dormant companies, as defined under the Act

Qualification of the independent director

The independent director should not be an employee of the company or hold any position in the company.
The Independent Director should not be holding shares or any business in the company.
No relatives of independent directors should be directors or in any key managerial post.
The independent director should have sufficient knowledge of the company and be able to understand the balance sheet and red flags where required.

Role of independent director

The role of an independent director is to actively participate in board meetings, give valuable suggestions for the betterment and progress of the company, work as a watchdog, understand the situation of the company, check on all financial transactions, keep track of all the progress ongoing in the company, and give timely remarks if any. Be impartial in your dealings, and always uphold the interests of the shareholder, company and government.

The Independent Director is required to keep himself updated with recent technologies, government regulations, economic conditions, and the competitors’ strategies from time to time so that he can contribute to the well-being of the company and uphold the interests of the shareholders.

The director is required to be available to attend the board room meeting whenever the requirement arrives.

The independent directors are independent of their views and can bring any wrongdoings immediately to the attention of the public. With their experience, they can give valuable suggestions and bring considerable progress to the company.

They should be fair in dealings and always uphold the prestige of the company by helping them to abide by all the rules and regulations. They should protect the legitimate interests of the company, shareholders, and employees while acting within their authority.

Independent directors should maintain confidentiality and ensure the company has a functional vigil mechanism to address concerns.

Challenges and concerns related to independent directors

The challenges and concerns of an independent director are not limited, just as the objectives of the company are not limited. An independent director may be experienced and have sufficient knowledge in his own field. When it comes to acting as an independent director, one needs to acquire and learn about the prospects of the company, use their expertise, and give valuable input.

The independent directors are required to get updated from time to time so that they act as watchdogs to hold the interest of shareholders.

Independent directors need to be innovative, logical and pragmatic in their approach.

Though they are not responsible for the progress of the company, they are members of it, and the success of the body depends upon the functioning of its members. Hence, the success of the company depends on the directors they have.

Conclusion

The Indian market is expected to grow rapidly due to factors like an increased educated population, the availability of the internet, demand for technological support from other countries, the availability of vast land features, the opportunity to provide manufacturing services to the country and the rest of the world, motivation for a young entrepreneur to establish new startup and government policies to support these ventures. There is a room for an exponential increase in the number of well established companies in the country.

The measure hurdle or obstruction for the progress of India is always the eruption of unprecedented scams and frauds in India taking place, and again, the hard earned money of the public is wasted, and the same is seen in the form of subdevelopment in India. If the so-far reported scams had been avoided well in time, then the progress of India would have been far more than what we are experiencing today.

With the increase in the number of companies functioning, the need for the functioning of these companies in a well organized manner is the main crucial requirement for the economic growth of India. No government organisation can get involved in each and every company’s dealings and have checks and balances at each and every stage.

Having an independent director in the prescribed manner as laid out by the government of India is definitely going to be a great success for the well-being of the company and its shareholders. Not only shareholders and the company, but the economy of India will also bloom well since India is moving towards a developed country and is expected to be the third largest economy in the world. With a well trained faculty preparing independent directors in India, the world can always have access to the support of these trained independent directors for their companies as well.

In essence, the role of independent directors transcends the confines of regulatory compliance. They are the architects of ethical leadership, the stewards of effective governance, and the mentors shaping the future leaders of the organisation. As India’s corporate landscape evolves, recognising and harnessing the full potential of independent directors becomes not just a regulatory requirement but a strategic imperative for sustained success.

References

Impact of AI on data and privacy protection laws

By

Vanshika Kapoor

-

July 3, 2024

0

This article has been written by Sheetal Rangwar pursuing a Diploma in International Contract Negotiation, Drafting and Enforcement from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Table of Contents

Introduction

In the coming generations, artificial intelligence will surround the world, which will empower humans to get addicted to the virtual reality of artificial intelligence. However, the constant innovations and advances in AI technology have raised great concern regarding privacy data. The further mechanism structure of AI relies on a large amount of personal data to analyse and make predictions.

Generally, it raises concerns regarding AI breaching the data privacy of individuals and business enterprises. Thus, artificial intelligence is evolving in a fast-paced environment as AI modules work to access personal data information, and the consequence is a threat of severe data breaches.

AI technology focuses on virtual assistants, such as Siri and Alexa, by recognising facial expressions and promoting driverless vehicles; AI functions by processing massive amounts of data to strengthen their algorithm and improve performance, providing accurate results.

The more data they have access to, the better they learn and adapt to new situations. This data mainly comprises personal information such as a person’s name, address, phone number, and social security number.

With the vast amount of data available today, the use of AI raises concerns regarding the protection of personal information. Millions of pieces of data are collected and processed every day, and there is a high possibility the data may fall into the wrong hands of hackers. Mischievous hackers accessing the data unlawfully and illegally can cause distress to a person.

AI has changed human lives to some extent, such as by using AI for surveillance and monitoring. By using facial technology methods, law enforcement agencies can detect suspects and identify people in public places. But it also raises the question of the right to privacy.

AI technologies should be designed and addressed in significant space. For instance, AI tech companies working with AI should comply with GDPR (Global Data Protection Regulation), which aids in reducing biases and mitigating the risk of monitoring suspects.

Concerns about AI and data protection laws

Artificial intelligence (AI) has brought about transformative changes in various aspects of our lives, from how we interact with technology to how businesses operate. However, as AI becomes more sophisticated and pervasive, it also raises significant concerns about privacy and data protection laws.

Increased data collection and processing: AI algorithms rely on vast amounts of data for training and decision-making, leading to increased data collection and processing by organisations. This poses several privacy risks, including:
- Unlawful or unethical data collection: Organisations may collect data without proper consent or transparency, violating individuals’ privacy rights.
- Data profiling and behavioural targeting: AI can be used to create detailed profiles of individuals based on their online behaviour, which can be used for targeted marketing or surveillance.
- Algorithmic discrimination: AI algorithms may perpetuate and amplify biases, leading to discriminatory outcomes in areas such as employment, credit scoring, and healthcare.
Automated decision-making and profiling: AI-driven systems often make decisions without human intervention, such as determining loan approvals, job applications, or insurance coverage. This raises concerns about the lack of transparency and accountability in decision-making processes:
- Lack of explainability: AI algorithms can be complex and opaque, making it challenging to understand how decisions are made and the factors considered.
- Bias and discrimination: Automated decision-making systems may inadvertently incorporate biases or errors, leading to unfair or discriminatory outcomes.
- Right to explanation: Individuals may have the right to request an explanation of AI-driven decisions that affect their lives, but this right may not always be effectively implemented.
Governmental use of AI for surveillance and law enforcement: Governments have increasingly adopted AI technologies for surveillance and law enforcement, which can pose significant privacy risks:
- Mass surveillance: AI-powered surveillance systems can collect and analyse vast amounts of data from public spaces, raising concerns about the erosion of privacy and freedom of movement.
- Facial recognition technology: Facial recognition technology has been used for law enforcement and identification purposes, but it raises concerns about potential misuse, false identification, and lack of consent.
- Predictive policing: AI algorithms are used to predict crime and identify potential criminals, but this raises ethical concerns about profiling and the potential for discrimination.
Data security and privacy breaches: AI systems themselves can become targets of cyberattacks, leading to data breaches and unauthorised access to sensitive information. Additionally, AI technologies can be used to enhance cyberattacks, making them more sophisticated and targeted.
Legal frameworks and regulations: The rapid development of AI has outpaced the existing legal frameworks and regulations designed to protect privacy and data. This has led to a patchwork of laws and policies across jurisdictions, creating uncertainty and challenges for organisations and individuals.

Things google did for privacy regulation

The usage of public data sets in training models

AI is mainly trained on vast amounts of public personal data. This data includes name, phone number, and address. As AI functions as a sophisticated network, existing laws evolve and update themselves for new circumstances. In the realm of legal privacy, the term is generally associated with the collection, processing, and accessing of data. The focus is on determining when data can be classified as personal and, therefore, protected versus when it can be used by the public. This distinction is critical in safeguarding sensitive information and ensuring that an individual’s privacy rights are respected.

Privacy regulation with new AI

Government agencies globally are focusing on how to implement new privacy laws to comply with existing ones. It is vital to consider how these new laws interact with the latest AI policy initiatives, including overlaps with existing laws. The recent White House order on the development and use of AI has included rules related to safety, security, innovation, and equity, along with several rules related to privacy and the interaction of AI and privacy law.

Children’s privacy regulation

Children’s Online Privacy Protection Act (COPPA) pertains to the collection and use of data from children under 13 years of age in the United States. The Federal Trade Commission is responsible for establishing policies and regulations that govern this area. They ensure that AI products and developers should significantly consider the creation of data from children and how their AI system interacts with them.

Make privacy a core element of the basic structure of the company

Privacy should be adhered to with all regulatory compliance and investment in technology, which enables frequent and efficient privacy practices.

Simplify compliance

The company should mandate the employees to ensure privacy compliance as a measure of responsibility.

GDPR (General Data Protection Regulation)

The GDPR is the most widely adopted law regarding security and privacy. It was passed by the European Union and is applicable to anyone who collects and processes the personal data of individuals living in the EU or outside the union. The GDPR aims to give consumers control over personal data. It applies regardless of where the website is located. Consumers have the right to know how their data is being used by companies.

Highlights of GDPR

General purpose of GDPR- The law states the collection & guidelines for assessing the personal information of individuals. Consumers are allowed to know how the data is being used by companies. It applies to all, regardless of where the company is situated. The law states that companies cannot mislead consumers with vague and confusing language; thus, they must ensure
Notification- The data collection notification should be given to website visitors.
Lawfulness and transparency- The company should abide by the compliance rules led by GDPR and maintain transparency when they use personal data.
Purpose limitation- The collection of personal data must be for legitimate purposes and must be specified explicitly. The data shall not be used for incompatible purposes; however, the company may archive the data for further processing for public interest, scientific research, or statistical purposes.
Data minimisation- The company can collect and process personal data that is subject to relevancy, adequacy, and limitations useful for necessary purposes. The organisation should never collect unnecessary personal data.
Accuracy of data- The organisation has to update the data regularly or periodically. It is a mandate for organisations that personal data that is inaccurate and not amended should be erased immediately. All reasonable steps must be taken to correct the data promptly.
Storage limitation- The controller who holds the personal data shall remove the data that ceases to be necessary. As there is no specific limit mentioned, the controller can hold the data for a longer period or save the archive when the subject of interest is public or scientific research. The organisation lets the individuals be aware of the retention period or the particular method that is used for calculation.

Digital Personal Data Protection Act 2023

The act seeks to form new legislation based on the major Supreme Court judgement delivered in the case of Justice K.S. Puttaswamy (Retd) vs. Union of India which raised questions about the Aadhar Scheme’s authenticity in providing adequate safety to citizens subject to existing privacy laws.

The act was passed by both houses of parliament on August 11, 2023, and has received the president’s assent. However, the effective date of this act shall be notified by the official gazette publication.

Essential points of DPDP Act, 2023

It applies to all personal data, either digital or non-digital, that falls under the category of digital perception.
The overseas processing of data applies to Indian data subjects as well as the goods or services offered by Indian data controllers.
The data shall be processed lawfully under the rules of the DPDP Act.
Only significant data should be collected.
The DPDP applies to all types of personal data; there are no subsections of personal data.
The organisations shall provide the option of consent. It should be free, specific, unconditional, and unambiguous.
The data principal shall be provided with notice for every request when they are processing personal data. If the request is assisted appropriately, the individual can exercise the right to withdraw consent. Along with notice and consent, the data principal shall comply with other languages as per the Eighth Schedule of the Indian Constitution.
Data fiduciaries must compel compliance with the DPDP Act. For example, – Data fiduciaries can freely transfer data across borders unless the government restricts such transfers through notification.
The Constitution of the Data Protection Board of India, as an enforcement body, confers all powers to direct any urgent remedial or mitigation measures, issue receipt of a personal data breach, inquire about breaches, impose penalties, inspect any document, summon and ask any person for attendance. An appeal can be heard before the Telecom Disputes Settlement and Appellate Tribunal (‘TDSAT’) against any order of DPB. An appeal may be preferred before the Supreme Court of India against the TSAR.
The central government can ask for information from a data fiduciary or any intermediary and issue an order to block access by the public to any computer source of such information with regard to the public interest. The order shall be passed in writing once it is issued after being allowed to be heard.

Exemption under the DPDP ACT

subject to the sovereignty of India, that is, the public interest and maintenance of public order,
case proceedings, legal rights, claims, amalgamations, mergers, investigations, prosecutions, etc,
personal, domestic or journalistic purpose.

Offence and penalties- Under this act, the authority may levy heavy penalties on data fiduciaries for various offences

non-compliance and failure to perform its duties
violation of processing the data under this act
Failure to notify the board can attract a penalty of more than Rs 5 crore or 2% of the worldwide turnover of the fiduciary penalty.

Positive side of data protection laws in business and corporations.

Data transfer overseas- A data fiduciary can save a copy of all personal data that is stored within the country. This helps protect national interests from foreign attacks and prevents the transfer of crucial data overseas. However, it is the discretion of the board to frame what accounts for personal data and crucial data.
Trust tool- Banking, Financial Services, and Insurance (BFSI) and Fintech companies are increasing their technical and administrative procedures to ensure compliance. The BFSI and fintech companies have to abide by their existing applications, and their policies will be able to adapt quickly to changes in privacy laws. While having a strong privacy policy can build trust among customers, complying with regulations may come with additional costs that companies need to consider.
Forensics- The major system that is affected by electronic discovery is computer forensics. However, the act asks for prior consent for the processing of computer forensics investigation. In a situation where a mistaken employee or group of employees are charged with noncompliance, the company would be forced to seek proper counsel for such forensic analysis.
More demand for privacy skills- In the technology industry, the role of data protection officer will be of great importance and there will be a rapid increase in skilled professionals and specialists.
Data portability- The law provides the right of data portability to another data fiduciary without any reluctance.
Special glimpse for sensitive data- The sensitive personal data cannot be processed unless consent is drawn in written form from a person to a data fiduciary obtained through letter, email, or fax from a particular person. Sensitive personal data cannot be shared apart from specific purposes collected for welfare schemes and social protection laws.
Notification of breach- In case of any breach, the data controller must notify the particular person who is related to personal data, along with the authority to take measures against any harm caused by the breach, within 7 days.
Improving business- Once the act is enforced by notification, customers will be more reliant on business practices.
Reduction- It will reduce crime and corruption, bringing more transparency to the act.
Improving security- The right to privacy can provide businesses with greater security and help corporations cultivate better goodwill in the market.
Brand protection- While preparing for the worst, businesses can develop strategic steps to integrate IT security plans. Safeguarding customer privacy is a strategic opportunity for brand growth.

Negative side of data protection laws for businesses and corporations

Compliance- Compliance can be costly and time-consuming due to mandatory regulations, paperwork, and administrative tasks.
Effects on startups and companies- Data analytics are used by organisations to detect fraud. For example, details of small businesses/vendors against employees are used to identify conflicts of interest.
Effect on digital forensics- In a situation where an employee is being investigated for noncompliance, the organisation is forced to seek consent for such forensic analysis.
Technical and process change- The right to be forgotten and right to correction by online platforms must provide assistance and assessment of personal data for such requests by the customer.
Additional cost of employment -Organisations need to appoint data security officers to ensure compliance with rules and regulations.
Limitation- The data that is processed for these purposes should be clear, specific, and lawful.
Time-consuming- The organisation that asked for KYC Aadhar verification through the online portal again has to revamp to a physical process, which is less time-consuming. The organisations have to opt for the uniform process, which asks for fewer privacy details.
Impact on communication services- WhatsApp and Facebook services are private companies performing public functions, and the big tech giants are answerable for any violation of privacy practices.
Job portals- The data on job portals has professional qualifications, experience, personal data, and contact details that are not safeguarded under the IT Rules 2000 and run under the ambit of the website’s terms and conditions. Now, with the effect of this law, a change can be enforceable for such practices.
Matrimonial websites- The threats that exist on matrimonial sites can lead to major privacy violations; for instance, the sale of data to any other third party, theft, or illegal leakage of data can be addressed by data protection law.
Insurance sector- The insurance sector contains a huge amount of data, which is vital to maintaining integrity and trust in this sensitive field. However, the major concern for privacy rights is neglected.
Banking and M-wallets- The situation of banking and M-wallets is similar to that of the insurance sector. The concept of privacy laws for customers must not be overlooked. Data protection laws can enhance the regulations for maintaining customer privacy.

Cases on data protection

Justice K.S. Puttaswamy and Anr vs. Union of India (2018)

In this case, the Supreme Court discussed the validity of the Aadhaar Act, which was passed as a ‘Money Bill’, and its use of compulsory identification for state welfare schemes, though it is constitutionally valid. Also, Section 139 AA of the Act defines mandatory Aadhar and PAN card links; the court upheld this decision as valid.

Rochem Separation System Pvt. Ltd. v. Nirtech Pvt. Ltd. and Ors. (2022)

In this case, the Bombay High Court passed an ex parte injunction on the use of confidential data by an ex-employee of the company while working for the company. The ex-employee downloaded the client data, pricing data, and other personal data to his personal storage device and later moved out to the new company. He then contacted the previous company client using the data that he had downloaded. The ex-employee also solicited other colleagues to join a new company.

Aaradhya Bachchan & Anr vs. Bollywood Times and Ors. (2023)

In this case, Aradhya Bachchan seeks relief from the court for being presented wrongfully as a critically ill child. The Delhi High Court has issued severe critical directions and guidelines to step back for Non-Consensual Intimate Images (NCII) and personal data/ and information.

The court strictly stated that the intermediaries are obligated to adhere to and remove the NCII content after receiving the court order and ensuring the protection of the individual online.

AI-related privacy concerns : real-life example

In the era of artificial intelligence (AI), privacy concerns have become increasingly prevalent. One notable example is the invasive nature of big tech companies, which have access to vast amounts of personal data.

Recently, I encountered a personal experience that highlighted these concerns. I watched a show on Amazon Prime using my Apple TV. Two days later, while browsing a Google app on my iPhone, I received news recommendations related to that show. This incident is particularly concerning because I never watched the show on my iPhone, nor did I perform any related searches or activities using that device.

This situation raises several privacy issues.

Firstly, it demonstrates the interconnectedness of various platforms and technologies. Despite using different devices and services, my viewing activity on Amazon Prime was tracked and linked to my Google account, potentially without my explicit knowledge or consent.

Secondly, it suggests that big tech companies may be engaging in data sharing or tracking practices that are not transparent to users. The fact that I received news recommendations related to the show on a different platform and device indicates that my data might have been shared across these platforms without my awareness.

Thirdly, this incident highlights the potential for targeted advertising and personalised content based on our online activities. While personalised recommendations can be convenient and enhance the user experience, they also raise concerns about surveillance and the erosion of individual privacy.

Addressing these privacy concerns requires a multifaceted approach. Big tech companies must be held accountable for their data practices and ensure transparency and user consent. Implementing robust privacy regulations and enforcing compliance can help protect users’ personal information. Users should be educated about the privacy implications of using various technologies and services. Raising awareness about data tracking and sharing practices can empower individuals to make informed decisions about their online activities. Developing privacy-enhancing technologies and tools can provide users with greater control over their data. Encryption, anonymization, and opt-out options can help mitigate the risks associated with data collection and sharing.

Overall, the privacy concerns raised by invasive Big Tech practices in the age of AI necessitate a collaborative effort involving regulatory bodies, technology companies, and users. By embracing transparency, respecting user consent, and empowering individuals with knowledge and tools, we can work towards a more balanced and privacy-conscious digital landscape.

Conclusion

In conclusion, the landscape of data protection and privacy regulations, particularly in the realm of artificial intelligence (AI), is rapidly evolving. As AI technology continues to advance, concerns surrounding the collection, processing, and use of personal data are becoming more pronounced. The proliferation of AI-driven applications, from virtual assistants to facial recognition systems, underscores the critical need for robust privacy safeguards.

Regulatory frameworks like the General Data Protection Regulation (GDPR) in the European Union and the Digital Personal Data Protection Act (DPDP Act) in India represent significant steps towards empowering individuals with control over their personal information. These laws impose obligations on organisations to be transparent about data collection practices, obtain explicit consent, and ensure the accuracy and security of personal data.

While such regulations offer essential protections for consumers, they also present challenges for businesses and corporations. Compliance efforts can be resource-intensive, requiring investments in technology, personnel, and process changes. Startups and smaller companies may face disproportionate burdens, while established organisations must navigate complex regulatory landscapes.

However, amidst the challenges lie opportunities. Embracing privacy regulations can enhance trust between businesses and consumers, leading to improved brand reputation and customer loyalty. Moreover, adherence to stringent data protection standards fosters innovation by encouraging responsible data-driven practices and promoting cybersecurity measures.

Nevertheless, policymakers, businesses, and individuals must remain vigilant in addressing emerging privacy concerns and adapting to evolving technological landscapes. By striking a balance between innovation and privacy protection, we can harness the full potential of AI while safeguarding fundamental rights and values in the digital age.

iPleaders

Issues relating to challenging and enforcing domestic arbitration award : an overview

Introduction

Challenging the award

Issues related with challenging the award

Limited grounds under Section 34(2)(a)

Ambiguous and limited grounds for setting aside the arbitral award by the court

Limited duration of time for making the application

Expeditious disposal of the Application under Section 34

Enforcement of arbitral award

Issues related with enforcing the arbitral award

Filing of stay application in appropriate court

Court backlog

No clarity of judicial Intent

Conclusion

References

Doctrinal and non-doctrinal legal research

Introduction

Types of legal research

Doctrinal legal research

Definitions of doctrinal research given by jurists

Objectives of doctrinal legal research

Sources of doctrinal research

Characteristics of doctrinal legal research

Normative character of doctrinal legal research

Purpose of doctrinal research

Tools used for doctrinal research

Methodology of doctrinal legal research

Examples of doctrinal legal research

Merits of doctrinal legal research

Demerits of doctrinal legal research

Non-doctrinal legal research

Objectives of non-doctrinal legal research

Sources of non-doctrinal research

Characteristics of non-doctrinal legal research

Purpose of non-doctrinal research

Tools used for non-doctrinal research

Methodology of non-doctrinal legal research

Examples of doctrinal legal research

Merits of non-doctrinal legal research

Demerits of non-doctrinal legal research

Difference between doctrinal and non-doctrinal legal research

Conclusion

Frequently Asked Questions (FAQs)

What are the stages involved in legal research?

What are the objectives of legal research?

What is the significance of legal research?

References

Role of AI in autonomous spacecraft navigation systems

Introduction

Machine learning

Spacecraft navigation

Autonomous spacecraft navigation and AI

Computer vision in space

Path planning and control

AI’s crossover applications

Marine biology

Medical imaging

Ethical considerations

Conclusion

References

Committee of creditors- roles, responsibilities & functions

Introduction

Who is a creditor

Committee of creditors

Composition of COC

Roles and responsibility of COC

Decision making

Protection of interests

Information gathering

Resolution plan evaluation

Approval of transactions

Engagement of professionals

Operational management

Advocating for fair treatment of creditors

Ensuring compliance

Functions of COC

Meeting regularly

Consideration of resolution plans

Monitoring the assets