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Relevancy and Admissibility

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This article is written by Arya Mishra, a student of Banasthali Vidyapith, Jaipur. This article talks about the relevancy and admissibility in the Evidence Act.

As per Janab’s Key to Evidence, relevance alludes to the level of connection and probative incentive between a reality that is given in evidence and the issue to be proved. Admissibility includes the procedure whereby the court decides if the Law of Evidence allows that important proof to be gotten by the court. The articulations ‘relevancy’ and ‘admissibility’ are frequently taken to be synonymous. Be that as it may, they are not the equivalent. The first hurdle to presenting any piece of evidence to a court is showing that the evidence is relevant. Relevance is a threshold requirement that must be met before the court can consider the value the evidence may have. Evidence is relevant when it “has any tendency to make a fact more or less probable than it would be without the evidence” and “the fact is of consequence in determining the action.”

Definition of Relevancy and admissibility

Relevancy 

Relevant Evidence is evidence that makes a reality practically obligated to be legitimate than it would be without confirmation. Relevant proof might be rejected for unreasonable partiality, perplexity, or a waste of time. The relevant proof is commonly permissible and irrelevant proof is never acceptable. Two main fundamental standards on relevance:

  1. Nothing is to be received which is logically not verified regarding the matters which are required to be proved.
  2. Unless and until the clear ground of law or policies excludes it, everything which is verified or probative should come in. Relevancy act as a link between a statement of proof and a statement that needs to be proved.

One fact is said to apply to one another when one is associated with the other in any of the ways alluded to in the provisions of The Indian Evidence Act relating to the relevancy of fact. 

Indian Evidence Act does not give a particular meaning of relevancy or relevant fact. It essentially depicts when one fact become applicable to another one. 

Sec.5 to Sec.55 of Indian Evidence Act gives a few manners by which one fact might be associated with another fact and in this way the idea of relevant fact can be distributed. One fact is pertinent to another fact if they are associated with one another in any of the ways as portrayed in Section 5 to Section 55. In the event, if a fact isn’t so associated, then the fact is irrelevant.

A court may bar important proof when the probative estimation of the proof is significantly exceeded by the peril of at least one of the accompanying: out of line bias; confounding the issues; misdirecting the jury; undue postponement; unnecessarily exhibiting aggregate proof.

Admissibility

All the relevant facts which are admissible by the court are called admissibility.

As per the Section 136 of the Evidence Act, the final discretion of the admissibility of evidence of the case lies with the judge. Section 136 of the Evidence Act states that exactly when either assembling proposes to give proof of any reality or actuality, the Lord justice may ask the social event proposing to give the proof how the alleged truth, at whatever point illustrated, would be huge; and the judge will surrender the verification if he envisions that the truth, at whatever point appeared, would be relevant, and not something different.

Essential ingredients of Admissibility

  1. The judge is the only person who determines relevancy and admissibility. 

  2. When an individual proposes to show proof of any fact, the judge may ask an individual to explain ‘in what way’ the fact is relevant. 

  3. The judge would concede the particular demonstrated reality just if he is content with the suitable reaction of the individual that it is, to be sure, significant under either provision of S. 6 to 55. Hence the thought of relevancy begins first and of admissibility later and the judge will concede the reality only if it is relevant.

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What is Relevant Evidence?

All reality is relevant which is equipped for bearing any reasonable assumption as to facts in issue or principal matter in dispute. Sir “Stephen,” said that relevancy means a connection of event as cause and effect. By and large, the realities significant to an issue are those actualities that are important for evidence or disproof of reality in the issue. Such realities might be given in proof legitimately or inferentially. 

What is truly implied by ‘relevancy of fact’ is a fact that has a specific level of probative power. They are not certainties in issue but rather may influence the probability of reality in the issue. 

Relevant evidence is auxiliary or collateral in nature, yet appropriate or likely in offering ascend to a derivation of right or risk by a procedure of thinking.

A fact will be relevant only when it has a link with the facts in issue, but it is not admissible. For example- communication between spouses during the marriage or any professional communication or communication which is made regarding the affairs of the state these all are not admissible but they are relevant. A particular fact is reasonably connected to the main issue it can be easily ascertained by logic and not by law. Therefore logical relevancy signifies a reasonable link between the facts. Basically, it is a question of fact in which lawyer duty arises and they have to decide whether to tender the proof in the court or not. The Relevant fact is given in evidence to act from Section 5 to 55 and they are admissible in court. 

Case – Knapp v. state

In the American case of Knapp v. state, the standard of law expressed by the court was that “the assurance of the determination of a particular thing of evidence lays on whether verification of that evidence would sensible in general assistance settle the essential issue at trial.

Essential ingredients of relevance 

  1. Relevancy is not totally dependent on law.
  2. Relevancy is determined on the basis of practical experience, logic, common sense, human experience and basic knowledge of affairs.

Difference between relevance and admissibility

Relevance 

Admissibility 

At the point when certainties are so related as to render the presence or non-presence of different facts likely as indicated by the normal course of occasions or human conduct, they are called relevancy.

At the point when facts have been announced to be lawfully significant under I.E.Act, they become admissible.

It is found on the basis of the rationale and human experience.

It is established on law, not on the rationale.

The provision regarding relevancy is discussed under Section 5 to 55 of the Evidence Act.

The provision regarding admissibility is discussed under Section 56 of the Indian Evidence Act.

It mainly emphasis on what facts are necessary to prove before the court and not?

Between relevancy and proof, it acts as a decisive factor.

It basically implies the relevant facts.

It mainly focuses on what facts are admissible and what facts are not admissible.

Relevancy is basically a cause.

It is mainly an effect.

The court has the power to apply discretion in relevancy.

The discretion cannot be applied by the court in admissibility.

Admissible facts can be relevant.

Relevant facts are not admissible. Legal relevant facts are admissible.

Case- Ram Bihari v State of Bihar

In this case, the supreme court observed that relevance and admissibility are synonyms to each other but their legal implications are different from each other, and the admissible facts may not be relevant.

Relevant facts (Section 9)

Facts will help in supporting, refuting, clarifying or presenting significant realities are additionally important under this section, for instance, if an individual is absconding away not long after in the wake of being blamed for a wrongdoing, it is applicable as lead ensuing and influenced by certainties in the issue. In Sainudeen v State of Kerala (1992 Cr LJ 1644 Kerala), distinguishing proof of the blamed through his voice was significant under this section. 

This Section likewise covers test recognizable proof processions (TI parades). Its utility was clarified by the Supreme Court in Ramanathan v State of TN (AIR 1978 SC 1201) expressing that the normal and old routine with regards to arranging suspects for distinguishing proof by observers or by the unfortunate casualty winds up fundamental where the personality of the culprit is obscure.

Case – Lakkshmandas Chaganla Bhatia v State

Section 9 of the Evidence Act, 1872, brings out certain facts which can be treated as applicable. On the basis of this case Lakshmandas Chaganlal Bhatia v. State, the court laid down some of the following relevant facts: 

  1. Facts are important to clarify or present reality in issue or relevant fact. 
  2. Certainties that support or counter an induction proposed by a fact or truth in issue or a relevant fact. Realities that set up the character of anything or individual whose personality or identity is relevant. Substances which fix the time and spot at which any reality in issue or noteworthy assurance occurred. Certanities which shows the relationship of social events by whom any reality in issue or fitting truth was executed. 

Another section of the Indian Evidence Act which manages adequacy is Section 11. Section 11 manages those substances which are not regularly noteworthy yet somewhat wound up being significant in the event that they are conflicting with any appropriate truth or they make the proximity or non-closeness of any relevant sureness exceedingly more likely than not or fantastical. 

Sheik Ketab-Uddin v. Nagarchand Pattak– In this case, it was held, that where the executants of a record-holding presentations of cutoff purposes of property are alive and don’t give their evidence, such records are not adequate around there. 

Bibi Khaver v. Bibi Rukha,- In this case, the court said that all together that a security truth might be passable as significant under this segment, the state of the law is that: 

The insurance truth must itself be developed by usually indisputable proof.

It must, when developed, bear the expense of a reasonable presumption or deducing concerning the issue in the contest. 

Numerous confinements are made in Section 11. R.v. Prabhudas– In a charge of fraud, proof of ownership by the blamed for different records suspected to be forged is prohibited.

Another constrainment referenced for the circumstance Bela Rani v. Mahabir. In this case, the Section 11 is also obliged by Section 17-39. Besides, concerning the appropriateness of declarations made by a person since perished, it has been held that except if on the off chance that they are acceptable in chapter 32 and Section 33, Section 11 won’t profit to make them proof.

Conclusion

Relevancy is a test for admissibility. The topic of admissibility is one of the laws and is controlled by the Court. In Section 136 of Evidence Act 1950, a variation is made among relevancy and admissibility, on the off chance that it very well may be demonstrated that the proof would be relevant whenever demonstrated, the court will concede proof of it. All admissible evidence is relevant but all relevant evidence is not admissible. An irrelevant truth isn’t allowable in court. Be that as it may, in specific cases, proof which isn’t relevant under Section 5 to 55 may, in any case, be acceptable.

Evidence is considered as more important in deciding cases over many years. The power vested on the managing official in choosing whether a proof is permissible or not is immense and must be limited through rules. the law identifying with proof isn’t reasonable for the present age and it must be changed for the better working of the legitimate framework. An unmistakable line must be drawn between the intensity of the judge and the intensity of the judge all things considered a gigantic power vested on individuals would just bring about defilement of intensity. the law is incomparable and no man should given the optional capacity to twist it to his desire. Each bit of proof which concerns the case must be admissible whether it is found through illicit hunt or some other methods. There are many people among us who envade the eyes of law forever because of inadmissible evidence.

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Capital Punishment in India

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This article is written by Arya Mishra, a student of Banasthali Vidyapith, Jaipur. This article talks about capital punishment, types of capital punishment, capital punishment in India and many more.

Introduction

In India, the motive behind giving the punishment is based on two aspects, the first one is that the wrongdoer should have to suffer and the other is to discourage others from doing wrong by imposing punishment on wrongdoers. Amongst the different kinds of punishment for a crime in India, this article focuses on Capital Punishment which is also known as the death Penalty which is awarded by the court in the rarest of the rare cases.

In this article, the scope and validity of capital punishment shall be discussed in the context of the Indian Judiciary. Firstly, we should look at the advent of death as a punishment for brutal crimes and this shall be followed by a brief of some of the most famous cases related to Capital Punishment decided by the Indian Courts. The main aim of this article is to give the reader a clear understanding of the condition and view of the Indian Courts in regard to the awarding of Capital Punishment.

Death Penalty or Capital Punishment has always been a point of contradiction not only in the Indian Judiciary but also in most developed countries. The state’s authority is both questioned and established after the execution of Capital Punishment. India has made its stance clear on this matter in December 2007 and despite its stance, the Judiciary spares it for extraordinary infringement of the law. In the previous 10 years, the Indian Judiciary has condemned 1,303 individuals to death yet just 4 have been hung till death in this whole decade. There are many human rights movements in India according to which capital punishment is immoral because it affects one person’s right. The Indian Criminal jurisprudence is based on the combination of two theories: one is the Reformative theory, according to which crime seems like a disease. This theory believes that “You cannot cure by killing”. The main aim of this theory is to bring a change in the personality and character of the offender, to make him a useful member of society. The other theory which is followed is Preventive Theory, which says ‘Prevention is better than cure’. It’s better to take prevention before the commitment of a crime. This theory aims at preventing crime by disabling crime by imposing the death penalty on the criminal, or by confining him in prison or by suspending his driving license as the case may be.

The Indian Constitution likewise offered forces to the President and representative to suspend or exculpate capital punishment. In India, the death penalty is granted for the most genuine and horrifying offenses. The death penalty is given for murder, theft with murder, taking up arms against the administration and so forth. This punishment is given when the court arrives at an end that life detainment is lacking, in view of the circumstances of the case. The fundamental point of this examination is to study about the: 

  • Capital Punishment in India.
  • Constitutionality of Capital Punishment.

Background and origin of capital punishment

Chronicled records demonstrate that even the most antiquated crude clan’s used strategies for rebuffing transgressors, including ending their lives, to pay for the violations they had submitted. Murder regularly warrants this extreme type of punishment. ‘A life for an actual existence’ has been one of the most essential ideas for managing wrongdoing since the beginning of written history. 

The death penalty turns into a typical reaction to an assortment of wrongdoings, including rape and different military offenses as the inborn social orders formed into social classes and mankind made its own self-administered republics. Composed guidelines were caused among the general population to tell them about the punishment to be looked at by them on the off chance that they would partake in any of those wrongdoings. One of the soonest composed archives that bolstered the death penalty was the Code of Hammurabi, which was composed on the stone tables around 1760 BC. It contained 282 laws that were gathered by the Babylonian King Hammurabi, including the hypothesis of “tit for tat.” Several other old reports bolstered the death penalty including the Christian Old Testament, the Jewish Torah and the works of the Draco, an Athenian official, who proposed giving capital punishment to an enormous assortment of wrongdoings in antiquated Greece. 

Early structures for giving capital punishment were intended to be moderate, agonizing and unbearable, for example, being scorched and squashed by an elephant and so forth. Later social orders found that these techniques are extremely merciless and are of strange structure. During the eighteenth and the nineteenth Centuries, legitimate bodies found quicker and less excruciating ways to deal with the death penalty incorporating hanging and executing with the guillotine.

Capital punishment has become more controversial as time passes. The general population, who restrict this training, announce it to be heartless and out of line. They accept that no life ought to be taken, paying little respect to the wrongdoing that has been committed. DNA testing has demonstrated that the blamelessness of a few people waiting for capital punishment and the contention that nobody ought to be executed to abstain from murdering a guiltless individual has developed accordingly. 

Types of Punishments

Chapter III of the Indian Penal Code, 1860 (Sections 53 – 75) has set out the general arrangements identifying with the death penalty. The Code has accommodated a reviewed arrangement of punishment to suit the various classes of wrongdoing relying on the gravity of the offense. 

Section 53 accommodates six kinds of punishment that can be given to each convict. These are: 

Section 53-Punishment 

The punishment to which the guilty parties are at risk under the arrangements of this code are death, life imprisonment, detainment (rigorous with hard work and simple), forfeiture of property and a fine.

Amongst these punishments, as provided under the Indian Penal Code, the death penalty or capital is the most brutal form of punishment to be given to any person in the society.

The term ‘Capital Punishment’ is derived from the Latin word ‘Capitalis’ means ‘regarding the head’. Capital Punishment is given to a person when he commits the most grievous crimes against humanity. It is a process that includes the death of a person for his criminal offence, given by a court of law. Capital Punishment varies from place to place, state to state and country to country. It is a legal process whereby a person is put to death by the state as a punishment for brutal crimes. The Judicial decree is that someone is punished in this manner is a death sentence, while the actual process of killing the guilty is an execution. There has been a global trend towards the abolition of capital punishment but in India, there is no such position that was adopted. The obvious element of irreversibility makes this form of punishment different from all others. A guilty once executed for death can never be brought back to life. So if an error occurs while deciding a matter, it cannot be rectified later.

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Nowadays, the death penalty is used for those people who commit capital crimes or capital offences such as murder, terrorism, drug trafficking, etc. The persons who are below the age of 18 years are exempted from the death penalty. While some Arabic countries do not follow this exception and they also give the death penalty to those offenders who are below the age of 18 years. In most countries, lethal injection is used as a method for death execution while in some societies; violent death penalties are still being practiced such as shooting, electric chair, etc.

Capital punishment is practiced in countries like USA, China, Iran, Iraq, Japan, Somalia, Saudi Arabia, Malaysia, Taiwan, Vietnam, Nigeria, Afghanistan etc.   

Capital punishment in India

We cannot deny the presence of capital punishment even in the ancient history of India when we look back into Indian history. According to the Hindu teaching, it has been found that capital punishment has been permitted also and forbidden also. Hinduism preaches non- violence i.e. Ahinsa but it also teaches that a soul cannot be killed it is the human body to which the death of an individual is limited. The soul is reborn into another body upon death until Moksha.

The religious civil and criminal law of Hindus is encoded in the Dharmashastras and the Arthashastra. In Dharmasastra, the description of various crimes and their punishments is given including murder, the mixture of castes, etc. In this context, Bhagavad Gita contains that the righteous destruction of the wicked is commended as meritorious.

In India, capital punishment is mainly given for brutal crimes. The President has the power to grant mercy in death penalty cases. When an individual has been given capital punishment by the Sessions Court, it must be affirmed by the High Court. If the convict appeals in the Supreme Court and fails then at that point the convict can ask a mercy petition to the President of India. The Ministry of Home Affairs will set out the Appeals made to the Supreme Court and the solicitations made for the extraordinary leave to appeal to the Court by the convict.

Methods for providing capital punishment all over world

At present, the ancient methods have been abolished for providing capital punishment and new techniques are being adopted in order to reduce the physical pain experienced by the offender while dying. The new methods adopted for providing capital punishment include:

  • Hanging
  • Beheading
  • Stoning
  • Lethal Injection
  • Shooting by fire squad
  • Shooting
  • Electrocution
  • Gas chamber
  • Falling from an unknown height

The method of electrocution was first used as a method of Capital Punishment at Auburn State Prison of New York on August 6, 1890, and this method is at present used in various countries such as England, Russia and, Japan, etc.

During the II World War, a special machine called ‘Guillotine’ was used to kill Nazis and it was used in France for the execution of capital punishment. This machine was invented by Doctor Guillotine; it had a sharp blade with the help of which a person was beheaded. Later this machine was also used by England and Scotland for the execution of the death of the offenders.

The Shooting was used as a technique for providing death sentences in Russia and in China also. In America and Germany, the gas chamber technique was used as a method for the execution of the death penalty, in which the criminal is left to suffocate in a vacuum gas chamber and henceforth die. In this technique, the criminal dies immediately without any physical pain.

Hanging till death is popular in many countries but by considering India in this context, it is illegal to hang a criminal at a public place.

A new method is known as the lethal injection method introduced for the execution of capital punishment. For the first time, it was used at Yokohama in America in 1977. The positive quality of this technique is that it kills the criminal in a few seconds and it does not give any physical pain to the offender. At present, it is used in Canada, England, and other countries. 

Methods of execution in India

In India, the two popular methods of providing capital punishment are hanging and shooting.

  • Hanging

All executions in India are carried out by hanging the criminal till death. In 1949, the assassin of Mohandas Karamchand Gandhi i.e. Nathuram Godse was the first person to be hanged till death in Independent India. The Supreme Court of India suggested that the punishment of death sentence should be given in those cases which come into the ambit of ‘rarest of rare’ cases.

Since 2010, the death execution of two persons had been done. One is Afzal Guru, a terrorist who attacked the Indian Parliament in December 2001. His death execution was held in Tihar Jail, Delhi by hanging on February 9, 2013. The other is of Ajmal Kasab, who was the lone surviving terrorist of the Mumbai attack in 2008. His execution for death was done on November 21, 2012, in Yerwada Central Jail, Pune at 7:32 a.m.

  • Shooting

The Army Act, 1950 and the Air Force Act, 1950 also provides the provisions and methods for awarding capital punishment. Section 34 of the Air Force Act, 1950 empowers the Court to impose the death penalty to the offences mentioned in Section 34 (a) to (o) of the Act.

Section 163 of the Air Force Act, 1950 provides that:

In awarding a death sentence, a court-martial shall, in its discretion, direct that the offender shall suffer death by being hanged by the neck until he is dead or shall suffer death by being shot to death.”

This provides discretionary power to the Court to provide for the execution of the death sentence either by execution or by shooting. As the Air Force Act, 1950, the Army’s Act, 1950 and the Navy Act, 1957 also provide for similar provisions.

Crimes associated with Death Penalty

The crimes which are deserving of death are:

Aggravated murder

According to Section 302 of the Indian Penal Code, 1860, a person who commits murder shall be given the death penalty. In Bachan Singh’s case, the Court held that capital punishment is constitutional only when it is applied as an exception in “the rarest of the rare” cases.

Other offences resulting in death

In the Indian Penal Code, the death penalty is given to an individual who submits a murder during a furnished theft. Submitting or submitting Sati to someone else is additionally deserving of capital punishment. 

Terrorism- related offences not resulting in Death

The utilization of any exceptional classification of explosives so as to complete a blast that could jeopardize one’s life or cause genuine harm to one’s property is deserving of the death penalty.

Rape not resulting in Death

An individual who inflicts injury in  rape, because of which he passes on or is left in a “persistent vegetative state” might be granted capital punishment under the Criminal Law Act, 2013.

Gang rapes are punishable with capital punishment. These were formed after the gang rape of medicinal understudy Jyoti Singh Pandey in 2012 in New Delhi. 

As indicated by the 2018 Criminal Law Ordinance, an individual who rapes a young lady underneath the age of 12 might be given life detainment or sent to jail for a long time alongside fine. The alteration done in 2018 additionally indicates the death penalty or life detainment for the gang rape of a young lady who is younger than 12. These progressions were done in the criminal law after the gang rape and murder of an eight-year-old young girl named Asifa Bano, who set off a ton of political agitation in Jammu and over the entire nation.

Kidnapping not resulting in Death

As indicated by Section 364A of Indian Penal Code, 1860, grabbing not bringing about death is an offense deserving of capital punishment. On the off chance that anyone kidnapped somebody and takes steps to kill him during which the kidnapper act brings about the death of the person in question, he will be at risk under this section.

Drug trafficking not resulting in Death

On the off chance that an individual endeavor to commit any of scope of drug trafficking offenses or financing such kind of drug-related acts, the person in question can be condemned to death. punished by capital punishment.

Treason

An individual who attempts to take up arms or is taking up arms against the administration and helping Navy, Army or Air Force officials, troopers or individuals to submit a revolt will be rebuffed by the death penalty.

Military offences not resulting in Death

If a member of the Army, Navy or Air Force commits an abetment of assault, mutiny, and other related offences, he shall be punished by death penalty.

Other offences not resulting  in death

  1. If a person is a party to criminal conspiracy in order to commit a capital offence, he is punishable by the death penalty.
  2. A person who attempts to kill a life convict is punishable by a death sentence if the victim is harmed in the attempt.
  3. If an individual provides any false evidence against an innocent person, despite being of the knowledge that based on those evidence that person can be given a punishment of death penalty, and if it results in the execution of an innocent person, then the person who provides such evidence will be given the death penalty.

Category of offenders excluded from Capital Punishment

  •  Minor

As per the Indian Law, an individual who is younger than 18 years at the time of commitment of the crime can’t be given capital punishment. 

  • Pregnant Woman

As per the alteration made in the year 2009, Clemency must be conceded to a pregnant lady who is condemned to the death penalty.

  •  Intellectually Disabled

As indicated by the Indian Penal Code, an individual while committing out a heinous wrongdoing, was rationally sick or can’t comprehend that the nature of the demonstration performed by him is risky, can’t be rebuffed by capital punishment.

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Child Marriage and the Laws Pertaining to it 

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This article is written by Arpit Goyal, a third-year law student of Maharashtra National Law University Aurangabad. In this article the writer has tried to explain child marriage, issues related to it and the various general and personal laws relating to it.

What is Child Marriage? 

A marriage which is solemnized in contravention with prescribed age of marriage, by the General Laws. International Covenants such as The Convention on Elimination of all forms of Discrimination Against Women (CEDAW) and Convention on the Rights of Children (CRC) have prescribed the minimum age for marriage. In India, The Child Marriage (Restraint) Act, 1929 and now the Prohibition of Child Marriage Act, 2006 has prescribed the age of marriage which is 18 for girls and 21 for boys. In India, Child Marriage can be solemnized as per the respective personal laws and as such for the purpose of “solemnization” of child marriage, there is no single law. 

What are the issues pertaining to child marriage? 

  • Health-related issues: A Study conducted by UNICEF on Early marriage & Child Spouses in 2001 concluded that the risk of premature labor that is the Maternal mortality amongst girls aged between 15-19 years is about three times higher, babies born to a mother under the age of 18 tend to have higher rates of child mortality and the young babies lack parenting skills and decision-making powers. 
  • Human Rights issues: There are human rights issues as it is the case of child abuse. It is the fit case of child abuse (LCI 205 Report on Child Marriage, 2008) as child marriage denies the basic human rights to the spouses especially the girl child such as Health, Education and Well-being. A study of UNICEF, UN Children’s Report on Early Marriages: A harmful traditional practice, 2005 has also shown that the highest rate of domestic violence among women married by 18, is higher as compared to the ordinary marriages. 

Delhi High court in Association for Social Justice & Research Union of India & others, has held that child marriage is a grave form of human rights violator. Human Rights such right to education, right to development, right to health, right to employment, right to a dignified life, right to participation and well-being and personality development are being deprived to the girl child.

The girl child is the most vulnerable person in child marriage due to childbirth, rearing, bearing, domestic violence and lack of parenting skills. She is also denied of the basic education, especially in India, where the son is always preferred over the girl child. 

General Law on Child Marriage 

The law has failed to curb the prohibition of child marriages that are taking place across the religions, specifically Hindus in most of the cases. Many NGOs are fighting to eradicate the same and a movement is going on regarding the same. Even public interest litigations filed could not bring about any substantial difference. There is a need for sensitization in society regarding child marriage. Many attempts have been made to regulate child marriage even before the Independence of India and the commencement of the Indian constitution. Below mentioned are the general laws aimed at to regulate child marriage, though there has been no complete abolition of the same.

The Child Marriage (Restraint) Act, 1929 

This was the first of its kind legislation regulating the “child marriage” by prescribing the required age of marriage for both the parties to the marriage across India. This act aims to restrain the child marriage.

In the case of Sushila Gothala vs. State of Rajasthan the court stated that the minimum required age for marriage is 18 years for girls and 21 years for boys.

The Prohibition of Child Marriage Act, 2006 

 The Prohibition of Child Marriage Act, 2006, is aimed to

  1.  Punish the ones involved in the performance of child marriage, and
  2. To provide a legal opportunity to both the spouses of child marriage to repudiate the marriage, by way of a decree of nullity. (Voidable & Void) 

The present law is gender neutral in providing the right to both the boy and the girl child of forced marriage. The Prohibition of Child Marriage Act, 2006, may be viewed as: 

  1.  General and secular legislation (which is applicable to all the citizens of India).
  2.  Penal legislation. 
  3. Social and progressive legislation. 
  4. Matrimonial legislation, only to regulate “child marriage”, having a uniform application (Status of child marriage).

 The matrimonial angle of The Prohibition of Child Marriage Act, 2006

“Child Marriage” in all the situations is not something which has been declared as invalid. But, the legal validity of any marriage in India, is decided on the touchstones of family law. But there are some provisions of this Act which may be taken into consideration so far as the legal validity of child marriage is concerned. The Prohibition of Child Marriage Act, 2006 has incorporated some ancillary rules relating to the “maintenance” and “the legitimacy of the child” of such child marriage. 

The status of child marriage according to Section 3 of The Prohibition of Child Marriage Act, 2006 is voidable Marriage. Section 3 of the Act states that the child marriage is voidable at the option of both the party and the petition may be filed at any time but before completion of two years of attaining majority, before the District Court. 

Whereas, the status of child marriage as per Section 12 of The Prohibition of Child Marriage Act, 2006 is void Marriage. Section 12 of the Act states that child marriage is void in the following circumstances when the minor:

  1. Is taken or enticed out of the keeping of the lawful guardian; or
  2. by force compelled, or by any deceitful means induced to go from any place; or
  3. is sold for the purpose of marriage; and made to go through a form of marriage or if the minor is married after which the minor is sold or trafficked or used for immoral purposes, such marriage shall be null and void.

Section 4 and Section 5 of the Prohibition of Child Marriage Act, 2006 provides maintenance to the girl child and legitimacy of the child so born of child marriage. Section 4 states that the district court may make maintenance, residence, and custody of the child order during such petition in favor of the female spouse until her remarriage and Section 5 states that the child born of such marriage is deemed legitimate.

The Indian Penal Code- Child Marriage and offence of Rape 

The primary consequences of child marriage are a physical relationship between the husband and a girl and the procreation of children. These consequences are to be seen in the light of Section 376 of the Indian Penal Code, 1860 wherein in certain cases sexual intercourse with a woman with or without consent is an offense of rape. Section 376, Exception 2 states that “Sexual intercourse or sexual act by a man with his own wife, the wife not being under the age of 15 years, is not rape.” 

Certain situations and the offense of rape are as follows:

  1. Above 18 +Consent= No Rape
  2. Above 18 + No Consent= Rape
  3. Below 18 + With or without consent= Rape
  4. Above 15 + Girl being Wife + With or without consent= No Rape
  5. Below 15 + Girl being wife + With or without consent: Rape 

Keeping in view the above scenario, it appears that the Indian Penal Code has:

  1. Saved the institution of marriage, and 
  2. Endorsed, indirectly, the fact of child marriages taking place in the society and as per personal laws (because sexual intercourse with a wife who is between 15-18 years of age, does not constitute rape). 

Law Commission of India, 205 Report on Child Marriage, 2008 

The Law Commission of India Report in 2005 recommends the following things:

  • The child marriage below 18 for both girls and boys should be prohibited. 
  • The marriage below the age of 16 be made void and while those between 16 and 18 be made voidable. 
  • The provision relating to maintenance and custody should apply to both void and voidable marriages. 
  • Registration of marriage be made compulsory.

Personal Law and Child Marriage: Validity and Consequences 

Child Marriage in Hindu Marriage Act, 1955 

Child Marriage under the Hindu Marriage Act, 1955 is neither void nor voidable. The silence on the part of the legislature in Section 11 & 12 and express rule in the form of provision of Section 13 (2) (iv), renders it as valid. As a result of silence on the part of the legislature in Section 5, 11 & 12 and express provision under Section 18 of Hindu Marriage Act, child marriage is valid as seen in the case of Manisha Singh vs. State of NCT 

In Neetu Singh VS the State & Ors. the High Court of Delhi held that the marriage of minor is neither void nor voidable, but is punishable.

Under the Hindu Marriage Act, none of the parties have the option to repudiate the child marriage by way of a decree of nullity. The High Court of Rajasthan in Sushila Gothalal vs. State of Rajasthan directed that State should take necessary steps to stop the menace of child marriage by punishing all involved in such marriages. As a result of which, the Chief Minister of Rajasthan had made a special appeal to all its people in the State to prevent these child marriages.

Nevertheless, a female child has been given right to repudiate the marriage under Section 13 (2) (4), by way of divorce. In Roop Narayan Verma vs. Union of India, the High Court upheld the constitutional validity of Section 13 (2) (4) of the Hindu Marriage Act by terming it as the exercise of power by the legislature under Article 15 (3) of the Indian Constitution.

In the wake of silence on the part of the legislature under Section 11 and 12 of the Hindu Marriage Act, 1955 and express provisions in the same, the status of child marriage in Hindu Marriage Act, 1955 appears to be uncertain. There is a possibility of two arguments in this context: 

  1.  That the child marriage in Hindu Marriage Act, 1955 is not valid in view of Section 5, or
  2. That the child marriage in HMA is neither void nor voidable but renders valid. 

It would be further proper to refer to some judicial pronouncements, in order to know the judicial position: 

In P. Venkataramana vs. State, the Andhra Pradesh high court noted that such marriage in Hindu Marriage Act, 1955 is not void, by observing that had the lawmakers intended that they would not have given to a wife the right to repudiate her marriage solemnized before the attainment of the age of 15 years. Moreover, the high court observed that neither under Section 11 nor under Section 12 of the Hindu Marriage Act, 1955 there is any mention of marriage in contravention of Section 5 (iii).

Supreme Court in Lila Gupta vs. Lakshmi Narayan, laid down that though Section 5 (iii) of the Hindu Marriage Act prescribes a minimum age of marriage, a breach of this condition does not render the marriage void. The court, in this case, observed that it would be hazardous for marriage laws to treat a marriage in breach of a certain condition as void even though the law does not expressly provide for it. This case was concerning the rights of a widow to inherit her deceased husband’s property against the claims of her brother-in-law and nephew who had challenged the validity of her marriage. 

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The same approach was taken by the Karnataka High Court in V. Mallikarjunaiach vs H.C. Gowramma. In this case, the husband had sought a declaration from the trial court that his marriage was void since he had not completed the age of 21 at the time of marriage. According to the court, the law does seek to discourage marriage of underage boys and girls but not to the extent of making the marriage void or voidable. 

Andhra Pradesh High Court in Kokkula Suresh vs State of AP, held that such marriage is neither void nor voidable but valid. Court also recognizes the husband as the guardian of the girl child (female spouse) and he was entitled to her custody. 

However, Madras High Court in T. Siva Kumar vs Inspector of Town Police Station has taken a completely different outlook. It was held that even though a marriage contracted by a person with a female of fewer than 18 years is voidable and subsists until it is annulled by the Court, the marriage though not invalid but is also not a valid marriage in strict sense and the male does not have all the rights which would otherwise emanate from a marriage which is valid in a strict sense. 

Child Marriage in Muslim Personal Law (MPL) 

Capacity in which a Muslim can marry: 

  1. Sound mind 
  2. Majority

Majority as per Muslim Personal Law is presumed that a Muslim attains majority at the age 15. Privy Council in Nawab Sadiq Ali Khan vs. Jaya Kishori said that the majority in the case of a girl is attained at the age of 9, whereas Hedaya law states that the earliest period for a boy is 12 years and for a girl is 9 years. 

 Marriage of a Minor Muslim as per Muslim Personal Law

The marriage is consummated when the Muslim is below the above-mentioned age and is a minor. The marriage of a minor may be solemnized with the consent of a guardian. Such a marriage, although valid, is capable of being repudiated by the Muslim minor through the option of puberty.

Consequences of a Minor’s marriage (Child marriage) in Muslim Personal Law:

In order to know the consequences of minor’s marriage in MPL, the following points must be taken into consideration: 

  1. Marriage of two Muslims who have attained the age of puberty i.e. Major is VALID.
  2. Marriage of two Muslims who have NOT attained the age of puberty i.e. Minor is INVALID. 
  3. Marriage of two Muslims who have NOT attained the age of puberty i.e. Minor but the marriage is with the consent of guardians is VALID. 
  4. Marriage of two Muslims who have NOT attained the age of puberty i.e. Minor but the marriage is solemnized with the consent of the guardians, then the minor (both parties) on attaining puberty, may repudiate the marriage with the consent of a guardian, provided marriage is not consummated (Option of Puberty).
  5. Marriage of two Muslims who have NOT attained the age of puberty i.e. Minor but solemnized with the consent of guardians then the female spouse can divorce the male spouse under Section 2 (vii) of Dissolution of Muslim Marriage Act, 1939, provided marriage is not consummated (Right of divorce).

 The option of puberty and Repudiation of marriage

“Option of puberty” is a right which is given to both the parties of the Muslim marriage to repudiate i.e. to cancel the marriage, if solemnized during minority, with the consent of their guardian. For the purpose of marriage in Muslim Personal Law. They can exercise this option on attaining the age of 15, as this is the age where it is presumed that parties are major so far as marriage is concerned. As far as the exercise of option of repudiation is concerned, it is must that the child marriage (marriage solemnized during minority) must be valid (must have been done with the consent of legal guardians).

Following are the ingredients which are to be established in order to exercise this right: 

  1. Marriage during minority with the consent of father or guardians for the said marriage, and 
  2. Attainment of Puberty (Majority i.e. 15). 

In Behram Khan vs. Akthar Begum , it was held that ‘Consummation of marriage before the age of puberty does not deprive the wife of her option. But the consummation of marriage after attaining puberty disables the person from exercising the right of repudiation/option of puberty. 

Repudiation of marriage

Repudiation of marriage is an act of either of the parties to annul or cancel the marriage solemnized. It is the personal declaration or the wish of a person to declare so, unlike in the Hindu Law, Muslim law has permitted both the parties to the marriage to exercise this option. 

Modality & Consequences of Repudiation of Marriage

Repudiation is an act of parties thereby either of the parties to the marriage can avoid the marriage, by expressing/pronouncing/communicating, the cancellation of marriage. However, there is a time limit for the same for wife it is till she attains the age of 18 and in case of a boy i.e. the husband, there is no such time limit.

An individual act of cancellation, per se, cannot avoid the marriage or marital tie. The necessary court order/decree/judicial confirmation is a must to avoid the same. In the meantime, the parties remain married and

  1. If either of them dies, the other will inherit to him or her in the capacity of a spouse.
  2. If establishes a sexual relationship that won’t be unlawful.

Divorce on the basis of Repudiation (under Dissolution of Muslim Marriage Act, 1939)

Section 2 (vii) of the Dissolution of Muslim Marriage Act, 1939 states that: …that she having been given in marriage by her father or another guardian before she attained the age of 15 years, repudiated the marriage before attaining the age of 18 years, provided that the marriage has not been consummated.

Interpretation of Section 2 (vii) 
  1. Section of 2 (vii) is in the nature of the right of divorce, therefore applicable only to a valid Muslim marriage. 
  2. This provision is applicable only to a female spouse.
  3. No time limit is framed therein to exercise this right of divorce but for the act of repudiation, there is a limit i.e. till she attains 18 years. 
  4. This provision has, by necessary implication, incorporated the age of puberty i.e. 15 years. 
  5. For the purpose of divorce under this section, she has to establish a valid repudiation.
  6. Section 2 (vii) has regulated her “right of repudiation” (option of puberty) in the sense that she has to exercise the said right within the span of three years i.e. between the age of 15 years to 18 years. 

Requirements u/Section 2 (vii): For the purpose of the exercise of the right of divorce as per this provision, the following essentials have to be satisfied by her: 

  1.  That she was given in marriage by a father or guardian when she was a minor (Marriage during minority)
  2. That she has repudiated the said marriage
  1. After attaining puberty and 
  1. b) Before attaining 18 years of age; (Repudiation of marriage “after” & “before”) and 
  1.  Marriage has not been consummated (No consummation of marriage) 

 Loss of her Right of Divorce

Her right of divorce in this connection is lost the moment when: 

  1. She fails to repudiate the said marriage before attaining 18 years (it shows her willingness to continue with the said marriage); 
  2. She establishes sexual relationships with the male spouse (it shows her willingness to continue with the said marriage and sexual relationship and procreation are the legal incidence of marriage) 

However, the Rajasthan High Court in Shabnam vs Mohd Shabir , held that the girl would not lose her right of divorce if marriage is consummated before she attains the age of 15 years. 

Some of the judicial pronouncements for the age of puberty

Privy Council in Nawab Sadiq Ali Khan vs. Jaya Kishori, says that the majority in the case of a girl child is attained at the age of 9. 

Md. Idris vs. State of Bihar and Ors., Patna High Court ruled that as per the interpretation of Muslim law, by Mulla, in Mulla’s Text on Principles of Muslim Law, the age for a girl to attain puberty is 15 years of age. 

The similar has been reiterated by the Delhi High Court in Mrs. Tahra Begum vs. State of Delhi & Ors that the age of puberty is 15 years of age and girl is free to marry anyone of her choice, regardless of the consent of the legal guardian. Court acquiring the accused-husband of charge for kidnapping held that she is at liberty to decide when to marry and where to live. The Delhi high court laid down the following points in this connection:

  1. Marriage solemnized after attaining puberty would not be void.
  2. Age of puberty is the requirement of marriage under Muslim Personal Law.
  3. Muslim girl is at the liberty to reside with the husband.
  4. Muslim girl can marry without the consent of her guardian in the event of puberty.
  5. Muslim Girl who attained puberty i.e. 15 years of age can marry and as such the marriage is not void.
  6. Muslim Girl, however, has the option of repudiation of marriage.

But in the same year, ignoring well-settled law pertaining to the age of marriage in Muslim personal law, Karnataka High Court took a contrary approach in Mis. Seema Begum vs. State of Karnataka. In this case, the declaration was sought by a Muslim girl, who was 16 years of age when a petition was filed, that she is not governed by the provisions of Prohibition of Child Marriage Act, 2006 and in her case, it is the Muslim personal law, which has allowed her to marry on 15. The petition was rejected and no such declaration was issued in her case. Karnataka High Court, accordingly held:

  1. That a Muslim girl is not free to marry on her own before the attainment of the age of majority or the required age of marriage i.e. 18 years of age as per the definition of “child” under Section 2 (a) of Prohibition of Child Marriage Act, 2006.
  2. That the statutory law (Prohibition of Child Marriage Act, 2006) will prevail over the un-codified personal law (Muslim personal law). 
  3. That Prohibition of Child Marriage Act, 2006 is applicable to all the Indian citizens uniformly irrespective of their religion. 
  4. That despite Delhi High court ruling that a Muslim girl can marry before 18 years of age. 

Therefore, child marriage of two Muslims could be terminated in the following way: 

  1. Avoidance of Marriage: Option of Puberty (followed by judicial order).
  2. Avoidance of Marriage under Prohibition of Child Marriage Act: Decree of Nullity.
  3. Dissolution of marriage: Divorce & Talaq.

Status of child marriage in Personal Laws

The Special Marriage Act, 1954

Hindu Marriage Act, 1955

Indian Christian Marriage Act, 1869

The Parsi Marriage and Divorce Act, 1936

Muslim Personal Law

Section 4 (c) read with Section 24 (1) (i)

Section 5 (ii) read with Section 13 (2) (4)

Section 3: Minor read with Section 19

Section 3 (c)

Principle of Puberty read with Section 2 (vii) of Dissolution of Muslim Marriage Act, 1939

VOID

NEITHER VOID NOR VOIDABLE (But she can move a petition for divorce)

RENDERS VALID (By consent of guardian)

INVALID MARRIAGE

VALID (But she can move a petition for divorce)

 

 

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Right to Constitutional Remedies

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This article is written by Akash R. Goswami of faculty of law,  Aligarh Muslim University.   In this article, he has discussed the constitutional remedies and right to approach the Supreme Court provided by the Constitution of India, and the concept of Public Interest Litigation. 

“Don’t interfere with anything in the Constitution. That must be maintained, for it is the only safeguard of our liberties.”  

                                                                                              – Abraham Lincoln

Introduction

Rights make people powerful, although it is not necessary that all citizens have equal resources and wealth one thing is for sure that they have it in terms of equality, all the countrymen inherently by birth, have their fundamental rights. 

But to protect their rights people must have an alternative to enforce them. Article 32 works in that sense. With great power comes with great responsibilities, people use these rights as a weapon of harassment and PIL become the Industry of vested interest. Despite that, no one can be allowed to infringe on the rights of others. To ensure the safety of his/her rights people must be aware of the remedies provided in our constitution. Let us talk about in particular.

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Article 32 

In day to day life, people do some acts which result in the violation of someone else’s rights. They may not do so deliberately but their acts may result in the violation of rights. Some rights if contravene, people ask for compensation or damages like in contracts & torts. But if some rights especially the fundamental rights are violated then people seek to constitutional remedies.

“Constitutional remedies” is envisaged in our Indian Constitution under article 32 in Part III. Every citizen of India is guaranteed five fundamental rights, in totality it’s six but if any of the five fundamental rights are violated then the sixth fundamental right ensures people and protects other fundamental rights from being violated. concerning that, if any fundamental right is infringed, sixth fundamental right .ie. “Right to Constitutional Remedies” provides that people can enforce or claim these rights in the Hon’ble Supreme court.

article 32
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Remedies for enforcement of the rights conferred by Article 32

This article contains four clauses:

  1. People have the right to move the Court by appropriate proceedings for the enforcement of their rights granted by part III of the Indian Constitution. In other words one can move to enforce his/her right to the apex court in way of proper proceedings is assured. 
  2. Apex Court shall have the power to Produce orders, directions, injunctions, and writs, including writs in the nature of habeas corpus, mandamus, quo warranto, prohibition and certiorari whichever may be suitable, for the enforcement of any of the rights conferred In part III. 
  3. Parliament can empower any other court to issue directions, does not include Supreme Court & High court. M.V Plyee rightly claims the first three clauses of article 32, together make fundamental rights under the constitution real and forming the Crowing part of the entire chapter. 
  4. The right to move to the Supreme Court shall not be suspended except provided by the constitution like in case of emergency.  In other words, the President of India may under article 358 make separate proclamation by which Article 32 remains suspended even the person’s right is violated. This is because individual liberty is not more important than the interest of states.

Right to constitutional remedies works on the Doctrine “Ubi Jus Ibi Remedium” which means when there is right there is a remedy. As the people of India guaranteed many rights so no one can violate these rights, then there must be some remedies to protect them.

In case Ram Singh vs Delhi [1], the Supreme Court of India observed that it is the duty of the supreme court to see the right, intended to be fundamental must be kept fundamentally.

A mere threat to infringement of fundamental rights is enough to justify the issue of the writ in case of Simranjit vs Union Of India[2]. 

 Article 226

Power to issue the writ is not only vested in the hands of the Supreme Court of India, but also in the hands of every High Court of India.  Article 226 empowers the High Court to issue any person or authority and state institution, including the government call for directions, orders or writs. Writs in the nature of habeas corpus, mandamus, prohibition, certiorari, quo warranto or any of them.

Article 226 has four clauses

  1. Notwithstanding anything in Article 32, every High Court shall have the power throughout the territory in which High Court exercises its jurisdiction issue writs, orders and directions for the enforcement of right conferred in part III and for any other purpose. 
  2. Power assured by clause (1) to issue directions,orders or writs by High Court within the territory exercising its jurisdiction in relation to the territory in which the reason of action, wholly or partially, arises for the exercise of such power, notwithstanding that the bench of such Government or authority or the residence of such person is not within those territories. 
  3. Where a writ petition has been filed against the respondent party an interim order by way of injunction or stay has been passed against respondent without-
  1. Providing to such parties, copies of the petition and all documents in support thereof.
  2. Giving such a party an opportunity to be heard.
  3. If such respondent party moves an application for removing the interim order and gives a copy of such application to the petitioner, the Court is required to decide such application within two weeks from the date on which such application is filed or on the date on which the copy of such application is provided to another side whichever is later. 
  4. The power empowered to the High Court by this article shall not be in derogation of the powers entitled on the Supreme court by clause (2) of Article 32.
  • Writ petition only praying for refund of money against the State is not maintainable observed in the case Suganmal vs State Of Madhya Pradesh[3].

  • It is established that the remedy provided in Article 226 of the Constitution of India is a discretionary solution which means on its own will, and the High Court has always its discretion to refuse or to grant such grievances in certain circumstances even though a legal right might have been infringed.

Article 227  

This article States that every High Court shall have superintendence over all Courts and Tribunal within the territory having the jurisdiction except the court established by the armed forces.

High Court can, under Article 227

  • Call for returns from such courts.
  • draft and issue general to maintain rules and regulations for smoothing the practice and proceedings of such courts.
  • Prescribe the mode in which books, documents, entries, and accounts be kept by the officers.
  • Settle salaries and remuneration allowed to the sheriff and clerks of such Court. 

 Difference between Article 32 & Article 226

 

              Article 32

            Article 226

Article 32 entitled the Supreme court to issue directions, orders, and writs in the nature of habeas corpus, mandamus, prohibition, certiorari, quo warranto.

Whereas, article 226 gives power to every High Court to issue directions, orders, and writs in the nature of habeas corpus, mandamus, prohibition, certiorari, quo warranto, and for any other purpose like an administrative tribunal.

Article 32 can be suspended during the time of emergency by the President of India (except article 21 & 22).

On the contrary, Article 226 can not be suspended even during times of emergency.

Article 32 is itself a Fundamental Right. An aggrieved party can approach the Supreme Court for redressal for the enforcement of a right,  being it is a fundamental right.

On the other hand, Article 226 is not a right as that of article 32.

Being the guarantor of Fundamental Rights, the Supreme Court can not refuse to issue Writs.  

But the High Court has the Discretionary power while issuing the Writs.

Supreme Court has the right to issue the Writ  All over the Territory of India

In comparison, the High Court can issue the Writs within the territory of India in which it exercises its jurisdiction.

Writs

Writs are the formal written document bearing the name of the court, or other legal authority to do some act, abstain or refrain from doing something. These writs have been borrowed from England, where the history of writs had a long development and counted for more number of technicalities.

Under Article 32 & 226 of the Indian Constitution supreme court and the high courts have the power to issue Writs respectively. In India, first writs were issued by the Supreme Court at Calcutta later by the supreme court of Bombay & madras and since 1861 & 1937 by high courts and Supreme Court of India respectively. 

There are five types of writs which are as follows.

Habeas corpus

The term habeas corpus is derived from the Latin term which means “You must have the body”. In the legal context, it stands for habeas corpus Ad subjiciendum means writ for securing liberty. By the help of this writ Court direct the person or any authority and state institution whosoever detained/wrongfully confines another person, to produce the body of the prisoner before the court so as to decide by the court the validity, jurisdiction, and justification for such detention. The principle aim of this writ is to ensure judicial review of unlawful detention on liberty or freedom of an accused. And also enables an immediate claim of the right of a person as to his freedom.

Article 22  of the Indian Constitution provides that, if the police or any authority arrested the person is required to be produced before a magistrate within 24 specified hours of his arrest (excluding the journey hours) and miss out to do so would entitle the arrested person to be released.

This writ can not be granted where a person has been committed taken by police under an order from a competent court then its Prima facie (at first sight) the order does not appear to be without justification, jurisdiction or wholly illegal, hence writ of habeas corpus would not be work.

It is granted not only against state but also against the individual, where a person holds the wrongful detention of another person, in this case, it is the duty of the police to make necessary efforts and make sure that the detention of the person got released, but the police can not put under pressure to do the impossible.

In the case of the National Emergency imposed this Writ can not be issued and people can not seek the assistance of the court for illegal detention observed by the Supreme Court in Case A.D.M Jabalpur vs. Shivkant shukla[4]. Five  Judges constitutional bench gave this controversial judgment with a ratio of 4 out 5.

Quo Warranto  

This means what is your authority? This writ is used to Control the judicially Executive actions in the matter of appointment to public office under relevant provisions. This writ also helps in to protects citizens from the holder of a public office which he has no Right and calls upon the holder to public office to the Court on what Authority he is holding the office is a question. If he is not eligible for the office then the court directs the person to vacate the office and declares the office to be vacant.

This writ helps to maintain control over Executive from making appointments in public office against law and also protects the public from being deprived of public office to which the public has a right.

Quo Warranto also helps to prevent illegal usurpation of public office by an individual. To issue this writ there must be some conditions to be satisfied by the court that the office is in question must be public,created by the constitution or law or by statutory provisions and the person who is holding the office is not qualified to hold the office and the person has to show on what Authority he is holding the office. In the case of Jamalpur Arya samaj vs. Dr D ram[5], Patna High Court said that writ of Quo Warranto can not be issued against private association only public offices will be lying under this writ scope.

Mandamus

Derived from the Latin term meaning “We command”. It is issued by the Court to an authority directing to perform a public duty which is imposed on it by law. In other words, when a body omits to do Some act which it’s bound to do, it can be commanded to do the same.

Mandamus writs help to confines the limit of the body and exercise its Jurisdiction within the scope vested on it. To issue this writ there must be some conditions that are required to be fulfilled that the petitioner must have the legal right to the performance of the legal duty, the legal duty must be of public nature. The right sought to be enforced must be subsisting on the date of the petition and as a general rule mandamus is not issued in anticipation of injury. 

Mandamus can not be invoked against the President & Governor of the state in his personal capacities, moreover no mandamus can lie against an officer or member of parliament or an officer or member of State legislature in whom power is vested by the Constitution for Regulating procedure and conduct of the business for maintaining Order and conduct in parliament as well as state legislatures.

Certiorari     

In the literal sense, it means “to be informed” or “To be Certified”. It is issued by the apex/higher Court to the lower Court or to the Tribunal either to pass-on a case pending with the later to itself or to Squash the order of the later in a case. It is issued when there is an excess of jurisdiction or lack of jurisdiction or there is an error of law.

The writ of Certiorari is preventive as well as curative in nature and could be issued only against the judicial or quasi-judicial body and not against the administrative body. After 1991, the Supreme Court ordered that this writ can be issued against the Administrative body affecting the rights of individuals. But a writ of certiorari cannot be issued to produce a call for records or paper And proceeding of an Act or Ordinance and for Quashing such Act and Ordinance.

Prohibition

Stand for “order inaction” and issued by the Higher Court to the Lower Court or Tribunal Directing the judge or party to cease the litigation because the inferior court does not have jurisdiction to hear and decide before it. This writ is an extraordinary remedy, rarely used. Same as the writ of certiorari, this writ can be issued against the Judicial & Quasi-judicial body. 

The fundamental distinction between Certiorari & Prohibition that they are issued at different stages of proceedings. When a subordinate court takes up a matter for a hearing over which it has neither jurisdiction nor it has legal  power to decide the case the person against whom injunction/action is taken can proceed to the Higher Court for the affair of writ of prohibition on which order would be issued for refraining the subordinate court from continuing the proceedings and hearings .

On the other hand, if the court takes the matter and gives the decision which it’s not legally bound to do, the party would need to move to a higher court to quash the order.

Public Interest Litigation

Meaning

PIL stands for “PUBLIC INTEREST LITIGATION” Which simply means for the protection of public interest. PIL is a legal remedy initiated in a court of law for the enforcement of public interest or general interest in which masses have a peculiar interest by which their legal rights affected. In PIL it is not necessary that the aggrieved party itself approach the court anyone can introduce PIL even the Court itself or by any other private party. It is also not mandatory for the exercise of the jurisdiction of the Court, the victim approached the court personally. PIL is the power given to the general public by the Court through Judicial Activism, however, it is to be satisfied to the Court that the petition filed is for public protection, and not on the basis of lack of legal merit.

Concept of PIL

The concept of public interest litigation was initially planted in India by Krishna Iyer J., in 1976 in Mumbai Kamgar Sabha vs. Abdul Thai case[6], Moreover Indian PIL is the improved version of PIL of USA. Basically, public interest law provides legal representation to underprivileged groups and masses.

During the time of Emergency (1975-1977) the country witnessed the colonial nature of the Indian legal system, state repression and governmental lawlessness have been done on a wide scale, there is complete deprivation of civil and political rights. Many innocent people, including political opponents and journalists, were sent to jail, this will provide better circumstances and for the judges of the Apex Court to disregard the hindrance of the Anglo-Saxon procedure and give access to justice to the poor.

Before the 1980s, only the affected parties had the Locus Standi to file the case and continue the procedure and a non-affected person having no locus standi will not do so. However, all these scenarios gradually changed during the post-emergency period and Supreme Court tackles the problem of access to justice by radical changes and modification has been done in the requirement of locus standi and of party aggrieved.

Magnificent efforts of Justice P.N Bhagwati & Justice V.R Krishna Iyer been the main reason for the Juristic Revolution to convert the Apex Court of India into the Supreme Court for all the Indians.

First Case of PIL was reported in 1979 showing the inhuman conditions of prisons and trial prisoners and a new era of PIL proclamation is done by Justice P.N Bhagwati in SP Gupta vs. Union Of India[7]. In this case, held that any member of public action or group with bonafide intention invokes the writ of Jurisdiction from High Court and Supreme Court seeking redressal against violation of the legal or constitutional right of a person who due to social or economic or other reasons can not approach to the court.

Due to the influence of this case, PIL becomes a powerful weapon for the enforcement of public duties.

Importance of PIL

There is numerous importance of PIL, let us discuss below them-

  • PIL is the better use of law to advance human rights and cover the scope of broad public issues.
  • Through the concept of PIL court seek to protect human rights by creating a new regime and expanding the meaning of fundamental rights.
  • Filing of PIL is an inexpensive remedy anyone can get relief easily and hence remedial in nature.
  • PIL helps us to improve things, which is not done by the executive properly as the Judiciary haul up the executive.
  • If a person is unable to produce sufficient evidence to support his/her case due to the economic and social cause, the Court may appoint a commission to look into the matter and collect the relevant facts about the case.
  • Through judicial invigilation, Court seeks to maintain state institution or also protect the rights of minorities and countless efforts made through PIL to maintain a healthy environment.

Process of filling a PIL

 Any citizen of India can file a PIL for the sake of public welfare where the interest of the masses get affected under Article 32 in Supreme Court or under Article 226 in High Court and under Court of Magistrate under section 133 of CRPC. .A court can treat a letter or telegram as a Writ Petition and takes action upon it if some conditions collateral to it should be satisfied.

Public Interest Litigation has been logged in the same manner, as a writ petition is filed. If a PIL is filed in the High Court, then two copies of the petition have to be filed. And for the Supreme Court, then Five copies Also, an advance copy of the petition has to be served to each of the opposite parties, and this proof of service must be affixed on the petition. After that a Court fee of Rs. 50, for each number of the party, have to be affixed on the petition. Proceedings, in the PIL, start and carry on in the same manner, as other cases.

However, during the procedure and hearing of case proceedings, if the Judge feels that he may appoint the commissioner, to investigate the facts and allegations like pollution being caused, trees being cut, etc. After givings of replies, by the opponent party, or reapplication by the petitioner, the final hearing takes place, and the judge gives his eventual decision.

Subject Matter of PIL

Some categories are as follows which will be entertained as PIL

  1. Bonded labor 
  2. In the matter of exploitation of children
  3. Non-payment of minimum wages
  4. Petitions coming from jails, complaining about the harassment, speedy trial, death in jail as a fundamental right,  etc.
  5. complaint against police for refusing to register a case,  bride-burning, etc.
  6. Petitions against the cruel acts on women, in particular, harassment of bribe, bribe-burning, murder, rape, kidnapping, etc.
  7. Petitions complaining harassment of persons belonging to scheduled caste and scheduled tribes
  8. Petitions pertaining to environmental issues

Merits & Demerits of PIL

 

                MERITS

              DEMERITS

Help to serve people at large not only individuals but also a weaker of the society, as PILi a is the less expensive remedy.

Whereas, due to its less fee more number of PIL filed hence lead to a lack of legal merit only used as a tool of harassment. 

PIL is a speedy trial method as it can be issued by the High Court as well as Supreme Court, so it is not necessary to move orderly in court.

Due to the pool number of PIL, it kept busy Courts hence Court pay less attention to other litigations.

The mechanism of human rights can be managed and protected and set a new democratic regime.

But, sometimes people used PIL as a mass destructive weapon for the sake of his own benefit.

 

Aspects of Public Interest Litigation

(a) Remedial in Nature: The remedial nature of PIL is from traditional Locus standi rules. It indirectly incorporated the principles envisaged in part IV of the Constitution of India into part III of the Constitution. the longing and emerging of part IV into part III of the Constitution had changed the procedural nature of the Indian law into the dynamic welfare of public interest. In Bandhu Mukti Morcha v/s Union of India[8]. Example of this change in the nature of the judiciary and for juristic revolution.

(b) Representative Standing: Representative standing can be viewed as an innovative standing exception which allows a third party (not an aggrieved party) to file a habeas corpus petition on the ground that if the aggrieved party cannot approach the court himself. And in this context, the Indian concept of PIL is much wider as compared to the American. 

(c) Citizen standing: This doctrine marks a great expansion of all the court’s rule, and hence being a protector of an individual right to the guardian of the rule of law.

(d) Non-adversarial Litigation: The Supreme Court in case People’s Union for Democratic Rights v. Union of India[9], held that  point with all the emphasis on that public interest litigation is a totally distinct kind of litigation and unlike from the traditional litigation which is essentially of an adversary nature where there is a dispute between two parties, one making claim or seeking relief against the other (appellant) and that other opposing such claim or resisting such relief (respondent).

(e) Smoothing the strict rule of Locus Standi: The stern rule of locus standi has been cut short by way of  Representative standing, and Citizen standing which has explained earlier. In D.C.Wadhwa v. State of Bihar[10]. Supreme Court held that an applicant, a professor of political science who had done the relevant research and enormously interested in ensuring proper implementation of the constitutional provisions, challenged the practice which becomes the usage of the state of Bihar in proclaiming a number of ordinances without getting the approval of the legislature. The court held that the applicant as a member of the public has initiates  ‘sufficient interest’ to maintain a writ petition under Article 32.

The strict rule of locus standi has been moderate and a person who is acting in a bonafide (good intention)  and having sufficient interest in the proceeding of Public Interest Litigation will have a locus standi and he/she can approach the court to wipe out such violations of fundamental rights and genuine violation of statutory provisions, but not for personal gain or personal profit or political motive or for not any unlawful consideration. the court has to balance between two conflicting interests:

(i) nobody should be allowed to engage in wild and reckless allegations which result in harm in the character of others; and

(ii) nobody should be allowed to do public mischief and to avoid mischievous petitions which have no legal merit seeking strongly, for unlawful motives, is not justifiable by the executive and the legislature. It is unfortunate to note that on account of temporary proceedings initiated before the courts, number days are wasted, which could have been spent for the disposal of cases. Though the Supreme Court tries every possible effort in fostering and developing the concept of PIL and extending its arms of sympathy to the poor, ignorant, deserted or oppressed and the needy whose fundamental rights are infringed and violated and whose prayers go unnoticed, unrepresented and unheard.

(f) Epistolary Jurisdiction: The judicial activism played an important role and take the highest bonus when it’s ordered to wipe tears from some eyes. This jurisdiction is someway different from collective action. As anyone can send the petition in the form of a letter and postcard and it will be treated as a petition and there is no need to show Locus standi mere sufficient interest for public welfare with bonafide intention is enough. In order to that number of PIL cells were open all over India for providing the desk for help to the socially and weaker class of the society.

Factors that have contributed to the growth of PIL are as follows:

  • The nature of the Indian Constitution. Unlike Britain, India has a written constitution and Part III ( which includes Fundamental Rights) and Part IV (Directive Principles of State Policy) provides a structure for maintaining relations between the state and its citizens and between citizens and among themselves.
  • India has the most progressive social legislation to be found anywhere in the world either relating to bonded labour, minimum wages, environmental issues, etc. This has made it quite easier for the courts to force the executive and state institutions when it is not performing their duties in ensuring the rights of the poor as per the law of the land.
  • Political, social and economic rights given in the Indian Constitution under Part IV are not justifiable, courts have creatively put these into fundamental rights thereby making them judicially enforceable. For example, the right to life in Article 21 has been enlarged to include the concept right to free legal aid assistance, the right to live with dignity, the right to education, the right to work, etc.
  • In PIL cases where the complainant is not in a position to provide all the necessary evidence, either because socially economically weaker, courts have appointed commissions to collect relevant information or facts and present it before the Court.

The mechanism for protection of Human Rights through PIL

Features of PIL is the better mechanism of PIL for securing Human rights, the courts seek to safeguard human rights in the following ways:

1) By inventing a new regime of human rights and by making a wider concept of the fundamental right to equality, life, and personal liberty.  this results in, the right to a speedy trial, free legal aid, dignity, means and livelihood, education, medical care, clean environment, right again sexual harassment, solitary confinement, bondage and exploitation and so on emerge as human rights. These new re-conceptualized rights enforced through PIL.

2) Transformation towards a democratic state helps to assure justice. This is done by enlarging the scope of the traditional rule of locus standi. Any public or social action group can approach the court on behalf of the victim. Courts observation can be drawn even by writing a letter or sending a telegram. This is called epistolary jurisdiction.

3) By means of new kinds of relief under the court’s writ jurisdiction. For example, the court can award temporary compensation to the victims of governmental lawlessness. This contradicts the Anglo-Saxon model of adjudication. The grant of damages in PIL matters does not prevent the aggrieved person from bringing a civil suit for damages. In PIL cases the court can furnish any relief to the victims.

Landmark cases pertaining to PIL

  1. Prem Shukla v. Delhi Administration [11]. In this case, a prisoner sent a letter to the judge of the court, complaining about the forced fetter on him and demanded protection against humiliation. The court considered the PIL petition and orders necessary directions considering the calm rule of locus standi. 
  2. Dr.Upendra Baxi (I) vs. State of Uttar Pradesh & another [12] In this case, two law professors wrote a letter to the court and telling about the inhuman conditions in the Agra Protective Home for Women. The court considered the letter as a PIL and asked to improve the condition of the protective home for women. 
  3. Vishaka vs. State of Rajasthan[13]. In this case, a woman, who was a social worker, was brutally raped while she was in the course of her employment and on behalf of her; an NGO filed a PIL in the Supreme Court for the protection of the rights of women at the workplace. The court accepted the petition and laid down the guidelines to safeguard the interest of women at the workplace and after that Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was enacted based on the guidelines laid down by Supreme Court in this case. 
  4. M.C. Mehta vs. Union of India & Others[14]. In this case, a PIL was filed to prevent and protect the Taj Mahal from the harmful gases and toxic gases released by the industry near the Taj Mahal. The court accepted this petition as it was for the protection of the environment from exploitation and the court ordered to put a Ban on 299 industries from using coal and asked them to change over to Compressed Natural Gas (CNG). 
  5. Hussainara Khatoon vs. State of Bihar[15]. This cause many people regarded as have the first PIL in India as well. In this case, the attention of the Court was on the inhuman condition of under-trials prisoners in the state of Bihar,  who had been in detention pending trial for periods far in superfluity of the maximum sentence for their offences. The Court not only ordered to make the right to a speedy trial regarding the main issue of the case but also passed the order of general release of about 40,000 under-trials who had undergone detention beyond such a time period.

Role of Judiciary 

In India, the Supreme Court makes the lead by allowing volunteer social activists to represent the interests of the poor and weaker sections of the society in judicial proceedings. By fattening the doctrine of locus standi in filing the petition and court introduced epistolary jurisdiction, which means to treat a letter written on behalf of an aggrieved person as a petition and examine the matter of the grievance.

In India judicial activism played a very important role. Generally speaking, when the Court takes up a matter for hearing or adjudication, it must be satisfied that the person who approaches the court has sufficient interest in that matter, It was made so in favour of social cause and the court accepts its validity make to set things right.  Undoubtedly, such litigation has provided each and every citizen of India access to all the courts of the country.

It has developed in a way to democratize the judicial process through radical changes. Moreover, the PIL has contributed to the rise of a form of judicial scrutiny for governmental institutions ranging from hospitals, prisons, covering issues of health, environment, safety, security, privacy and etc.

Judicial activism is a very frequent and common phenomenon for one and a half decades. Its foundation laid down in the year of 1986 by Justice P.N. Bhagwati who bring the tradition of hearing a PIL even on a postcard and telegram. Justice Bhagwati has clearly stated, “The Supreme Court has chosen to take up a proactive and newly conceptualized approach for the last two years, particularly, having regard to the peculiar socio-economic conditions prevailing in the country.

Hindi meaning of Public Interest Litigation

                                            जनहित याचिका 

PIL
Image Source: NPC observer

Conclusion 

This article basically deals with the remedies which are mentioned in our Indian constitution under part III of articles 32. And in this article any person whose legal or fundamental rights violated he/she move to the Supreme Court and High Court for the enforcement of their Right under article 32 and 226 respectively. Both the articles empower the courts to issue the decree of writs.

Writs are formal legal documents bearing the order of the court including the nature of habeas corpus, mandamus, Quo warranto, certiorari, and prohibition. It is circumstantial depending on the facts of the case that which writs will be issued to resolve the problem, however High court has the discretionary power in this regard.

Judicial activism enables more people to access to court through PIL, it is a writ petition filing for the cause of public welfare. Anyone can file PIL as PIL is for the protection of human rights. Judiciary provides an opportunity through PIL to a weaker section or socially backward people to get justice in an inexpensive way, this leads to a democratized country and juristic radical revolution in context to social, political, and economic justice as mentioned in the basic structure of the constitution.

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References

  1. 1951 AIR 270
  2. AIR 193 Sc 280
  3. AIR 1956 Sc 1740
  4. 1976 Ssc 521
  5. 1954
  6. 1976 AIR 1455
  7. 1981
  8. (1997)  10 SSC 549
  9. 1982 AIR 1473
  10.  1987 AIR 579
  11. 1980 AIR 1535
  12.  (1983) 2 SSC 508
  13.  (1997) 6 scc 241 
  14.  https://www.casemine.com/judgement/in/5609ad0ae4b01497114105b5.
  15. https://indiankanoon.org/doc/10671014/

       

 


 

 

 

 

  

                                                                             

                                                                        

 

           

          

 

    

                        

                   

 

 


 

 

                                                                  

 

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Emergency Provisions under Indian Constitution

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This article is written by Shreya S.K Pandey, a student of Law College Dehradun Faculty of Uttaranchal University. She has elaborately discussed the types of emergencies, its effects, grounds, duration, etc. along with the study of emergency provisions and its impact. 

Introduction                                                    

India is a federal country of “its own kind”. It acquires unitary features during an Emergency. Due to this reason, Dr B.R Ambedkar called the Indian Federal system as unique because it becomes entirely unitary during an Emergency. During an Emergency, as Constitutional machinery fails, the system converts itself into a unitary feature. The Emergency is a period of depression where all Fundamental Rights of a person is taken away except article 20 and 21.

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Emergency Definition                                            

An emergency is a situation which arises due to the failure of the government machinery which causes or demands immediate action from the authority. 

According to the Black Law’s Dictionary, “Emergency is a situation which requires quick action and immediate notice as such a situation causes a threat to the life and property in the nation. It is a failure of the social system to deliver reasonable conditions of life” [1]. 

Emergency meaning in Hindi

Emergency in hindi means “ आपातकालीन” or ““Aapaatkaaleen”.

Types of Emergency

Part- XVIII of Indian Constitution deals with the Emergency provisions i.e. Articles 352 to 360. There are three types of Emergencies mentioned in the Constitution. The power of imposing all three types of Emergencies is vested upon the President of India. The concept of Emergency was borrowed from the Weimar Constitution of Germany. The three types are as follows –

  1. Article 352 – National Emergency

  2. Article 356 – President’s Rule

  3. Article 360 – Financial Emergency 

Grounds for the Proclamation of Emergency

National Emergency

Grounds for the proclamation of National Emergency are as follows:

War

When a country declares a formal war against India and there is a violent struggle using armed forces, the President of India may impose National emergency.  

External Aggression

When a country attacks another country without any formal declaration of war. It is a unilateral attack by any country towards India. In such circumstances, the President of India may impose a National emergency.

Armed Rebellion

Emergency due to the armed rebellion may be imposed by the President of India when a group of people rebel against the present government which will lead to the destruction of lives and property.

State Emergency  

Grounds for the Proclamation of the State Emergency is a failure in the Constitutional machinery of the state. In this Emergency, when Governor of the state is satisfied that the State is not functioning in accordance with the Constitutional provisions then he may write his report to the President of India. And the President, if satisfied by the report, may impose the President’s rule. After that, the President will become the executive head of the state.

Financial Emergency

Grounds for the Proclamation of the Financial Emergency is that when a state arises in the Country which leads to a financial crisis in India, the President of India may impose emergency to tackle the situation. In this situation, the Central Authority may reduce the budget or cut the budget given to the State, salaries of the Government officials may be deducted.

Reason for Emergency in India

National Emergency

Article 352 deals with “Proclamation of Emergency” or “ National Emergency”. The President of India has the power to declare an Emergency in India or any part of India by making a Proclamation. Under this Article, if the President is satisfied that a grave emergency exists in India due to which there is a threat to the security of the nation, he may declare Emergency on the grounds of-

  1. War
  2. External Aggression
  3. Armed Rebellion 

The word “Armed Rebellion” was substituted for “Internal Disturbance” by the Forty-fourth Constitution Amendment Act, 1978

National Emergency has been imposed three times in India so far. The time period in which this happened was from 1962-1977. Brief description of the emergencies are as follows –

An emergency was imposed at the time of Indo-China war by the then President of India Dr Sarvepalli Radhakrishnan on the ground of external aggression from October 26, 1962, to January 10, 1968. 

External Aggression means when a country attacks another country without any formal declaration of war. It is a unilateral attack by any country towards another country. For example – If a country attacks India without any formal declaration of war, in such a scenario, the President of India may impose a National Emergency.

Again, an Emergency was imposed from December 3, 1971, to March 21, 1977, by the then President of India Mr V.V. Giri during the Indo-Pakistan war. The reason was the same as above i.e. external aggression.

The third Emergency was imposed due to a clash between Legislature and Judiciary. Mrs Indira Nehru Gandhi, the then Prime Minister of India with the permission of the then President Fakhruddin Ali Ahmed declared an emergency. It was imposed for a period of 19 months from June 25, 1975to March 21, 1977.

State Emergency

Article 356 deals with State Emergency or President’s Rule in the State (“Provisions in case of Failure of Constitutional Machinery in States”). The President of India has the power to proclaim State Emergency when he receives a report from the Governor of that particular State explaining that the situation in the State Government is such that they cannot carry out the Constitutional provisions.

President’s Rule has been imposed on the State of Jammu and Kashmir for six years and 264 days from January 19, 1990, to October 9, 1996. The State has always been a target for many external elements. The Indian Government imposed President’s Rule to control the situation of Jammu & Kashmir which was facing a military threat from Pakistan.

Punjab was under the President’s Rule for 4 years and 259 days from June 11, 1987, to February 25, 1992. The reason for imposing President’s rule in Punjab was the control of Khalistan Commando Forces which was a Sikh organisation which was involved in the genocidal attack on Hindus.

Till January 2016, the President’s Rule has been imposed 124 times in India. During Indira Gandhi’s regime, the President’s Rule was invoked for maximum time. The President’s Rule under her cabinet was imposed 35 times in various states.

The case S.R Bommai v. Union of India[2] is a landmark case in respect of imposing President’s Rule in any State. The case laid down the power of the Union Government in relation to the State Emergency under Article 356 of the Indian Constitution. Judicial Review of the President’s Rule was made possible by this case. While giving the judgement, the court depended on Sarkaria’s Commission Report, 1987.

President’s Rule can be judicially reviewed and the President becomes answerable only when the Emergency is imposed in certain cases, which are:

  1. When there is Constitutional non-conformity by the State with the direction of Union
  2. When there is a political crisis in the State.
  3. When there is an internal subversion in the State
state emergency
Source:https://bit.ly/2OdQUlL

Financial Emergency

Article 360 deals with “Provisions as to Financial Emergency”. Financial Emergency is imposed by the President when there arises any situation which causes a financial threat to India or any part of India.

Financial Emergency has never been imposed in India. However, in 1990, the possibility of financial emergency emerged but the situation was controlled by the Indian Government as in July 1991 the Reserve Bank of India pledged 46.91 tonnes of Gold with Bank of England and Union Bank of Switzerland to raise $400 million.

Emergency Provisions

  1. Article 352: Proclamation of Emergency.
  2. Article 353: Effect of Proclamation of Emergency.
  3. Article 354: Application of provisions relating to the distribution of revenues while a proclamation of emergency is in operation.
  4. Article 355: Duty of the Union to protect States against external aggression and internal disturbance.
  5. Article 356: Provisions in case of failure of constitutional machinery in State.
  6. Article 357: Exercise of legislative powers under Proclamation issued under Article 356.
  7. Article 358: Suspension of provisions of article19 during Emergencies.
  8. Article 359: Suspension of the enforcement of the rights conferred by Part III during emergencies.
  9. Article 360: Provisions as to Financial Emergency.

Article 352

Article 352 (Part XVIII) talks about “Proclamation of Emergency”.  

Clause 1 states that National Emergency may be imposed by the President if he is satisfied that there exists a grave situation due to which there is a threat to the security of India or any part of the territory because of:

  • War
  • External Aggression
  • Armed Rebellion

The proviso of Clause 1 states that an Emergency may be proclaimed by the President even when there is no actual occurrence of war, external aggression, and armed rebellion. In this case, the President must be satisfied that there is an imminent danger. 

Clause 2 states that another Proclamation may be issued to revoke and to make any variation in the previous Proclamation. 

Clause 3 states that the President of India may declare an Emergency when Union Cabinet (Council of Minister headed by the Prime Minister) advice to him in writing. 

Clause 4 states that before issuing Proclamation it is required to be placed before both the Houses of Parliament and shall end its effect at the expiration of one month unless both the Houses of Parliament approve it by resolution before the expiration of the said period. 

Clause 5 states that proclamation approved in the second resolution shall have an effect up to six months and on expiry of six months, it will end to operate unless it is revoked in between the period. 

44th Constitutional (Amendment) Act, 1978

The imposition of Emergency stressed the legislature to think again about the Constitutional provisions that provide power to the executive to supersede the judiciary hampering the basic structure of the Indian Constitution.

Under Article 352, the amendment had substituted the ground of “Internal Disturbance” with “Armed Rebellion”. The President is allowed to impose emergency only when the Union Cabinet communicates to him in writing about their decision.

The Proclamation is required to be approved by both the houses of Parliament by resolution within a month instead of two months by a total majority of the membership of each house of Parliament and by the ratification of not less than 2/3rd members present and voting in each house instead of a simple majority.

Under Article 356, the period for extension of a Proclamation from one month has been amended to six-months. Proclamation in the first instance can only be exceeded for six months.

Case Study

Indira Nehru Gandhi vs. Shri Raj Narain & Anr[3]

Case No:- Appeal (civil) 887 of 1975

Bench:- A.N. Ray J., H.R Khanna J., K.K Mathew J., M.H Beg J. and Y.V Chandrachud J.

Facts

Raj Narain was a contender from Rae Bareilly Constituency in the 5th Lok Sabha Election 1971 against Indira Nehru Gandhi. Congress won the election with a majority in 1971 and Mrs Gandhi took the oath as a new Prime Minister of India. After the result of elections, Raj Narain approached the Allahabad High Court and filed a petition against Indira Nehru Gandhi contending that she had performed her election using corrupt practices.

Allahabad High Court observed in the case Raj Narain v. State of Uttar Pradesh[4] that Indira Gandhi was guilty, as she misuses Government machinery under section 123(7) of Representation of Peoples Act, 1951. Indira Gandhi was barred to contest elections for six years and she was forbidden to continue as a Prime Minister of India. 

Further, the court observed that “Rules of evidence that prevent disclosure of certain government documents in court proceedings may be overridden if the public interest in disclosure outweighs the public interest in keeping documents secret”[5].

The judgement led in a declaration of National Emergency under Article 352 by the then President of India Fakhrudeen A. Ahmad. The reason given for imposing an emergency was “Internal Disturbance”.

Raj Narain’s case was on conditional stay up to their appearance in the Supreme Court on August 11, 1975. However, on August 10, 1975, Thirty-Ninth Constitutional (Amendment) Act, 1971 was done and it inserted Article 329A which bar the Supreme Court to entertain the matter. Further on one can question the election of Prime Minister, President, Vice- President and the Speaker of Lok Sabha.    

Issues 

Whether the 39th Constitutional (Amendment) Act, 1971 was Constitutionally valid?

Judgment

Referring to the landmark judgment of Kesavananda Bharati v. State of Kerala[5] for the first time the Supreme Court observed that Clause 4 of Article 329A is violative and unconstitutional. It violates the principle of separation of power as it provides functions of the judiciary to the legislature. The amendment violated the “Rule of Law”.

The Apex Court finds the 39th Constitutional Amendment Act, 1971 as violative of the basic structure of the India Constitution and unconstitutional and therefore declares it as void.

Effects of National Emergency

Under Article 358, National Emergency suspends the rights guaranteed under Article 19 of the Indian Constitution. Also, other Fundamental Rights get suspended under Article 359 except Article 20 and 21.

Article 20 of the Indian Constitution deals with the “Protection in respect of conviction from offences”. This Article is pillars of all the Fundamental Rights which are guaranteed by the Indian Constitution. It protects the right of an individual in case of conviction.

Article 21 of the Indian Constitution deals with “Protection of life and personal liberty” because no person shall be deprived of his life and personal liberty except procedure established by law.

Under this kind of Emergency, the State Government comes under the direct control of the Central Government. The State Government has to work as per the direction is given by the Union.

The distribution of financial resources between the Union and the State may be suspended by the President.

The Parliament acquires power over the subjects of the State List which ceases on the expiry of six months.

Article 356

Part XVIII, Article 356 talks about “Provision in case of failure of constitutional machinery in states” or “President’s Rule”.

The State Emergency or President’s Rule is imposed by the President of India when the  Constitutional machinery of State collapse and is unable to carry in accordance with the Indian Constitution. The President will impose an emergency when he will get a report of such a situation from the Governor of that particular state.

The Governor will report about the situation in the State that the government is unable to carry out in accordance to the provisions of the Constitution and the Emergency imposed upon such a report shall have an effect up to six months, after the expiry of which Emergency will end to have an effect on the State.

The maximum period for the State Emergency is three years after which it can be extended after a Constitutional amendment. It requires constant approval from the Parliament every six months.

Imposing of the State Emergency continuously became arbitrary in India. In the landmark judgment of State of Rajasthan & Ors v. Union of India[7],  the Supreme Court observed that Courts have no power to review the Proclamation passed under Article 352. Imposing the State emergency continuously becomes arbitrary in India due to this reason and, hence, the Supreme Court finds it necessary to overturn the decision.

In the case, S. R. Bommai V. Union of India[2]the Supreme Court observed that, under Article 356, President of India has restricted power and they are subjected to judicial review. The Supreme Court has the power to declare the emergency void even if both the houses of Parliament passed the Proclamation.

Effects of State Emergency

During the State Emergency or President’s Rule, the entire State administrative machinery is transferred to the Union. President becomes executive head of the State and Governor works under his name. 

Legislative Assembly of the state may be dissolved or it may be suspended. Parliament took over the charge of making laws in the 66 subjects of the List-II i.e. State List. All the ministers of State Legislative assembly were barred from performing any action as every money bill is required to be first referred to the Parliament for approval.

State’s High Court functions independently in such a situation. There is no effect of an emergency in the State Judiciary. High Court may even entertain the petition filed against the President’s Rule. In 2016, the Congress Government approached the Nainital High Court against the President’s Rule imposed under Narendra Modi’s regime.

It was imposed by the then President of India Pranab Mukherjee. The High Court of Uttarakhand gave its verdict in favour of Harish Rawat’s government and declared to restore the Congress Government in the State of Uttarakhand. Later, the judgement was upheld by the Supreme Court of India and the Congress Government continued its period of governance.

How many times State Emergency declared in India 

 There are different circumstances under which the President’s Rule is imposed, these are:-

national emergency
Image Source: https://bit.ly/2Y9GpQb
  1. When the coalition government in the State collapses. 
  2. Law and orders are not followed in the State.
  3. Failure to elect Chief Minister by the State Legislature. 
  4. Postponement of the State Elections due to any reasons.

In India, till 2018, the President’s Rule was imposed 126 times by the President of India. Maximum times the President’s Rule was invoked during Indira Gandhi regime i.e. 35 times.

Difference between the National Emergency and President’s Rule                        

 

National Emergency (Article 352)

       

President’s Rule (Article 356) 

     

National Emergency is proclaimed under Article 352 on the ground of war, external aggression and armed rebellion.

State Emergency is proclaimed under Article  356 when the State Government cannot be carried out according to the Constitutional provisions.

State Executive and legislature perform their power as mentioned in List II of Schedule VII. Concurrent List power vests in the Central Government. 

State Executive powers get vested in the Central. Governor works in the state on the advice of the President. State Legislative Assembly is dissolved or suspended.

The Proclamation may be continued for an indefinite time as no maximum period is prescribed but it is subject to renew every six months.

The maximum period up to which State Emergency may continue is three years after which it will cease but it may be further continued after the Constitutional Amendment.

Fundamental Rights are suspended during National Emergency except Article 20 & 21.

There was no effect on the Fundamental Rights of the people of the State.

Resolution for the continuation of the proclamation of emergency must be passed with a special majority.

Resolution can be passed with a simple majority in the Parliament.

The resolution for the revocation of the proclamation can be passed by Lok  Sabha.

Resolution for revocation of the proclamation can be passed by President in his discretion.

During this emergency, the Centre’s relation undergoes a modification with all the States.

Centre’s relation undergoes a modification only with the state under the President’s Rule.

There is no delegation of lawmaking power of Parliament under the State list.

President may make laws for the state after consulting with the Members of Parliament from that state.

Article 360

Part XIII, Article 360 talks about “ Financial Emergency”.

Financial Emergency is proclaimed by the President of India if he is satisfied that a situation of financial instability has arisen in the nation or any part of the nation. Emergency imposed under Article 360 shall not have effect after the expiration of two months from the date it was issued unless both the Houses of Parliament approves it by passing a resolution.

The situation of 1991 led to the circumstances of the financial crisis. But it was solved after introducing New Economic Policy by Economist Dr Manmohan Singh. No financial emergency was imposed so far in India.

Effects of Financial Emergency

During the Financial Emergency, Parliament has the power to reduce the salaries and allowances of the people working under the Union or the State Government. Financial and Money Bills passed by the State Legislature of the State will be sent to the President of India for his consideration.

Parliamentary approval and duration of the Emergency

In India, there are three types of Emergencies and all the three emergencies have a different duration up to which they remain in force. Parliamentary approval also differs in each emergency as the duration for approval of a resolution of emergency is different in each kind of emergency. The Parliamentary procedure for passing the resolution of Emergency is discussed as follows:

Parliamentary approval and duration of the National Emergency

Proclamation of National Emergency operates for the maximum period of six months subject to approval in every six months. There is no period prescribed up to which period may be extended. 

Under Article 352, when the President imposes an Emergency, it must be approved by both the Houses of Parliament by a resolution within a month from the date of its issue. Before the 44th Amendment Act, 1978, the period for approval was two months.

Meanwhile, Lok Sabha gets dissolved when the Proclamation was issued or Lok Sabha dissolved without approving the proclamation of Emergency, one month will be counted from the first day of sitting of the Lower House i.e. Lok Sabha after its reconstitution. It is required that in the meantime Rajya Sabha has approved the proclamation.

When both the houses of Parliament approve the proclamation, it will remain in force for six months and there is no maximum time limit for Proclamation. It is subjected to renew by both the Houses of Parliament through resolution in every six months.

If Lok Sabha gets dissolved within six months from the date of issue of the resolution without further approving the Proclamation of Emergency. In this situation, the Proclamation will survive until a month from the first day of Lok Sabha after its reconstitution. It is required that in the meantime Rajya Sabha has approved the Proclamation.

Every resolution for imposing Emergency or continuance of Emergency must be passed by either of the House of Parliament by a special majority, i.e. a majority of the total membership of that house and a majority of not less than 2/3rd members of the house present and voting.

Parliamentary approval and duration of the State Emergency

Proclamation of the State Emergency operates for the maximum period of six months or three years (subject to extension of the period).

Under Article 356, when the President imposes Emergency it must be approved by both the Houses of the Parliament by resolution within two months from the date of its issue after which it ceases to affect.

If Lok Sabha gets dissolved when a proclamation was issued, then it must be passed within 30 days from the first day of sitting of Lok Sabha after its reconstitution. In such situations, Rajya Sabha must approve the Proclamation.

The duration of six months can be extended, subject to the approval in six months. But every Proclamation passed under this Article cannot be extended for more than three years.

Parliamentary approval and duration of the Financial Emergency

Under Article 360, before the President imposes emergency it shall be approved by both Houses of Parliament. Otherwise, after the expiry of two months, from the date of issuance of the proclamation, it ceases to operate.

In case, Lok Sabha dissolves within two months, Lower House is required to approve the proclamation within thirty days from the first day of sitting after its reconstitution. Rajya Sabha must approve it in the meantime.

Why was Emergency declared in 1975

Background

National Emergency has been imposed three times in India. But, the Emergency of 1975 emerged as the Constitutional revolution in Indian history. The emergency of 1975 emerges as the dark phase for the Indian Constitution. The situation which leads to the Proclamation of Emergency was the fifth Lok Sabha election in 1971 in which Indira Gandhi won the election with a majority. Her opponent contender from Rai Bareilly was Raj Narain who approached the Allahabad High Court by filing a petition against Indira Gandhi’s election.

Allahabad High Court’s judgement was not acceptable to the Indira Gandhi who declared the decision against her. They barred her from contesting election for the next six years and the Court also barred her to continue the post of Prime Minister. To secure her post, Indira Gandhi came up with a strategy that shook the nation and questioned the democracy of India.

The President of India Fakhruddin Ali Ahmed imposed National emergency on June 28, 1975, a day before hearing of the case of Raj Narain v. State of Uttar Pradesh[4] in the Supreme Court as an appeal. The reason behind the Proclamation of the Emergency was “Internal Disturbance”. This Emergency was imposed when the emergency of 1971 due to the Indo-China war was already in force in India.

The situation was becoming out of control, the Prime Minister of India was barred to contest election for the next six years and her present post was declared to be occupied using ill corrupt practices. Military and Police started disobeying the orders of the Government.

Union Railway Minister L.N. Mishra was murdered at Samastipur. A tussle between the central, opposition, and the citizens created an environment of violence, threat and agitation. The Parliament approved the Proclamation of Emergency and subsequently, National Emergency was imposed in India.

1975 Emergency Reason

  1. Allahabad High Court gave judgement against the Prime Minister. Judgement barred her to contest election for the next six years and finds her involvement in ill corrupt practices in 5th Lok Sabha election of 1971.
  2. The demonstration was organised by the opposition under the supervision of Jayaprakash Narayan.
  3. The relationship between the Judiciary and Legislative become weak as Parliament’s amendment of the Fundamental Rights was opposed by the Supreme Court.
  4. An agitation that was launched in Gujarat in 1974 by the opposition party.

Consequences 

  1. Freedom of the Press was suspended and Indian Raj Censorship was imposed under which newspapers get prior approval for publication.
  2. Fundamental Rights of the citizens were suspended.
  3. Opposition leaders were arrested and strikes were banned.
  4. Under 42nd Constitutional (Amendment) Act, 1976, Elections of the Prime Minister, the President, and the Vice-President was kept out of the purview of justification from the court.
  5. Provision of Habeas Corpus was neglected nullifying the rights of citizens under Article 21.

Effects

  1. It led to the political crisis and Constitutional crises on the Indian polity.
  2. Many new political parties emerged after 1977.
  3. Emergency showed its impact on 1977 Lok Sabha election as Janta Party won the election.
  4. Fundamental Rights of the citizens were strengthened.
  5. The 44th Constitutional (Amendment) Act, 1978, was passed to clear the ambiguity of provisions of emergency.

To sum up, everything that has been stated, the 1975 Emergency emerges as the dark side of the Indian Judiciary. The emergency of 1975 was not less than a dark age of the Indian democracy because during this period India emerged as a weak democratic country. It affected the federal structure of democracy. It left the legislature to think about the provisions of the Constitution.

The Indian Constitution was continuously amending to favour one’s situation. Later, it becomes necessary to amend the Constitution again, but this time to maintain its supremacy.

In Kesavananda Bharati v. State of Kerala[5], the Supreme Court observed that “Parliament does not possess any power under Article 368 to amend the basic structure of the Constitution. Parliament has the power to amend the entire Constitution whenever it becomes necessary according to the requirement subject to, they cannot touch the Fundamental Rights which are the basic structure of the Constitution”.

List of National Emergencies

National Emergency was invoked three times from 1962 to 1977.

First National Emergency was invoked in October 1962 during Indo-China war. This Emergency remained in force till January 1968. It was imposed by the then President of India Shri. Sarvepalli Radhakrishnan. The reason for imposing this emergency was the Chinese attack in Arunachal Pradesh (North-East Frontier Agency). External Aggression was ground for invoking the Emergency.

The second Emergency was invoked in December 1971 during the Indo-Pak war. This Emergency remained in force till March 1977. This Emergency was imposed by the then President of India Mr V.V. Giri. The reason for imposing Emergency was war in Bangladesh. Ground for imposing this Emergency was External Aggression, the Indian military was clashing with the military of Pakistan to provide independence to East Pakistan.

The period of the war was 11 days and considered as the shortest war in the World. But, in the meantime, the third emergency was imposed in India. The third emergency continued the second emergency until 1977.

The third Emergency was invoked in June 1975 due to an internal disturbance in the Central Government. It remained in force till March 1977. This Emergency was imposed by the then President of India Fakhruddin Ai Ahmed. It was imposed when the second Emergency was already in existence. The real cause behind this Emergency was to secure the seat of the then Prime Minister of India Mrs Indira Nehru Gandhi who was found guilty in corrupt practices during her constituency campaign by the Allahabad High Court.

Impact of Emergency in India

Most of the time Emergency have an adverse impact on the country. Whenever an Emergency was imposed, whether it was the National Emergency or State emergency, it has questioned the democracy of India. More time it was imposed, more democracy shows its unitary structure. Impact of Emergency in India is:-

  1. It deprives the citizens of their Fundamental Right.
  2. The Freedom of Media was suspended.
  3. Emergency overturned the Constitution.
  4. Censorship orders barred newspapers to print anything without any prior consent from the government.

National Emergency of 1975 resulted in the arrest of many opposition leaders such as Morarji Desai, Jay Prakash Narayan, Atal Bihari Vajpayee and Lal Krishna Advani under Maintenance of Internal Security Act, 1971. The arrest of these leaders led to the filing of petitions in various High Courts challenging the detention. Indira Gandhi Government approached the Supreme Court because at the time of Emergency Fundamental Right under Article 21 remained suspended so this does not allow the writ of Habeas Corpus and the case came out to be known as the Habeas Corpus case. 

A.D.M Jabalpur Case[11]

Background

After defeat in the Lok Sabha election of 1971, Raj Narain challenged the election in the Allahabad High Court on the ground that she was guilty of corruption from her constituency. In the case of Raj Narain v. State of Uttar Pradesh[4], Allahabad High Court found Indira Gandhi’s involvement in corrupt practices and declared her election invalid. Indira Gandhi approached the Supreme Court where Justice Krishna Iyer put a conditional stay on Allahabad judgement. On a day before hearing of the case in the Supreme Court, President Fakhruddin Ali Ahmed declared Emergency on the ground of “Internal Disturbance”.

During the Emergency, Fundamental Rights remained suspended under Article 14 and 21, as well as any proceedings related to the enforcement of these Articles also remained suspended during the period of Emergency. Anyone who was causing a threat to the politics was arrested under Preventive Detention Law. Many famous political leaders were arrested under the Maintenance of Internal Security Act, 1971 (MISA) because their activities were causing a political threat to Indira Gandhi.

These leaders approached the High Court against the arrest and the High Court made a decision in their favour. Indira Gandhi’s Government filed a petition in the Supreme Court as a Fundamental Right under Article 21 is suspended writ cannot be issued.

Issues

  1. Whether writ of Habeas Corpus is maintainable by the High Court questioning illegal detention when an emergency was imposed by the President?
  2. Whether suspension of Rights and Liberty of any person under Article 21 is valid under Rule of Law?
  3. Whether detenue have locus standi during the proclamation of emergency?

Judgement

Supreme Court observed that under Article 359 clause (1) no person has locus standi to approach the High Court under Article 226 to enforce his fundamental right of personal liberty in case of detention by filing a writ of habeas corpus. Fundamental Rights remain suspended during the Emergency. A person cannot invoke habeas corpus by filing an application under Section 491 of the Code of Criminal Procedure, 1973. Supreme Court declared Section 16A (9) of Maintenance of Internal Security as constitutionally valid.

Conclusion

Emergencies in India are imposed by the President after both the House of Parliament passed the resolution of the Proclamation of Emergency. Where the State Emergency or President’s Rule is quite frequently used by the President, National Emergency had become a part of history.

The national emergency of 1975 shows the weaker or dark phase of the Judiciary. Cases like Indira Gandhi v. Raj Narain and A.D.M Jabalpur v. Shiv Kant Shukla show loophole in the judicial system. Both cases do not recognize the Fundamental Rights of citizens during emergencies. There was a need to change the mechanism and it was done in Kesavananda Bharati’s case.

References

  1. Black Law’s Dictionary, https://thelawdictionary.org/emergency
  2. S.R Bommai v. Union of India, AIR 1994 SC 1918
  3. Indira Nehru Gandhi vs. Shri Raj Narain & Anr., AIR 1975 SC 2299
  4. Raj Narain v. State of Uttar Pradesh, AIR 1975 SC 865
  5. Kesavananda Bharati v. State of Kerala, AIR 1973 SC 1461
  6. State of Rajasthan & Ors v. Union of India, AIR 1977 SC 1361
  7. A.D.M Jabalpur v. Shiv Kant Shukla, AIR 1976 SC1207

 

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One Person Company – A Complete Analysis

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This article has been written by Namrata Kandankovi, student of Symbiosis Law School, Pune. The author of this article has written about the inception and evolution of One Person Company, its historical background, salient features of such a company and the advantages and disadvantages of the same.

Inception and Evolution of One Person Company

The unique concept of One Person Company came into being by the way of The Companies Act, 2013. The very first recommendation of the One Company Person was put forth by the expert committee which was headed by Dr JJ Irani in the year 2005. One person Company is being praised on a larger scale, as it provides a new range of opportunities to the ones looking forward to starting their own ventures with the structure of an organised business. One Person Company (OPC) has proved to be of great advantage to the young businessmen as it provides them all the benefits including that of access to bank loans, access to market, legal protection of business, access to credits and all this, in turn, comes in the name of a separate entity. Considering all the above-mentioned points, it can be said that, when thought in a broader perspective, one person company proves to be of great advantage to a number of budding new businessmen in the corporate world.

Taking into consideration the concept of India, it can be said that One Person Company is a comparatively new concept in the Indian scenario, while on the other hand, it has been proved as a successful business strategy in the UK and in addition to this even a number of European countries have succeeded in terms of formation and working of the One Company Person for quite a long period of time.

Historical background

According to The Companies Act, 1956, there is a requirement of at least 7 members for the formation of a Public Limited Company, and in terms of shareholders it requires 2 of the shareholders to be present in order to validate the company, and hence because of this very provision, there was no formation of One Person Company in the country of India. It was only under the Companies Act of 2013, Section 2(62), that there was a provision laid down for the formation and bringing into effect the One Person Company. The very meaning of One Person Company means a company which consists of only 1 member. Another important point to be taken under consideration is that Section 3 of the Companies Act classifies One person Company as a private limited company for the sake of all the legal purposes but with only one person in the company. In addition to this, all the provisions related to a private limited company is applicable to an OPC, unless they are expressly excluded by an independent clause.

Salient features of one Person Company

The concept of One Person Company has been defined under sub-section 62 of section 2 of the Companies Act, 2013. The particular section reads one person company as follows- ‘One Person Company means a company which has only one person in it’. Another significant point to be taken under consideration is that there can be no formation of more than 5 One Person Companies (OPC) by 1 person.

The important features of a One Person Company are listed as under:

  • One Director– Every One Person Company must compulsorily require having one director and not more than that under any clause.
  • One Shareholder– Every One Person Company is required to have only one shareholder, but at that same time there exists a provision for the appointment of at least 15 shareholders and this comes under the special clauses which are to be incorporated while doing the same.
  • Nominee for the Shareholder– Every One Person Company requires having one person who would further nominate a shareholder, and this nomination would take place in accordance with the memorandum. The person whose name has been stated in the memorandum would tend to be a member of the company in the event of either death or incapability of the member of the One Person Company.

Who is eligible to form a one-person company?

The eligibility criteria for the creation of One Person Company requires the person to be a ‘natural person’ who is an Indian resident, and by the term Indian resident, it requires the person to have been staying in India for a period of not less than one hundred and eighty-two days. Such a person would be eligible for the incorporation of the One Person Company and also a nominee for the sole member of the One Person Company.

1) A-One Person Company can be formed under any of the categories mentioned below:

  • A Company limited by guarantee.
  • A Company which is limited by shares.

2) A-One Person Company, which is limited by shares shall comply with the following essentials:

  • Shall have to be paid up to a sum of 1 lakh.
  • Where there are restrictions to rights to transfer the shares.
  • Where there are prohibitions placed on an invitation to the public to subscribe to the securities of the companies.
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How can a One Person Company be formed?

It is Section 3(1) (c) of the Companies Act, which provides for the incorporation of the One Person Company. It further includes under its ambit that the company must have been formed by a lawful purpose, by one person. In addition to this, the members of the company are required to submit their names to the memorandum of the company, which would include the name of the one other person and this should be done with the prior consent of that person in the written form. The significance of the presence of one other person in the One Person Company is that, such a person would become the acting member of that company in the event of the incapacity or death of the subscriber of the company.

Such a person’s consent is required to be given in writing and there is an additional prerequisite of the consent to be filed with the registrar at the time of the incorporation of the company and this should be done along with the articles of association and the memorandum. When it comes to withdrawal of the consent of such a person, the same can be done through a manner prescribed by the said section under the Companies Act.

Conversion of One Person Company into a Private Limited Company

The conversion of the One Person Company to a Private Limited Company can take place under the following circumstances- Whenever the paid-up share capital of the one person company exceeds fifty lakh rupees or on the other hand, if the average annual turnover of the company exceeds two crore rupees during the relevant period of time, then under such cases the company ceases to be continued as a One Person Company. Eventually, such a company would be required to convert itself into a private limited company.

In contrary to the above, a private company registered itself under section 8 of the Companies Act having been paid a share capital of fifty lakh rupees or less or on the other hand if the average turnover of the company is turning out to be less than two crores in the relevant period, then such a company is under an obligation to convert into a one-person company by passing a special resolution which should be at the general meeting.

Advantages of One Person Company

One of the significant questions to be undertaken while dealing with the concept of one person Company is that- why would a person prefer a company to a proprietorship? Providing an answer to this question it can be said that the very rationale behind the One Person Company is to provide all the benefits of the incorporation while functioning as a sole proprietor at the same time. The advantages of the One Person Company can be listed as under:

  • Legal Identity– One Person Company is known to have a separate legal identity from that of its shareholders, which means the company and the shareholders act as two different identities in all possible cases.
  • Sole Decision Maker– In the One Person Company there exists only decision-marker. Hence, no shareholder meeting consensus or majority opinions are taken into consideration, while the only member shareholder meeting is held once every 6 months at a gap of at least 90 days between two meetings. The sole idea which the One Person Company tries to uphold is the personal commitment to the business.
  • Independent Corporate Existence– The added advantage which the One Person Company has is the separate independent identity from that of its director shareholders and director. This very principle came into existence from the landmark case of Salomon v. Salomon and Co. Ltd. In this case, it was held that the Company forms a distinct legal personality from that of its members and hence, a company should be treated as a person in law.

In another landmark case of T.R. Pratt v. E.D. Sassoon & Co. Ltd, the Bombay High Court while delivering the judgment came out with the verdict that ‘the incorporated company is a separate and different entity under the law, although it is possible that the entire share should be controlled by one person, the company should be identified as a distinct personality’.

  • Limited Liability– One Person Company tends to limit the liability of Entrepreneurship as the company has its own identity. Limited Liability is considered to be the most prized advantage possessed by the One Person Company. President Eliot of Harvard once considered the limited liability of One Person Company as the most precious characteristic of the company, and it was in turn regarded that the members come and go but the company continue to remain as a separate legal entity.

Deficiencies of One person Company

The very idea behind the inception of the One Person Company was to promote and boost the economic growth of the country, by the way, promoting entrepreneurship, in contrary, only a naturally born Indian, who is also an Indian resident could start a One Person Company. In one way this step tries to encourage small entrepreneurship and on the other hand, it discourages foreign direct investment by the way of disallowing foreign companies. The two most significant disadvantages of one Person Company have been listed below:

  • Investment- As the territory of the One Person Company is new and comparatively untested investors may wary from investing in the company and this acts as a major disadvantage.
  • Taxation- The One Person Company is taxed both on income as well as the distribution of profits, and this is seen as a major disadvantage which does not act in favour of the One Person Company. The One Person Company is hence, said not to enjoy any tax benefits but, on the contrary, the tax acts as a burden on the part of the company.

Conclusion

This article has included under its ambit the complete analysis of the One Person Company, which has covered numerous aspects of the One Person Company which are of paramount importance in order to be understood by the readers. The procedural requirements for the functioning of the company are fewer in number as there are numerous exemptions provided under the said sections of the act. In the end it can be concluded that, the One Person Company has its own benefits as having been listed under and at the same time there exist various disadvantages as well and with the evolution of time the disadvantages can be curbed and the One Person Company can be made more effective and advantageous so that it can serve its purpose better.

References

Cases

1) Salomon v A Salomon and Co Ltd [1897] AC 22.

2) T.R. Pratt (Bombay) Ltd. vs E.D. Sassoon And Co. Ltd. And Anr. on 18 September 1935, AIR 1936 Bom 62.

Online Sources

  1. Dheeraj Verma, One person company, Legal Services India (August 28, 2017) http://www.legalservicesindia.com/article/2407/One-person-company.html.
  2. Sabarnee Chaterjee, One person Company and its limited liability, Corporate Law Reporter (March 25, 2014) http://corporatelawreporter.com/2014/03/25/one-person-company-limited-liability/.  
  3. Swasti Gupta, Can a Company be the one-person in a One Person Company?, Ipleaders (June 21, 2018) https://blog.ipleaders.in/one-person-company-ten-legal-provisions-must-know/.
  4. Vatsala Singh, One Person Company- A Concept For New Age Business Ownership, Singh and Associates (28 November 2013) 

 

 

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Criminal Law Amendment Act, 2018

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This article is written by Akash R. Goswami of the faculty of law, Aligarh Muslim University. In this article, he has discussed what exactly the amendments made by the Government Of India in pursuance for the protection of women. 

Introduction

The world is dynamic, changes occur according to the needs of the society and just as the general population who possessed a spot in that society. For example, during the 18th century, there was hardly any law to govern cyber crimes but due to technological advancements, dynamic features the Cyber Law developed rudimentarily. Therefore a sudden increase in the rate of crime regarding cyber threats, ransomware, and other cyber offences made us realize that there should be a law to deal with these advanced crimes. Similarly, Criminal Law Amendment Bill 2018 provides to amend relevant sections of IPC, Cr.P.C. and POCSO Act and also enhanced the minimum sentence for the offence of rape including the age part.

Need for Criminal Amendment Act, 2018

A report by the “Thomson Reuters Foundation” ranked India as the most dangerous country for women due to sexual violence, human trafficking, child labour, child marriage, and female foeticide. According to the National Record Crime Bureau (NRCB) in its annual report of year 2013 states that approx 24,923 rape cases were reported across India in 2012. And in 98% cases, the accused was found to be a relative of the victim.The per capita rate of assault is most minimal, as a rule of assault, goes unreported. But rape cases like Kathua rape case and the Unnao rape case incidents triggered and widespread hatred in public. And feeling of condemnation results in media attention, and public protest demonstrated for the sake of justice. this increases the willingness to report the rape cases, and this led the government of India to bring some changes in the existing penal laws. Hence, there was an indispensable need for this Criminal Amendment Act.

Criminal Law Amendment Act, 2018

The Ministry of law and justice introduced the criminal law amendment bill 2018 in Lok Sabha on July 23, 2018, and the same was passed on 30 July and 6 August by Lok Sabha and Rajya Sabha respectively. This bill aims to provide grievances to the victim, who has been sexually assaulted and ensure the death penalty for those who, convicted for raping a girl below 16 or 12 years. It replaced the ordinance promulgated by the President of India in April and also did relevant amendments in:

  1. IPC 1860
  2. Cr.PC 1973
  3. Evidence act 1872 
  4. Protection of Child from Sexual Offences (POCSO) 2012

Salient Features Of Criminal Law Amendment Act, 2018

This Act brings relevant changes for the protection of a girl form the heinous crime of rape in our penal laws. They are as follows:

  • Anyone who commits the offence of rape shall be punished for the minimum period 10 years earlier it was for 7 years.
  • If any person rapes a girl, who is below 16 years of age, shall be punished for a minimum period of 20 years.
  • If a person rapes a girl, who is below the age of 12 years, shall be deemed to punished rigorous imprisonment for 20 years or imprisonment for life or maybe liable for the death penalty.
  • In case if the offence of rape, is committed with the girl age below 16 years, the anticipatory bail will not be granted to the accused.
  • Convicted persons bound to compensate the victim, and such compensation will be used for the victim’s medical expenses and for rehabilitation. And the compensation will be just and reasonable.
  • If the offence of rape, is committed by the Police Officer, irrespective of the place shall be punished for rigorous imprisonment which is not less then 10 years. 
  • In the matter of rape, the police are under compulsion to complete the Investigation within the period of 2 months after the FIR lodged.
  • The offence of rape, time to disposed the appeal starts after 6 months.
  • Act provides to punish accused convicted of gang rape of woman below 16 years of age shall be given rigorous imprisonment for life and liable for fine.
  • The Act also provides to punish accused convicted of the gang rape of women, who is below the age of 12 years shall be given rigorous imprisonment for life and with fine or with the death penalty.

Amendments In Indian Penal Code

Criminal amendment act 2018 inserts three new sections in IPC-

  • 376AB
  • 376DA
  • 376DB

And amend three sections of IPC-

  • 166A
  • 228A
  • 376

Inserted Sections

376AB

This section was inserted just after Section 376A and provides that whoever commits rape with a woman, who is under 12 years of age shall be punished with rigorous imprisonment for a term which shall not be less than 20 years, and it may extend to life imprisonment which impliedly intends to introspect what he had been done is thoroughly illegal and off-base, or in legal sense, reminder for that person natural life, and with fine or death penalty. And also liable to pay compensation and such compensation shall be reasonable and just, to meet the medical expenses and for victim rehabilitation.

Additionally, commands that any payment by the denounced under this section will be paid to the person in question (victim).

376DA

After Section 370D, 376DA section inserted and states that when a woman under the age of sixteen years raped by one or more person constituting a group or done some action for the pursuance of common intention, each of that person deemed to commit the offence of rape and shall be punished with imprisonment for life which shall impliedly intends to introspect what he had been done is thoroughly illegal and off-base, or in legal sense, reminder for that person natural life, and with fine or death penalty. And also liable to pay compensation and such compensation shall be reasonable and just, to meet the medical expenses and for victim rehabilitation.

Additionally, commands that any payment by the denounced under this section will be paid to the person in question (victim).

376DB

This section states that where a woman who, is below the age of 12 years is raped by one or more person constituting a group or action for the pursuance of common intention, each person shall be deemed to commit the offence of rape, and punished with life imprisonment which impliedly intends to introspect what he had been done is thoroughly illegal and off-base, or in legal sense, reminder for that person natural life, and with fine or death penalty. And also liable to pay compensation and such compensation shall be reasonable and just, to meet the medical expenses and for victim rehabilitation.

Additionally, commands that any payment by the denounced under this section will be paid to the person in question (victim).

Amended Sections

166A

This section deals with public servant disobeying directions under the law, and has three clauses. 

And clause ( c ), is substituted with section 376AB, 376B, 376C, 376D, 376DA and 376DB.

228A

This section deals with disclosure of the identity of the victim of certain offences, and sub section 1 of this section was substituted with Section 376AB, 376B, 376C, 376D, 376DA, and 376DB.

376

This section deals with the punishment for rape and under this section, the sub-section 1 was substituted as “whosoever commits an offence of rape shall be punished for the term not less than 10 years or which may extend to life imprisonment and with fine”.

And by this amendment in section 376, sub-section 2 clause (a) sub-section 1 has been repealed.

After sub-section 2 of section 376, new sub-section inserted namely “3” which provides that whoever commits the offence of rape with a woman, who is under the age of sixteen years shall be punished with rigorous imprisonment for a term not less then 20 years, and shall extend to imprisonment for life which impliedly intends to introspect what he had been done is thoroughly illegal and off-base, or in legal sense, reminder for that person natural life, and with fine or death penalty. And also liable to pay compensation and such compensation shall be reasonable and just, to meet the medical expenses and for victim rehabilitation.

Additionally, commands that any payment by the denounced under this section will be paid to the person in question (victim). 

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The Criminal Amendment Act, 2018 amends two sections of the Indian Evidence Act, 1872

  • 53A
  • Provision of Section 146

53A

This section deals with the evidence of character or previous sexual experience not relevant in certain cases substituted with Sections 376AB, 376B, 376C, 376D, 376DA, and 376DB.

146

This section deals with questions lawful in cross-examination (what are the questions must be asked by the Police Officer) when a witness is cross-examined, he may in addition to the question hereinbefore referred to, be asked any question which tends-

  1. Tend to test the veracity.
  2. To discover who he is and what is his position in life. 
  3. To sake his credit, by injuring his character, although the answer might tend directly or indirectly to criminate him, might expose him to a penalty or forfeiture.

Provision 3 or this section were substituted with section, 376AB, 376B, 376C, 376D, 376DA and 376DB.

Amendment in Code of Criminal Procedure

By the Criminal Amendment Act, 2018 following sections of Cr.PC has been amended these are:

  • Section 173
  • Section374
  • Section 377
  • Section 438
  • Section 439

Section 173

In this section there is an amendment in sub-section (1A) which provides that rape of a child may be completed within 3 months, this sub-section was substituted with “an offence under section 376AB, 376B, 376C, 376D, 376DA, and 376DB or section 376E of the Indian penal code shall be completed within 2 months”.

Section 374

In section 374 of Cr.PC, after sub-section (3), the following sub-section inserted i.e, sub-section (4) and read as when an appeal has been filed against a sentence passed under Section 376, 376A, 376AB, 376B, 376C, 376D, 376DA, and 376DB or Section 376E of the Indian penal code the appeal shall be disposed within period of 6 months from the date of filing of such appeal.

Section 377

In Section 377 of the code of criminal procedure, after sub-section (2), new sub-section was inserted i.e. sub-section (3) and read as when an appeal has been filed against a sentence passed under section 376, 376A, 376AB, 376B, 376C, 376D, 376DA, and 376DB or section 376E of the Indian penal code the appeal shall be disposed off within a period of 6 months from the date of filing the appeal.

Section 438

In Section 438 of the Code of Criminal Procedure, after sub-section (3), new sub-section inserted i.e. sub-section (4) and provides that nothing in this section shall apply to any case involving the arrest of a person on accusation of having committed an offence under sub-section (3) of Section 376, 376AB, 376DA, 376DB of the Indian penal code.

Section 439

In Section 439 of CrPC, after sub-section (a), (1) provision, another provision was added and says that “the high court and the session court shall, before granting bail to a person who is accused of an offence triable under sub-section (3) of Sections 376, 376AB, 376DA, 376DB, give notice of the applicant for the bail to the public prosecutor within a period of 15 days from the date of receipt of such notice.

And after sub-section (1) of Cr.PC following sub-section was inserted i.e. (1A) which provides that the presence of the informant or any person authorized by him, shall be obligatory at the time of hearing of the application for bail to the person under sub-section (3) of sections 376, 376A, 376DA, 376DB.

Protection of children from sexual offences (POCSO) Act, 2012

By the Criminal Amendment Act, 2018 there is a change in Section 42 of POCSO Act, 2012. This section deals with Alternative Punishment and Sections 376A, 376C, 376D were substituted with 376A, 376AB, 376B, 376C, 376D, 376DA and 376DB of Indian penal code.

Conclusion

After going through various amendments and newly inserted Sections in IPC, Cr.PC, The Indian Evidence Act and in The POCSO Act. As we read that the criminal amendment act 2018 just intends to shield the women from a horrifying offense i.e., sexual assault. As the wrongdoing rate of committing sexual assault has expanded with legitimately relative merciless of people. In most of the rape cases, matter goes unreported and the lack of legal merit, social reasons are there which creats hinderances for the victim to access justice. But after doing relevant changes in these penal laws Government of India seeks to provide, welfare for all the women and feeling of safety, as it is necessary due to the recent cases that took place like Kathua rape and Unnao rape cases, these cases generating a pathetic situation for women in which women think that they are not safe even in their houses, as in most of the cases the accused found to be her relative or a known person of the victim so there is absloute need for the law regarding women and child safety.

References

  1. https://mha.gov.in/sites/default/files/CSdivTheCriminalLawAct_14082018_0.pdf
  2. https://www.washingtonpost.com/news/worldviews/wp/2018/06/27/india-ranked-worlds-most-dangerous-place-for-women-reigniting-debate-about-womens-safety/?noredirect=on&utm_term=.45a37141fd60

 

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Impact Of Goods and Services Tax on Various Sectors of Indian Economy

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This article is written by Shreya S.K Pandey, a student of Law College Dehradun Faculty of Uttaranchal University. In this article, she discusses the impact of Goods and Services Tax (GST) in India, the advantages and disadvantages of the GST and the impact of GST on various sectors.

Introduction

Goods and Services Tax (GST) was introduced in the Indian Constitution through the 101st (Hundred and One) Constitutional Amendment Act, 2016. After the enforcement of Goods and Services Tax (GST), many sectors faced some positive effects as well as negative effects.

The enforcement of the tax was for the long term benefit. There were very few sectors that received an immediate benefit from the implementation of Goods and Services Tax (GST). The long term benefit requires the patience of citizens. Where one sector in the country faces a positive aspect, on the other hand, the other sector faced the negative aspect. It is very important to know how and to whom the Goods and Services Tax (GST) had impacted. In a country where the population is 133.92 crores, [Source: World Bank, United States Census Bureau], implementation of a new tax regime was not less a big hurdle. It was required that the authority first understand the concept then it will be easy for the citizens to under the concept of “ One Nation One Tax”.

 Some of the major sectors that have been affected by the implementation of GST are – 

  1. Export-Import sector
  2. Automobile sector
  3. Real estate
  4. Iron and steel
  5. Energy sector
  6. Entertainment industry
  7. Hotel and tourism
  8. Education sector
  9. Banking sector
  10. Textile sector
  11. Manufacturing sector
  12. Information technology sector

Impact on Export and Import Sector

Before the enforcement of the Goods and Services Tax (GST), Export and Import were governed by the Service Tax, Value Added Tax, Excise Duty and Customs Duty. These were imposed on the Import and Export goods and services. When Goods and Services Tax (GST) was introduced all these taxes were merged into one. But the Basic Customs Duty (BCD) continues to work on the import bills.

Impact of GST on import

When any goods and services are imported then it is the duty of the importer to pay the Integrated Goods and Service Tax (IGST) and Customs Duty.

Integrated Goods and Services Tax (IGST) is a tax that is imposed on the supply of Goods and Services which takes place Inter-State. IGST Act governed these transactions. Integrated Goods and Services Tax (IGST) applies to the supply of goods and services which are imported to India as well as which are exported by India.

Note: The import of goods and services are Inter-State supplies and therefore a person is responsible for paying the Integrated Goods and Services Tax (IGST) and Basic Custom Duty (BCD)

Integrated Goods and Services Tax (IGST) is substituted by all the taxes which were governing the imports of goods and services before the GST. Those taxes were:-

  1. Special Additional Duty (SAD)
  2. Countervailing Duty (CVD)

IGST, which is applied to the imported goods and services, is based on the rate of tax which is applicable to the imported goods in India. Importer of goods has the power to claim all the Input Tax Credit of IGST which is paid by him on the import of goods and services, but in such case tax credit on the paid custom duty will not be obtainable and the cost will be borne by the importer.

When Integrated Goods and Services Tax (IGST) is applied, then:-

  1. The exports will be zero-rated
  2. The Central Government and the State Government will share the tax.

Impact of GST on export

The goods and services which are imported in the country are inter-state supplies, therefore, a person who is importing the goods and services is liable to pay the Integrated Goods and Services Tax (IGST). It will be paid on the reverse charge basis by the importer of goods and supplies. There shall be no imposition of Goods and Services Tax (GST) on the goods and services which are exported. However, when there is the export of raw materials and input of those goods which are exempted from the Goods and Services Tax (GST), then the person exporting the raw material and input are liable to pay the tax.

Exporters may claim the Integrated Goods and Services Tax (IGST) and other taxes which are paid by then in the inputs. They may claim IGST when it is paid by the exporter in the input tax credit scheme.

When Goods and Services Tax (GST) was introduced in India it relaxed the Export Tax. Relaxation of tax on the export helped in decreasing the product cost. There is also a relaxation in the availability of input credits on all related services. Ultimately this will help the country to grow in the economic sector as the export industries will flourish due to relaxation in the export tax.

Impact of GST on Business

Goods and Services Tax (GST) has a huge impact on the medium and small enterprises. Business owners of the small and medium-sized are under liability to pay the various taxes. They have to approach the numerous departments to accomplish the work or documentation related to the tax. 

Owners of the small and medium enterprises are under liability to pay the tax up to 32% which was the total tax charged or collected by the Central Government and the State Government. When Goods and Services Tax (GST) was imposed or implemented the small and medium enterprises are now accountable to pay 18 to 22 percent of tax which is much lessened to the previous tax. Also, the owner of small and medium enterprises do not have to visit the distinct departments for the purpose of paying the various taxes. 

Direct impact on the medium and small enterprises

  1. Goods and Services Tax (GST) is building a platform for the new business in the country. It gives an opportunity to start a new work or business. Before the implementation of the Goods and Services Tax (GST), there is a requirement of Value Added Tax (VAT) registration for all the business. The Value Added Tax (VAT) registration was different in every state. As the registration was different in all the states, the rules and regulations were also different. The entire process was quite disoriented.

However, after the imposition of Goods and Services Tax (GST), there is a requirement of only one registration and that too with Goods and Service Tax (GST) which is controlled by the Central, same as service tax.

2. It is compulsory on the part of every business to pay the Value Added Tax (VAT) if the annual turn comes out to be more than five lakh in some states and in some other states it is more than 10 lakh. The different Value Added Tax (VAT) creates confusion for the business.

                  After Goods and Services Tax (GST), businesses are not required to pay the Goods and Services Tax (GST) or to register when the annual turnover of the business is 10 lakh. The provision is applicable to all the states. The provision is helpful for all the small or medium businesses, having a turnover between 5 lakh to 10 lakh, to avert applying for the return of Goods and Services Tax (GST).

3. Goods and Services Tax (GST) provides a platform for small and medium-sized businesses to work in India by applying their ability. There is less confusion or complexity after the Goods and Services Tax (GST) provision. Now, there will be no difference between the goods and services and at last, this will help in making the compliance easy.

Impact of GST on Indian Economy

Goods and Services Tax (GST) is extremely useful for the economy of India for a long term basis. The reason for the benefit of the Good and Services Tax (GST) is due to the uniformity of taxes. It merges all the indirect taxes which was prevailing in India during the Value Added Tax (VAT).

Goods and Services Tax (GST) helps the business sector to grow and to become strong by bringing transparency. When the business sector will flourish it will help in creating further employment which will ultimately lead to reducing the burden of the tax.

Goods and Services Tax (GST) have a consistent scheme of the tax for the goods and services across India, i.e.  0%, 5%, 12%, 18%, and 28%. The tax rate of some goods or products is different from the rest such a gold, precious stones and semi-precious stones. Special rates of taxes are levied in such products. Things such as luxury cars, tobacco, carbonated beverages, etc, are subjected to 22% of the additional cess.

Goods and Services Tax (GST) in comparison to the previous indirect laws relating to the taxes provided a broader base for the taxes. The Central Excise Law exempts the small scale units i.e. SSI having a turnover up to Rs. 1.5 crore from levy the duty. Exemption under the service tax law was given when the previous financial year has accumulated turnover up to Rs. 10 lakh. The lower limit for the purpose of levying the Value Added Tax (VAT) varies from one state to another state i.e. between Rs. 5 lakh to Rs. 20 lakh.

But in the Goods and Services Tax (GST) scheme, the lower limit for the purpose of levying the Goods and Services Tax (GST) was set or settled at Rs. 20 lakh. But in some circumstances i.e. for special category States, the lower limit is fixed at Rs. 10 lakh. Goods and Services Tax (GST) had included within it all the small suppliers. It was observed that many suppliers had registered themselves intentionally and freely so that they may avail all the benefits relating to the input tax credit.

Micro, Small and Medium Enterprises (MSME’s) has suffered some sort of complications with the new tax regime i.e. Goods and Services Tax (GST). All the Micro, Small, and Medium Enterprises (MSME’s) are suffering problems to conduct their business as there is a requirement of registration in every state from where the MSMEs are formulating a supply. Goods and Services Tax (GST)  is helping the Micro, Small and Medium Enterprises (MSME’s) in developing the ability for the purpose of maintaining the account book. Maintenance of the account book will ultimately help the enterpriser to get a loan from any bank or financial institution. This will help them to increase their business. They will now borrow the money from the formal sector and will no longer rely on the informal sector for obtaining the loan. The country like India really demands a strong Micro, Small and Medium Enterprises (MSME’s) which helps in creating more employment.

Goods and Services Tax (GST) helps in controlling the tax evasion. Permanent Account Number (PAN) which is issued by the income tax department is linked with the Goods and Services Tax (GST) number i.e. GSTN. This helped in establishing a relationship between indirect taxes and direct taxes. This ultimately aid or support in reducing the evasion of tax to an enormous extent. During the regime prior to the Goods and Services Tax (GST), there were many cases of tax evasion. When the taxpayers disclose their turnover under the indirect tax law and the direct tax law both differed from each other, which gives a path to the evasion of tax.

After the implementation of the Goods and Services Tax (GST), there is an expectation of an increase in the tax Gross Domestic Product (GDP) ratio. The expectation is that the basis points (bps) will increase up to thirty in the financial year of 2018-2019 each and 2019-2020. This was stated by the table of medium-term expenditure framework (MTEF) in the lower house i.e. Lok Sabha. The databases of the indirect tax and the direct tax are linked together, it helps the data analytical tools to remove all the inconsistency and also helps the authorities of revenue to take a  mandatory action.

Summing up the whole, an increase in the ratio of Gross Domestic Product (GDP) will overall helps in lowering the rate of tax in India. Goods and Services Tax (GST) will help the Indian economy on a long term basis. 

Impact of GST on Real Estate

The imposition of Goods and Services Tax (GST) has some positive impact on the property and real estate. Property buyers are in profit due to the Goods and Services Tax (GST). 12% Goods and Services Tax (GST) charges of property value are liable on all under-construction properties. It does not include the stamp duty and the charges on the registration. Previously this provision was applied in the properties which are prepared or ready.

There is an increase in the profit for the builders and the developers due to the input tax credit. This will additionally pass the profit to homebuyers.

According to changed tax scheme, the under-construction properties i.e. flats and buildings will be charged 18% Goods and Services Tax (GST) in which 9% will be State Goods and Services Tax (SGST) and 9% will be Central Goods and Services Tax (CGST). The government has the power to deduct the land value equal to the 1/3rd  of the total amount which is charged by the builder. It will make the efficient rate of tax as 12%.

Note:- In the real estate sector, a 12% tax rate is for building materials there will be no effect on the value of the flat. 

Sr. No.

Substance or Material

Value Added Tax (VAT)

Goods and Services Tax (GST)

1.

Iron pillars and iron rods

20%

18%

2.

Fly ash bricks and Sand lime bricks

6%

5%

3.

Cement

20 to 24%

28%

4.

Ceramic tiles, plaster, wallpaper, wall fittings, paint

20 to 25%

18%

Positive impact on buyers

Goods and Services Tax (GST) have some positive impact on the prices of the property. It makes the tax system easy for all the buyers. Before Goods and Services Tax (GST), buyers were accountable to pay the taxes which depends upon the property’s construction status and the state in which the property is located.

Buyers were also liable to pay the Value Added Tax (VAT), stamp duty, service tax, and registration charges when they buy the under-construction property. But when they buy the property which was ready or completed, they are liable to pay registration charges and stamp duty. The state has the power to levy the stamp duty, Value Added Tax (VAT) and Registration Charges and all the figures of tax differ from state to state. Central has the power to levy the service tax and it was charged upon the construction. This makes the tax scheme very much complicated for all the buyers, but Goods and Services Tax (GST) had made this simpler.

Under Goods and Services Tax (GST) regime, tax is charged upon all the under-construction properties are at 12% of the value of the property. It does not include the registration charges and stamp duty. There was no imposition of indirect tax on the sale of property which is ready-to-move that is why there is no applicability of Goods and Services Tax (GST) on sale of the ready-to-move properties.

Positive impact on Builders

Before the enforcement of the Goods and Services Tax (GST), a developer or builder had to pay Value Added Tax (VAT), Central Excise Duty and Entry taxes which was the state domain, the state was collecting those taxes on the cost of construction material. Developer and the builder were also liable to pay the tax at 15% for services such as approval charges, architect fees, labor, legal character, etc.

After the Goods and Services Tax (GST), there was not much variation in the construction costs. In addition, logistics reduced cost will lead to a lessening of the expenses. To increase the profit, the input tax credit is helpful.

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Impact on Iron and Steel

Tax Laws relating to the Iron and Steel

Three types of taxes are applied or imposed on the manufacturing of iron and steel. Those taxes are:-

  1. 12.5% of Excise Duty
  2. 5% of the Average Value Added Tax (VAT)
  3. 2% Central Sales Tax (CST)

When we see, there is a total of 19.5% net tax which is imposed upon the iron and steel. If there is an article which is manufactured of iron and steel are charged at the rate of 19.5%.  The rate of the tax charged is similar to the tax rate for manufacturing iron and steel. In Punjab, the Value Added Tax (VAT) is 2.5% for the substances or commodities which are of iron and steel there the pattern of tax charged is not the same in whole India.

Impact after Goods and Services Tax (GST)

Materials like iron and steel are very useful and utilized in everyday life. Goods and Services Tax (GST) has a positive impact on the iron and steel and material made up of these. Kitchen utensils that are useful in day to day life become cheaper than the previous. Utensils like pan, stainless steel cooker and many more are now charged with 12% of Goods and Services Tax (GST). Tt is charged 7.5% less than the current tax laws. There are benefits for all the steel-related companies as there is a 5% low tax rate on all the large inputs used by them under the Goods and Services Tax (GST). These inputs are iron ore, coal, etc.

All the industries relating to the Iron and Steel are getting benefits with the introduction of the Goods and Services Tax (GST). There is an expectation that it will help in furthermore benefits by reducing or lowering the input tax and logistics.

Impact on Entertainment Industry

Before the enforcement of Goods and Services Tax (GST), the entertainment section pays many taxes. They are not limited to one tax. They pay the central tax, state tax and also tax imposed by the local authorities. But, when Goods and Services Tax (GST) was imposed they were liable to pay only one tax.

Before the implication of Goods and Services Tax (GST) 

Before the enforcement of the Goods and Services Tax Act, 2017, entertainment tax was imposed on different entertainment services. Value Added Tax (VAT) and service tax were imposed in various services of the entertainment i.e. nutriment provided in the Cinemas. The Value Added Tax (VAT) charged was 14.5% and the service tax charged was 15%. The entertainment sector was enjoying a subsidy of 60% on the service tax and therefore they were required to pay the service tax at the rate of 6% i.e. 40% of the 15%. The entertainment sector was paying the 20.5% tax along with the entertainment tax.

After the implication of Goods and Services Tax (GST)

After the enforcement of the Goods and Services Tax (GST), all the scattered taxes upon the entertainment sector was subsumed in one i.e GST.

Goods and Services Tax (GST) were ranging between 18% to 28%. The tax rate was totally dependent upon the kinds of the Entertainment Services.

Things within the 18% Goods and Services Tax (GST) 

  1. Circus
  2. Television and DTH services
  3. Theatre
  4. Movie Tickets (Tickets costing up to Rs.100 have GST 12% and tickets costing more than Rs. 100 have GST 18%)

Things within the 28% Goods and Services Tax (GST) 

  1. Racing 
  2. Casinos
  3. Amusement parks
  4. Movie events and festivals
  5. Sporting event

Impact of Goods and Services Tax (GST) on consumers

Goods and Services Tax (GST) has given an overall profit to the entertainment sector. The tax on the movie ticket was 30% and there was 20.5% of the Value Added Tax (VAT) along with the service tax on the foods which a person buys from the theatre. But, after Goods and Services Tax (GST), a tax imposed upon the ticket was 28% and tax on the foods in the cinemas are charged at 18%.

But here we see different results relating to the impact of Goods and Services Tax (GST) on the entertainment sector. Reason for various consequences are:-

  • Low tax on entertainment service in some states.
  • No tax on entertainment services in some state.

When Goods and Services Tax (GST) was imposed in these states, they suffer a rise in the tax on the entertainment sector. However, it was low for those states where the tax on entertainment services was high. But, if we compare, Goods and Services Tax (GST) was quite low in comparison to the tax system, i.e. Value Added System (VAT) and Service Tax, which was prevailing before GST.

State also has the power to include or charge Local Body Tax (LBT) in addition to the tax which was discussed above under Goods and Services Tax (GST). Local bodies also have the power to impose a further charge, under Goods and Services Tax (GST), on the entertainment services in their respective area. 

Impact of Goods and Services Tax (GST) on Owner of Entertainment Service

According to the Goods and Services Tax (GST) regime, the owner of the entertainment service is also liable to pay the tax for the services in entertainment. They will also pay the tax on the sale of the tickets, food, etc. 

Impact of GST on Hotel and Tourism

Income generated from the hotel and tourism plays a vital role in the Indian economy. They help in increasing the Gross Domestic Product (GDP) of India. This is why every State Government keeps on promoting the tourism of there state by various advertisements. Rate of Goods and Services Tax (GST) differs for the hotels because of the tariffs.

  1. If the tariffs range Rs 1000 and less then there will be no Goods and Services Tax (GST).
  2. If the tariff range between Rs. 1000 to Rs. 2500 then Goods and Services Tax (GST) will be 12%.
  3. If the tariff range between Rs. 2500 to Rs. 7500 then Goods and Services Tax (GST) will be 18%.
  4. If the tariff is more than Rs. 7500 then Goods and Services Tax (GST) will be 28%.

There is 5% of Goods and Services Tax (GST) on the person who operates the tour. But there is an expectation that as the Goods and Services Tax (GST) had lower the tax rate on the operators of the tour the price of the tour packages will also show the down graph. 

Impact of GST on Banking Sector

With the imposition of Goods and Services Tax (GST), the banking sector became more expensive. Previously, the tax on all the services relating to the banking was 15% but after the enforcement of Goods and Services Tax (GST), the tax rate on all the banking service was increased to 18%. These are some of the impacts of Goods and Services Tax (GST) on banking sector:-

  • Each branch of Banks must have separate registration

After the implementation of the Goods and Services Tax (GST), every bank is required to obtain a separate registration for all the branches within them. Before Goods and Services Tax (GST), all the employees working in the banks are getting out of their relief mode because there was a concept of “single centralized registration” for all the branches of banks. It was a complex task to be done in a country like India because there were excessive numbers of banks having a more excessive number of branches prevailing in India.

  • The transaction between banks is not free

After the implication of Goods and Services Tax (GST),  the money transaction, whether it was internally or externally, between the two different banks where done by imposing the tax. Before the GST, it was free. 

  • Dependency upon CGST and SGST

Under Goods and Services Tax (GST), there are two different kinds of taxes prevailing in India. First, Central Goods and Services Tax (CGST) and second is State Goods and Services Tax (SGST). CGST is the domain of Government and SGST is the domain of State Government. With the advent of these two types of Goods and Services Tax (GST) the whole code or protocol of the banks and relating sector are altered in a stipulation of the service which they provide to all consumers.

  • Point of supply identification

Every consumer or customer having their account in any bank has been offered a “point of supply identification. This helps the customers in the transfer of money in any part of India. If a person has an account in a remote area, he will easily transfer the money with the limitation of amount subjected to the rules stated by the Reserve Bank of India (RBI). 

  • Input Tax Credit in GST

Before the imposition of Goods and Services Tax (GST), the input tax credit was not granted in accordance with the Central Value Added Tax (CENVAT) protocols or code. However, after the Goods and Services Tax (GST), the input credit tax is acknowledged to all the banks which will ultimately reduce the evasion of tax when there are external supply funds.

  • Growth of transaction

After Goods and Services Tax (GST), the banking sector has approached in the whole of India and even in the acquaintance countries for the purpose of ensuring the continuous and steady business. The sudden growing and spreading of business will lead to increasing the claim of funds. And as the demand for funds will increase this will ultimately benefit the banks because of expansion in the number of transactions. 

  • Distinctiveness in services

Every bank gives a variety of services to all of its customers or consumers such as credit card, debit card, internet banking, etc. When Goods and Services Tax (GST) came into force, there was an amendment in the rules and regulations relating to the banks and this emerged as the up-gradation of all the system including the Automated Teller Machine (ATM) and all the systems related to the transaction as demanded by the department of IT.

Impact of GST on Supply Chain

Supply Chain

It is a type of web or chain which lies between a corporation or company and its supplier for production and distribution of a particular product to an ultimate buyer or purchaser. It represents the process that was taken from receiving the product from its original character to the consumer.

The supply of chain is necessary for the purpose of proper running of trade and business which is producing and circulating the product and material. There is some impact on this sector after the implementation of Goods and Services Tax (GST) which are:-

  1. Enhancement and advancement of the stock points.
  2. Reduction in the channel inventories.

Channel Inventories means average product left in the retail store’s “shelves” which is not sold or taken by the  end consumer,

  1. There will be a straight or direct benefit for the procurement out of state.
  2. Benefit in the logistic cost.

Now a day, the logistics industry is considered as the backbone of the Indian Economy. When Goods and Services Tax (GST) was imposed as a new tax regime for the Indian economy system the logistics sector was improvised as the activities like corruption was reduced. Now, there is less transportation time as Goods and Services Tax (GST) had made the time catching clearance procedure much easier. The revenue related to the business was increased and the total logistic cost is also reduced by the Goods and Services Tax (GST).

Impact of GST on Textile Sector

Goods and Services Tax (GST) has shown its positive impact upon the textile and readymade garments. They are benefited from this new scheme of tax. Some of the benefits which Goods and Services Tax (GST) provided to the textile sector are:-

  1. The input credit system or chain is now broken
  2. The price for the manufacturing of goods is now lower in comparison to the previous tax regime.
  3. Input credit is now granted in the capital goods

After the implementation of Goods and Services Tax (GST), all readymade garments which range up to Rs. 1000 are exempted from the terms and clause of the Goods and Services Tax (GST) and where the garments are branded ranging above Rs. 1000 then 12% of tax will be levied upon them.

Advantage of GST

Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT). It is a levy upon the manufacture, consumption, and sale of goods and services in India. It substituted or merged all the indirect taxes which were imposed by the Central Government and State Government on goods and services. Goods and Services Tax (GST) focuses on a long term benefit. Many sectors benefited due to this new regime. Some of the advantages of Goods and Services Tax (GST) are:-

  1. Goods and Services Tax (GST) merged all the indirect taxes into one. This made the tax system easier and simpler for all service and business.
  2. Companies that are providing the services and having the turnover less than the Rs. 20 lakh are exempted under Goods and Services Tax (GST) for paying the tax. But in the case of North East States, the lower limit for the purpose of exempting the Goods and Services Tax (GST) is Rs. 10 lakh. This small scale business may ultimately escape the long process of tax.
  3. Companies who have the turnover up to 75 lakh under Goods and Services Tax (GST) scheme may take a benefit of the composition scheme and through this, they have to pay only 1% Goods and Services Tax (GST) on their turnover.
  4. Goods and Services Tax (GST) reduces the sale which is done without a receipt and also lowers the rate of corruption.
  5. Tax on goods such as cars, smartphones, etc is lessened and now tax is up to 2% or 7.5%.
  6. This scheme had helped in minimizing the evasion of tax.
  7. The logistic cost has been reduced by the Goods and Services Tax (GST). Border taxes are eliminated and inconsistency relating check post was determined which ultimately reduced the logistic cost.  
  8. Goods and Services Tax (Gst) had created a liability and regulation towards the sector which is unorganized for example textile industries. 

Disadvantage of GST

Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT). It is a levy upon the manufacture, consumption, and sale of goods and services in India. It substituted or merged all the indirect taxes which were imposed by the Central Government and State Government on goods and services. Goods and Services Tax (GST) focuses on a long term benefit. Working highly for the future it shows some negative aspects too. Some of the disadvantages of Goods and Services Tax (GST) are:-

  1. Goods and Services Tax (GST) had made the transactional fees between the financial sector more costly or expensive. Transactional fees have been increased from 15% to 18%.
  2. Goods and Services Tax (GST) had made the premiums of the insurance more costly and pricey.
  3. It has shown some negative impact on the real estate market. Due to Goods and Services Tax (GST). There is an increase in real estate prices from 8% to 12%. But it is expected that it will not last for the long term. 
  4. Goods and Services Tax (GST) does not include petrol due to which the price of petrol always goes in contrary to the principles of the unification of commodities.
  5. Goods and Services Tax (GST) had advanced towards the more complex system for the owners of the businesses. 
  6. Before Goods and Services Tax (GST), few retail products have tax up to 4%. But Goods and Services Tax (GST) had made the clothes and garment further expensive or pricey.
  7. Goods and Services Tax also affected the sector of aviation. Before Goods and Services Tax (GST), the service tax on the ticket of the airways ranges between 6% to 9%. But now they are exceeded and range up to 15% which is nearly double the tax rate which was imposed by the Government earlier.
  8. With the emergence of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) which substituted the Service Tax or Central Excise, Value Added Tax (VAT) and Central Sales Tax (CST) there was no change in the system of tax. The tax system still consists of many layers.

Conclusion

The aim of the government is to bring India in an umbrella of one tax promoting the “One Nation One Tax” system. Implementation of Goods and Services Tax (GST) substituted the regime of Value Added Tax (VAT) in India. It merged all the indirect taxes which was prevailing in the country during the Value Added Tax (VAT) regime. With the imposition of Goods and Service Tax (GST) was a big task in a country like India where new changes are not easily accepted. It was a complex system to understand at first but later it is coming out as a long term benefit for the country. There is the various sectoral impact of Goods and Services Tax (GST). Some sectors show a positive impact while others show a negative impact. Due to a long term benefit scheme, there is a less immediate positive impact on Indian society and economy. However, it is expected that there is an expectation of the growth of the Indian Gross Domestic Product (GDP). the only thing is required to have patience and continuous following of rules and regulations for uplifting the country’s economy.

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Freedom of Speech and Expression

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This article is written by Amanat Raza, a student of faculty of law, Aligarh Muslim University. In this article, he discusses the concept of freedom of speech and expression, its elements and grounds for restriction. 

Origin of freedom of speech and expression

The idea of freedom of speech had originated a long time ago. It was first introduced by the Greeks. They used the term “Parrhesia” which means free speech or to speak frankly. This term first appeared in the fifth-century B.C. Countries such as England and France have taken a lot of time to adopt this freedom as a right. The English Bill of Rights, 1689 adopted freedom of speech as a constitutional right and it is still in effect. Similarly, at the time of the French revolution in 1789, the French had adopted the Declaration of the Rights of Man and of Citizens.

The UN General Assembly adopted the Universal Declaration of Human Rights on 10 December 1948 under Article 19 which recognised the freedom of speech and expression as one of the human rights.

Freedom of speech and expression in India

John Milton says that “give me the liberty to know, to argue freely, and to utter according to conscience, above all liberties”.

The above sentence by John Milton clearly displays the essence of freedom of speech. He argued that without human freedom there would be no progress in science, law or in any other field. According to him, human freedom means free discussion of opinion and liberty of thought and expression.

Justice Louis Brandies had made a classic statement on the freedom of speech in the context of the U.S Constitution in the case of  Whitney v. California [1]

Those who won our independence believed that courage is the secret of liberty and liberty is the secret of happiness. These people believed that freedom to think, freedom to speak and freedom to assemble wilfully for discussion is futile and of no use. But the public discussion is a political duty and it should be the fundamental principle of the government of America. 

The importance of this right is that it helps us in attaining self-fulfilment and in discovering the truth.

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Meaning of freedom of speech and expression

The right to express one’s own ideas, thoughts and opinions freely through writing, printing, picture, gestures, spoken words or any other mode is the essence of freedom of speech and expression. It includes the expression of one’s ideas through visible representations such as gestures, signs and other means of the communicable medium. It also includes the right to propagate one’s views through print media or through any other communication channel.

This implies that freedom of the press is also included in this category. Free propagation of ideas is the necessary objective and this may be done through the press or any other platform. These two freedoms i.e., freedom of speech and freedom of expression have their own respective qualifications.

According to Article 19 of the International Covenant on Civil and Political Rights (ICCPR), the freedom to seek, receive, and convey information and all kinds of ideas irrespective of boundaries, either orally or in the form of writing, print, art or through any other media of their choice are included in the right to freedom of speech and expression.

Article 19 (1)(a) of the Indian constitution

In India, the freedom of speech and expression is granted by Article19(1)(a) of the Indian Constitution, which is available only to the citizens of India and not to foreign nationals. Freedom of speech under Article 19(1)(a) includes the right to express one’s views through any medium, which can be by way of writing, speaking, gesture or in any other form. It also includes the rights of communication and the right to propagate or publish one’s opinion.

The right that is mentioned above, guaranteed by our constitution, is regarded as one of the most basic elements of a healthy democracy because it allows citizens to participate in the social and political process of a country very actively. 

Importance of freedom of speech and expression

It was well said by Cicero, a Roman politician as well as a lawyer that “The people’s good is the highest law”. The manner in which this can be achieved can be inferred from our constitutional provisions, which demonstrate that if a person raises his/her voice against any evil then everybody will listen to the voice and stand against that evil to scrap it out from its root.

Let us have an example of this: compare the past when women were not allowed to vote with the present day. Now women are allowed to vote. How does this happen? It happens because of the right of free speech and expression. The right to free speech and expression have that power through which it can break any type of giant brick that comes in its way.

Other rights that allow or help Indian society develop and progress are supported by freedom of speech and expression which is also a fundamental human right. Free speech and expression have always been important throughout history as it facilitates many changes, one of which is the French revolution.

Free speech and expression not only includes the right to express what one thinks but it also includes listening to others. When a person expresses his/her opinion, it only carries the intrinsic value of that opinion and being silent on that opinion is an injustice to the basic human rights.

Union of India v Naveen Jindal and Anr.,[2]

Facts: The respondent Naveen Jindal was not allowed to hoist the national flag at the office premise of his factory by government officials on the ground that it was not permissible under the Flag Code of India.

Judgment: In this case, the high court held that the restrictions that the Flag Code imposed on citizens on hoisting the National Flag were not permissible under clause (2) of Article 19 of the Indian Constitution. The court has also stated that displaying a flag is an expression of pride as well as an expression of genuine enthusiasm and it can only be restricted in accordance with what has been prescribed in the Constitution, otherwise, the restriction would discourage the citizens or Indian nationals from identifying with the flag of the country.

Virendra v. The State of Punjab and Anr.[3]

Facts: Serious communal tension had arisen in the state of Punjab between the Hindus and the Akali Sikhs because of the question of partition of the state on a linguistic and communal basis. There were two petitioners and both were from different newspapers. Their newspapers’ policy was to support the ‘Save Hindi agitation’. A notification was passed by the home ministry office under the impugned Act prohibiting the publication and printing of any material relating to the ‘Save Hindi agitation’. Both the petitioners filed a complaint alleging that the Punjab Special Powers (Press) Act, 1956 passed by the state legislature was unconstitutional.

Judgment: The court held that Section 2 of the impugned Act did not merely impose restrictions but imposed a total prohibition against the exercise of the right of freedom of speech and expression, making the same a violation of the right guaranteed by the Constitutional provision. 

Sakal Papers v. Union of India[4]

Facts: The petitioner was the owner of a private limited company, ‘Sakal’, which published daily and weekly newspapers in Marathi. This newspaper used to play a leading part in the dissemination of news and in moulding public opinion. They claimed that their net circulation of copies in Maharashtra and Karnataka on weekdays was 52,000 and on Sunday it was 56,000. However, the Central Government passed the Newspaper (Price and Page) Act, 1956, later, the Daily Newspapers (Price and Page) Order, 1960. Because of that order, the government fixed the maximum number of pages that could be published by the newspapers. So the petitioner filed a case challenging the constitutionality of that Act. 

Judgment: The court held that Section 3(1) of the Act was unconstitutional and also an order made under the same would be unconstitutional.

Elements for the right to freedom of speech and expression

The main elements for the right to freedom of speech and expression are as follows:

  1. This right is available only to a citizen of India and not to the person of other nationalities i.e., foreign nationals.
  2. The freedom of speech under Article 19(1)(a) of the Indian constitution includes the right to express oneself through any medium, such as in words of writing, printing, gesture, etc.
  3. This right is not absolute, which means that the government has the right to make laws and to impose reasonable restrictions in the interest of sovereignty and integrity of India, friendly relations with foreign states, the security of the state, public order, decency, morality, defamation and contempt of court and incitement to an offence.
  4. Such a right ought to be implemented as much by the action of the State as by its inaction. Thus, failure on the part of the State to guarantee the freedom of right and expression to all its citizens would also constitute a violation of Article 19(1)(a) of the Indian constitution.

Freedom of press

“Our liberty depends on the freedom of the press, and that cannot be limited without being lost” is stated by Thomas Jefferson to define the importance of freedom of the press.

To preserve the democratic way of life it is necessary that people should have the freedom to express their feelings and to make their views known to people at large. Freedom of speech includes propagation of one’s views through print media or any other communication channels like radio and television, subject to reasonable restrictions imposed under Article 19(2) of the Indian constitution.

Although freedom of the press is not mentioned in Article 19 of the Indian Constitution, yet it has been a part of freedom of speech and expression as considered by judges of the Supreme Court through decided cases.

In the leading case of Romesh Thapar v. The State of Madras,[5]  it has been decided by the supreme court that freedom of the press is an intrinsic part of freedom of speech and expression.

Why freedom of the press is important in the Indian context?

An American lawyer and free press advocate  Trevor Timm have stated that “An independent press is one of the important pillars of democracy”. Freedom of the press has always been a barricade against the secret government, against tyranny and against authoritarianism. The press has a very important role in showing the real face of political parties and also any type of incident that has been disguised and cannot be seen by the common people.

It is the press who revealed the income of a kachori wala (in U.P., Aligarh) recently and also showed the face of some dhongi type babas such as Ram Raheem and many others. It is the media who have the power to provoke people against a political party by showing or revealing their truth. It is used to measure the checks and balances in a democracy.

In the case of Indian Express Newspaper v. Union of India,[6] it was held that the press plays an important role in the democracy machinery. The courts have a duty to uphold the freedom of the press and invalidate all laws and administrative actions that would take that freedom.

An important aspect to be noted is that the freedom of the press has been specifically mentioned in the United States Constitution,[7] while it is a mere inference made by courts in the Indian context, which explains the possible variation in the adjudication of disputes relating to this right in both jurisdictions. 

What are the elements of freedom of the press?

There are three elements of freedom of the press and these are as follows:

  1. Freedom of access to all types of source of information
  2. Publication freedom, and 
  3. Circulation freedom

What is the reason behind the degradation of freedom of the press

In the initial phase of freedom of the press, the views of Jawaharlal Nehru regarding press was that he wanted the press free from all evils and also free from all forms of danger involved in the wrongful use of that freedom. But Indira Gandhi had opposite or conflicting views in respect of Jawaharlal Nehru. She didn’t have much faith in the press and her misgivings were first expressed when she was addressing the International Press Institute Assembly in New Delhi on November 15, 1996, when she blamed the press for giving wide publicity to the student unrest in the country.

The press has slowly been losing its importance in the country. Many politicians take advantage of the press to win an election by giving rise to conflict amongst the people. Many a time, freedom of the press has been suppressed by the legislature. There is a case in respect of that condition,  Sakal Paper v.Union of India.,[8] in which, the Daily Newspapers (Price and Page) Order, 1960, fixed the number of pages and the size of the pages which a newspaper could publish. It was held that it violated the freedom of the press and was not a reasonable restriction under Article 19(2).

Freedom of Commercial Speech

The current judicial position of commercial speech in India is that it can be seen as a part of freedom of speech and expression with reasonable restrictions given or guaranteed under Article 19(2) of the Indian Constitution.

Are we having the freedom to advertise?

The freedom of speech and expression under Article 19(1)(a) of the Constitution of India has been given to every citizen. Various judicial pronouncements have increased the ambit of freedom of speech and expression. Now it includes:

  1.  Right to acquire and disseminate information.
  2. The right to communicate through any media, in the form of an advertisement, movie, speech, etc.
  3. Right to free debate and open discussion.
  4. Freedom of press.
  5. Freedom to be informed.
  6. Right to remain silent.

Thus, it can be seen that we have the right to advertise. In the case of Tata Press Limited v. Mahanagar Telephone Nagar Limited,[9] the Supreme Court held that commercial speech or commercial advertisement was also a part of freedom of speech, which could be restricted only within the limits of Article 19(2) of the Indian Constitution.

Right to Broadcast

The concept of freedom of speech and expression has evolved to include in its ambit all available means of expression and communication because of the advancements in technology. This includes broadcast media, electronic media and many other types of media.

In the case of Odyssey Communications (P) Ltd. v. Lokvidayan Sanghatana,[10] the supreme court held that the right of the citizens to display films on state channels such as Doordarshan came under the purview of fundamental rights guaranteed under Article 19 of the Indian Constitution.

Right to Information

The right to know or to get information is one of the aspects of freedom of speech and expression. Freedom to receive information is also included in the freedom of speech and expression through various supreme court judgments. Right to Information Act, 2005, which especially talks about the right of the people to ask for information from the government officials.

Rights of voters to know about their candidates

In the case of Union of India v. Association for Democratic Reforms,[11] it has been held that the amended Electoral Reform Law passed by the Parliament was unconstitutional as it violated the right of the citizens to know under Article 19(1)(a) of the Indian constitution.

Right to Criticize

In a monarchy, we know that the king is supreme and people are his subjects. This system of relationship gets reversed in a democratic form of government. The people are supreme and the state authority is a servant of the people. In Kedar Nath Singh v. The State of Bihar,[12] the supreme court held that mere criticism of the government is not sedition unless this criticism leads to incitement of violence or breach of public order. Similarly, there is a case of Manipur, where a journalist named Kishorechand Wangkhem was charged for criticizing the chief minister and charged with the offence of sedition under the National Security Act. However,  he was released as the court found that the people of India had the right to criticize under Article 19(1)(a) of the Indian Constitution.

In another case of S. Rangarajan v. P. Jagjivan Ram,[13] it was held that everyone has got the right through the Indian constitution to form his/her opinion on any issue of general concern. 

freedom of expression

Right to Expression Beyond Boundaries 

The advancement in technology or the revolution in communication and electronic media has narrowed the gap of transnational barriers or we can say that it has diminished this barrier. It has made the transmission of information possible, even to other parts of the world within a fraction of second. In Maneka Gandhi v. Union of India,[14] the Supreme Court analysed whether Article 19(1)(a) of the Indian Constitution was confined to the Indian territory and finally held that the freedom of speech and expression was not confined to the national boundaries.

Right not to Speak

This right has also been included in freedom of speech and expression. This right came to the notice of people after the judgment in the leading case of Bijoe Emmanuel v. The State of Kerala.[15] This case is also known as the National Anthem case. In this case, three students were expelled by the school authority on refusal to sing the National Anthem.

However, these children stood from their seats in respect, when the national anthem was playing. The validity of the expulsion of children was challenged before the Kerala High Court. The court held that the expulsion of students on the ground that it was their fundamental duty to sing the national anthem was upheld. 

However, on a further appeal by the students before the Supreme Court, it held that the students had not committed any offence under the Prevention of Insult to National Honor Act, 1971. Also, there was no law through which their fundamental rights under Article 19(1)(a) of the Indian Constitution could be curtailed. And also it was held that expulsion of children from school violated the right of freedom not to speak under Article 19(1)(a).

Some of the important cases relating to the freedom of speech and expression are as follows:

This case challenged the validity of Section 5(2) of the Indian Telegraph Act, 1885, which stated that if there occurred any public emergency, or in the interest of public safety, the Central Government or the State Government or any other officials were authorized to take temporary possession of any telegraph, on behalf of the government. Two conditions were observed while dealing with this case:

  • The occurrence of public emergency 
  • In the interest of public safety

For the application of the provisions of Section 5(2), these two conditions were the sine qua non. If any of these two conditions were not present, the government had no right to exercise its powers under the said Section.

This case challenged the validity of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1956, on the ground of restriction that it took away or abridged this freedom. The Supreme Court held that an advertisement is a form of speech only if every advertisement was held to be dealing with commerce and trade and not for propagating any idea.

It is the first case in which the issue of the prior censorship of films came into consideration by the supreme court of India. The petitioner’s film was not given ‘U’ certificate so he challenged the validity of censorship under the criteria as it violated his fundamental rights of freedom of speech and expression. The court, however, held that the motion picture stirs emotions more deeply than any other form of art. Hence pre-censorship was valid and was justified under Article 19(2).

Grounds of restriction

It is necessary to preserve freedom of speech and expression in a democratic country. And it is also necessary to restrict this freedom to maintain social order otherwise some people might misuse this freedom. There are some restrictions imposed through Clause (2) of Article 19 on freedom of speech and expression on certain grounds.

Article 19(2) states thatnothing in sub-clause (a) of clause ( 1 ) shall affect the operation of the existing law, neither can it prevent the State from making any law, in so far as such type of law imposes reasonable restrictions on the exercise of the right bestowed by the said sub-clause in the interests of the sovereignty and integrity of India, public order, friendly relations with foreign states, the security of the State, decency or morality or in relation to contempt of court, defamation or incitement to an offence”.[19]

The ground for restriction is as follows: 

Security of the state  

Article 19(2) imposes reasonable restrictions on the freedom of speech and expression in the interest of the state. The term ‘security of the state’ should be distinguished from ‘public order’ as security of the state includes an aggravated form of public order. For e.g., waging war against the state, rebellion, insurrection, etc. The term ‘security of the state’ in Article 19(2) does not only mean danger to the security of the entire country but it also implies danger to the security of a part of states or threat to a part of states. 

Friendly relations with a foreign state 

This ground of restriction was added through the Constitutional First Amendment, 1951. The main objective behind adding this provision was to forbid unrestrained vitriolic propaganda against a foreign-friendly state, which could jeopardize the maintenance of good relations between India and that state. If the freedom of speech and expression disturbs or hampers the friendly relations of India with foreign states, the government has the right to impose a reasonable restriction. 

Public order 

This ground of restriction was also added through the Constitutional First Amendment,1951. A situation had arisen in the case of Romesh Thapar by the Supreme Court and to meet that situation, this ground had been added in the constitution. The word ‘public order’ depicts the sense of public safety, public peace, and peace of the community. In Om Prakash v. Emperor,[20] it has been said by the judge that anything that disturbs public peace can be said to disturb public order automatically. There is also a test that determines whether an act affects law and order or public order. 

Decency and Morality 

The word to express or say something should be a decent one that it should win the heart of the opposite person and it should not affect the morals of the society. So our Constitution has considered this view and added this ground in our Constitution. On the ground of decency and morality, Sections 292 to 294 of the Indian Penal Code, 1860 provides an example of a restriction on the freedom of speech and expression. These are the terms of variable content having no fixed meaning or we can also say that these words are of wide meaning. It varies from society to society and time to time depending upon the morals prevailing in contemporary society. The word morality and decency is not confined to sexual morality only; it has a broader scope.

Contempt of court 

In a democratic country, we know that the judiciary plays an important role in governing a country in a peaceful manner so in such types of situation it is important to respect the institution and its order. What hampers the administrative law? How does anything interfere with justice? We know that there is a limitation in a judicial proceeding and anything that curtails its freedom leads to hampering of the administrative law and also anything can interfere with the decision of justice. 

Contempt of court can be defined in two categories i.e., civil contempt and criminal contempt. Contempt of court has been defined in section 2(a) of the contempt of court act, 1971. Initially ‘truth’ was not a defence under contempt of court but in 2006 an amendment was made to add ‘truth’ as a defence. In the Indirect Tax Practitioner Assn. v. R.K. Jain [21] case, the court has held that truth which is based on the facts should be allowed as a valid defence. 

Elements or essential needed to established a contempt: 

  1. Making of a valid court order.
  2. The respondent should have knowledge of that order.
  3. The respondent should have the ability to render compliance.
  4. Intentionally or willfully disobey the order.

defamation

Defamation 

Article 19(2) prevents any person from making any statement that defames the reputation of another person. One who gets the freedom of any type should not misuse that freedom to hurt or affect the reputation or status of another person. Generally, a statement that injures the reputation of a man results in defamation. The right to free speech is not qualified. So it does not mean to hurt any person’s reputation which is protected under Article 21 of the Indian Constitution.  

Incitement to an offence  

This ground was also added by the Constitutional First Amendment act, 1951. It is obvious that freedom of speech and expression does not include the right to incite people to commit an offence. The word ‘offence’ has been described under section 40 of the Indian Penal Code, 1860.

Any type of offence takes place in two ways: 

  1. By the commission of an act
  2. By the omission of an act 

Sovereignty and Integrity of India  

To maintain the sovereignty and integrity of a state is the main duty of a government. This ground has been added by the Constitution (Sixteenth Amendment) Act, 1963

From the above analysis, it can be stated that grounds contained in Article 19(2) show that they are all concerned with national interest or in the interest of the society. 

Conclusion 

Civil society provides one of the most basic guarantees to citizens i.e., freedom of expression in the context of speech. After concluding we can say that the right to freedom of speech and expression is an important fundamental right, whose scope has been widened to include freedom of the press, right to information which also includes commercial information, right to not speak and right to criticize. 

In the modern world, the right to freedom of speech does not include only freedom to express one’s view through words but it has also included several means of communication to express one’s views. The right that we talked about is subject to reasonable restriction under Article 19(2) of the Indian Constitution. 

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References 

  • Whitney v. California, 274 U.S. 357 (1927)
  • Union Of India vs Naveen Jindal & Anr on 23 January 2004, 2920 of 1996
  • Virendra v. The State of Punjab, 1957 AIR 896
  • Sakal Papers v. Union of India, 1962 AIR 305
  • Romesh Thapar v. State of Madras, 1950 AIR 124
  •  Indian Express Newspaper v. Union of India, 1986 AIR 515
  • https://www.law.cornell.edu/constitution/first_amendment
  • Sakal Papers v. Union of India, 1962 AIR 305
  • Tata Press Limited v. Mahanagar Telephone Nagar Limited, 1995 SCC (5) 139
  • Odyssey Communications (P) Ltd .v. Lokvidayan Sanghatana, 1988 AIR 1642
  • Union of India v. Association for Democratic Reforms, AIR 2001 Delhi 126
  • Kedar Nath Singh v. State of Bihar, 1962 AIR 955
  • S. Rangarajan v. P. Jagjivan Ram, 1989 SCR (2) 204
  • Maneka Gandhi v. Union of India, 1978 AIR 597
  • Bijoe Emmanuel v. State of Kerala, 1987 AIR 748
  • People’s Union for Civil Liberties v. Union of India, 490 of 2002
  • Hamdard Dawakhana v. Union of India,1960 AIR 554
  • A. Abbas v. Union of India, 1971 AIR 481
  • Article 19(2), Constitution of India, 1950.
  • AIR 1948 Nag, 199
  • Indirect Tax Practitioner Assn. v. R.K. Jain,  NO.15 OF 1997
  • The constitution of India, P.M. Bakshi, 8th Edn. ( New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2007) 
  • Indian Penal Code, Ratanlal and Dhirajlal, Thirty-third Edition, 2006

 

 

 

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Right To Education

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This article is written by Akash R. Goswami of the faculty of law, Aligarh Muslim University. In this article, he has discussed the aspect of education as a right of every child, the RTE Act, and loopholes and challenges for the implementation of this act. 

Introduction

The root of education is bitter, but the fruit is sweet. I begin my introduction with this sweet quote, but this is very unfortunate that only half of India’s children  between the age of 6-14 go to school. 3 million children between the age of 6-14 do not attend school. And 70 million children across the world are restricted from going to school everyday. In this article, we will know about the basic need of education in regard to human rights, challenges in India regarding education, the rights associated with education, acts, amendment and allocation of funds and many more aspects in regards to the constitution of India.  

International Legal Basis

On the foundation of international recognition “Right to education enriched in international law in Article 26 of the Universal Declaration of Human Rights, and considered basic need of every human being. In many international events such as  Article 13 and 14, social and cultural rights that everyone should have primary education right. In 1960 UNESCO, right to education again strongly stated in the convention against discrimination in education, in Europe convention which is held on 20 March 1952 states that right to education is a human right and everyone shall have the access to primary education hence to established and entitlement to education under Article 2.

United nations universal declaration on human rights adopted in 1941 states that:

“Everyone human being has the right to education. Education must be free, at least in the primary and fundamental stages. Moreover, primary education shall be compulsory. Advance and professional education shall be made generally available and higher education shall be accessible to all on the basis of merit and equality.”

Many other international human rights treaties affirmed the right to education protected and propagate such as the following:

  • United Nations pact on the rights of the Children in 1989 under article 28 and 29.
  • Eradication of all type of discrimination against women 1981 under article 10.
  • Convention against discrimination on the basis of employment and corruption in 1953 under article 3.

These international treaties have been working for access to the educational provision to all and also try to an annulment of discrimination at all stages of the education system and wanted to give good quality and standard of education that one should have it.

For the operation of these treaties, it’s a pleasure to mention India is a state party the CERD convention, the CEDAW convention and the convention of the rights of the child.

Some international organizations working for the promotion of education

  • UNESCO
  • UNICEF
  • Amnesty International
  • The International Labour Organization
  • The World Bank

These all international organizations and treaties made out hard their efforts to eliminate the problem of poverty through education, although there are many international problems but to attain them first we have to accomplish the task of education and for this it is very crucial that every child must have access to standard quality of education (primary) and should get a chance of higher and advanced education.

Right to Education in India

Education is the process of making things learned and acquisitions of knowledge, skills, beliefs, and habits and helps to lift those who belong to socially and economically marginalized from poverty. 

India is known as the home to 19% of the world’s children. What does that mean? India is a country where the majority of youngster lived. But it is also true that one- third of the world’s illiterate population resides in India. It is not like that the rate of literacy has not been increased, it is, but the rate of growth is rapidly very slow in contrast to decline. from 1991 to 2001 the rate was 12.6% while it has declined to 9.21%.

To tackle these alarming issues, the government of India introduced the right to free and compulsory education act, RTE and making education as a fundamental right for the children’s age group of 6-14.

The Right to education act is an act of parliament proposed on 4 august 2009 which shows and highlights the model of the importance of free and compulsory education to children age group 6-14 in India. India has become one of the 135th countries to implement the right to education as a fundamental right guaranteed in our constitution under Article 21A to every child. This act came into force on 1st April, 2010.

Challenges and Implications

Although the right to education becomes the fundamental right but still a parliamentary process and largely expected to become a reality soon, determined to succeed for a country who has witnessed policy failure for a decade. We observe that education is never inexpensive, neither free nor compulsory. To make a move through legislative enactment is a major shift for the state-guaranteed education provisions given to disadvantaged groups who had witnessed the history of provisions that have consistently failed from protecting the interest of minority class.

Studies have uniformly shows that those who have excluded from the education reflects largely inequality with social, political and economic fabric likely of caste, class, and gender. Edges of exclusion are broadly possessed in occupational and social classification.

For example children of upper sophisticated class, or small families and households who are economically stable and depend on non- agricultural profession has better educated.

One of the biggest reasons which impediments India’s progress and could not enable it to achieve its high level of illiteracy, especially when the gap between discourse, debate and structural framework in all policy effort in education, and more prominently development have been the main genesis for India’s poor performance in securing the equitable educational opportunity for all. Despite the variety of commitments and right laid down in Indian constitution regarding equality is constantly failed to satisfy the ambition developed by the birth it comes to women and girls. Despite several attempts and efforts through educational reforms by the government, the most recent census (2011) reports that overall youth literacy is at 74.04% – 82.14% among males and only 65.46% for females. This data clearly shows that the dramatic disparity and indifferences in the literacy levels between genders, amounting to a gap of 16.68%. The situation is even more shoddy for women residing in rural areas. Another more crucial factor which always a wall against any policy is “Poverty” and can be blamed for many problems in India, including that of a low female literacy rate. More than two-thirds of India’s population lives below the poverty line. although the government is putting many efforts to make primary education free, many families are still not ready to send their children to school. As parents think instead of going to school which is located at a far distance from their villages or homes to go to work and earn a livelihood.

There are many more challenges, but the above discussed are creating more problems before the government while the formulation of the RTE Act.

Constitution on Education

The basic structure gives every citizen social justice and, education is a social aspect, which needs to be addressed by policymakers if the population is lacking behind literacy level than there will be no equality of opportunity to be a real provision. And if the person is not given the chance to make his/her life, free from misery and problems than one can not be attained social transformation, which is the cornerstone of education. 

 The Right to education is now become the fundamental right and included in part III of the Indian constitution under article 21-A. This was done in the case of Mohini jain vs. state of karnataka [1]. Supreme court division bench decide this case. Justice comprising of Kuldip Singh and R.M Sahai held that:

“Right to education is the essence of the right to life and directly flow and interlinked with it, and life living with dignity can only be assured when there is a significant role of education”.

Later, the validity of this judgment re-examined in by five judges bench in J.P. Unnikrishnan v. State of Andhra Pradesh [2] and held that:

“Right to education means citizen has the right to call up the state to provide the facilities of education to them in according to the financial capacity”.

The above-stated cases enumerate the right to education to be in part III being as a fundamental right. There are many more cases which seeks that right to education is a fundamental right, in the case of Maharashtra State Board of Secondary and Higher Education vs. K.S. Gandhi [3], the supreme court referred above judgment in relation to case Bandhua Mukti Morcha, etc v. Union of India [4].

  • It would be therefore the necessary duty of the State to ensure the facilities and opportunity to children enjoined under article 39(e), 39 (f) of the Constitution and to prevent exploitation of their childhood due to extreme poverty and notion.

Provisions given in the Constitution promoting and strengthening the educational framework in India 

  • Article 28: In our Constitution Article 28 provides freedom to attend any religious instruction or religious worship in educational institutions.
  • Article 29: This article gives equality of opportunity in educational institutions.
  • Article 30: Acknowledge the right of minorities to establish and administer educational institutions.
  • Article 45: This article mandate the state shall dispense to provide within a period of ten years from the inception of this Constitution for free and compulsory education for all children of this country until they complete the age of 14 years. The responsibility for providing elementary education lies with the scope under state Government, the central Government, the Local Bodies and authorities, and voluntary organizations or any other government organization.
  • Article 46: Talks about the special care for the furtherance of education and economic interests of the Scheduled Tribes, Scheduled Caste, OBC and the weaker sections of society.
  • Article 337: This article regulates the special provision with respect to educational grants for the benefit of the Anglo-Indian community.
  • Article 350B: It provides for grants and offers for linguistic minorities.
  • Article 351: This article deals with the development and promotion of the Hindi language.

86th Constitutional Amendment Act

This constitutional amendment is made with regard for protecting the citizens right of education, as we know the challenges in India regarding education, so it is quite necessary for the policymakers of this country to amend the constitution and bring some changes in educational policy, so that more people in India will get the right of education, and transforms their lives towards a better future.

86th constitutional amendment act, 2002 brings three new changes in our constitution, for the better functioning, and to facilitate a better understanding of the right to free and compulsory education to the children age group between six to fourteen. (6-14)

These are:

  1. Insertion of new Article i.e, 21A in part III of the Indian constitution, which provides that every child has the right to free and compulsory education of equitable quality and subject to some norms and standards.
  2. Bring alteration and modification in Article 45 and substituted as the State shall endeavor to assure early childhood care and free and compulsory education for all children until they complete the age of six years.
  3. Adding the new clause, (K) under Article 51A, the result of this new fundamental duty is added which states that whosoever is a parent or guardian has a duty to furnish opportunities for education to his child or, as the case may be, ward between the age group of six to fourteen years.

Court held that the “right of a child should not confines only to free and compulsory education, but should be enhanced to have quality education without any discrimination on the basis of their economic, social and cultural background.

Judicial Approach

The State of Madras v. Shrimati Champakam Dorairajan [6], in this case the supreme court gives a landmark judgment. This judgment results in the First Amendment of the Constitution. Here the court held that providing such contradictory reservations was the reason for infringement of Article 29(2) of the Indian Constitution. Court held:

Fundamental rights are sacred and can not be a subject to abridged by any legislative or executive action or order except provided in part III. directive principles of state policy have to be uniform and should be run on a subsidiary basis related to a fundamental right. However, if there is no infringement/violation of rights conferred by part III of the Indian constitution, there can be no objection over, the state acting in accordance with the directive principles of state policy.

The observation of the right to free and compulsory education was put up in the case of Mohini Jain in 1992, which famously known as “capitation fee case”.

The questions to be observed in this case were:

  1. Is there a clause of ‘right to education’ guaranteed to the people of India provided in the Constitution? 
  2. If so, does the aspect of ‘capitation fee’ implied in the same?
  3. Whether putting of capitation fee in regard to admission to educational institutions is arbitrary, unjust, and unfair and such violates the equality clause provided in Article 14 of the Constitution?

The division bench of the Supreme Court said that the ‘right to life’ is an essential element for all those rights which the Courts must enforce as they are important to the dignified enjoyment of life. The right to education moves directly from the right to life. The right to life provided under Article 21 and the dignity of an individual life is not being achieved unless it is tossed and coupled with the right to education.

Education in India can not be a product for sale. We hold that every citizen of India has the ‘right to education’ under the Constitution. The State is under a legal obligation to formed educational institutions to enable the citizens to enjoy the right mentioned above. The State may discharge its duty through State-owned or State-recognised educational institutions. When the State Government gives grants recognition to the private educational institutions it mandates an agency to fulfill its duty given and mentioned under the Constitution. The students must be given admission to the educational institutions – whether State itself owned or State recognized in bearence of their ‘right to education’ under the Constitution. Charging capitation fee for the purpose of admission to an educational institution is a violation of a citizen’s right to education under the Constitution.

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Court also observed that the Constitution made it compulsory to give education to all its citizens. This interpretation solely would assist the people to metamorphose the objectives of political economic and social justice. And charging capitation fee of large sums by institutions of higher education is a repudiation of the right to education.

The Supreme Court observed the validity of the verdict given by the court in Mohini Jain in the case of Unnikrishnan.

The bench of five Judges by 3-2 majority partially agreed with the Mohini case decision and held that right to education is a fundamental right under Article 21 of the Constitution as it directly flows from “right to life”. As considered, the court partially overruled the Mohini Jain’s decision and observed that the right to free and compulsory education is available only to children until they complete the age of 14 years, after that the responsibility of the State to provide education is subject to the limits of its economic capacity. “Thus it is well observed by the decisions of this Court that the provisions of Part III and Part IV are complementary and supplementary in nature to each other and fundamental right means to achieve the goal inculcate in Part IV of Indian constitution, It is also observed that the fundamental rights should be established in the light of the directive principles”.

Right To Education Act, RTE 2009

Historical Background

  • 1950: Constitution of India provided under Article 45, as one of the directive principles of State policy, which states that: The State shall endeavor to provide for a period of ten years from the inception of the Constitution, for free and compulsory education for all children until they reached the age of fourteen.
  • 1968: First National Commission established for education under the supervision of Dr. Kothari and submits its reports. It introduced several far-flight changes as a uniform syllabus for both boys and girls, mathematics and science should be made as compulsory subjects and It is also proposed a common school system.
  • 1976: Constitutional amendment for making education in a concurrent subject (responsibility of central and state) was passed.
  • 1986: The National Policy on Education (NPE) supports to Common School System (CSS) and was formulated. Subsequent NPE’s endorsed CSS but it has never been implemented.
  •  1991: A book is written Myron Wiener bearing the title The Child and State in India: Child labour & Education in comparative perspective highlighting the states’ failure to swap up child labour and exploitation on child and enforce compulsory education in India.
  • 1993: The Supreme court in the case of Mohini Jain and Unnikrishnan vs State of Andhra Pradesh ruled that the right to education is a fundamental right that flows from the Right to life in Article 21 under Indian Constitution.
  • 1997: Constitutional Amendment for making Education as a fundamental right was introduced.
  • 2002: 86th Constitution Amendment takes place and insertion of Article 21A has been done, which states that “The State shall be bound to provide free and compulsory education to all children of the age group between six to fourteen years in such as a law, determine.” This 86th Amendment also brings changes in Article 45 which reads as “The state shall endeavor to dispense early childhood care and free education for all children until they reached the age of 6 years”. And also added a new fundamental duty under Article 51A(K).
  • 2005: CABE committee report established to draft the Right to Education Bill submits its report.
  • Every time a new phase or version was placed until it was presented in Parliament in 2008.
  • The bill was approved by the cabinet members on 2 July 2009.
  • Lok Sabha passed the bill on 4 august 2009 and the Rajya Sabha on 20 July 2009.
  • It received President assent and was conferred as the law on 3 Sept 2009 as The Children’s Right to Free and Compulsory Education Act RTE, 2009. 

After many schedules of meetings, drafting and redrafting the right to education act was made which is a genuine instrument to full fill the basic demand and securing social justice for every child. This policy work on 4A’s which tells about what education means to them and their present situation in the context of this ideology.

Availability – In that sense education is free and the government is bound to fund the education and expert teachers in his/her subject and well qualified are there and sufficient infrastructure able to support educational framework.

Accessibility – Means the education is for all, there is no sense of discrimination especially to support the weaker section of the society.

Acceptability – That the value of education is appropriate, there is no discriminatory and culturally acceptable, and subject to some quality; that the school place which is harmless and teachers are well qualified.

Adaptability – That education dynamic and develop with the changing needs of society and its people and contribute to overcome the inequalities, such as sex discrimination.

Main features of the Right to Education Act 

  • Compulsory and absolutely free education to all children of India, between the age group of 6 to 14.
  • No child shall be put off, expelled and scold or required to pass a board examination until he reached up to elementary education.
  • If a child above the age of 6 years has not been admitted to any school or may not complete his or her elementary education, then he or she shall be admitted to a class which is according to his or her age. However, if the case may be where a child supposed to be admitted in a class according to his or her age, then, in order to comparison with others, he or she shall have a right to receive special training and special care within such time limits as may be prescribed. Provided further that a child so admitted must have the right to elementary education and guaranteed free education till he/she completes the elementary education even after he/she reached the age of 14 years.
  • Proof of age to take admission: For admission to elementary education, the age of a child shall be determined on the basis of the birth certificate issued in accordance with the Provisions of Birth. Marriages and death Registration Act 1856, or on the basis of such other documents as may be provided in the annexure. however, no child shall be left out for admission in a school for lack of age proof or other documents.
  • When a child who completes his/her elementary education shall be given a certificate
  • Call needs and attendance need to be taken for a fixed student-teacher ratio.
  • Twenty-five percent reservation for economically disadvantaged and weaker communities in admission to Class I in all private schools is to be compulsory.
  • Improvement in the quality of education should be dynamic and important.
  • School teachers will need adequate professional degree within five years or not fulfill the condition might lose the job.
  • School infrastructure (if there is a problem) need to be improved in every 3 years, else recognition to that particular school will be canceled.
  • The Financial burden will be shared between the central and the state government as an educational subject comes under the concurrent list.

RTE Amendment Bills

  • The Parliament has given its assent for the Right of Children to Free and Compulsory Education (Amendment) Bill, 2018.

The amendment bill does away with the no-detention policy mentioned in the law. Prior to this a child can not be held back or detained until he completes his elementary education. But after the amendment its depend on the state to continue the policy of non-detention or not.

Or the state may conduct the examinations either at the end of the 5th class or 8th class or both. The Student who failed in the examination will be given instruction and opportunity provided to appear for re-examination as per prescribe 2 months after the declaration of result.

  • The Right to free and compulsory education to children (Amendment) Bill, 2017. The Bill provides to amend the Right of Children to Free and Compulsory Education Act (RTE), 2009 to extend the last date for teachers to acquire the prescribed minimum qualifications for the purpose of the appointment.

Unqualified and untrained elementary teachers to complete their training and ensure that all teachers at the elementary level have a certain minimum standard of qualification. It will help to ensure that all teachers have minimum qualifications as deemed necessary to maintain the standard of teaching quality.

Challenges for the implementation of the RTE Act

  • The issue to share the burden 

This act made accountable to state and local bodies for its implementation. State tells that the local bodies are not sufficiently in its financial capacity to cover all the school bought under universal education. In that case, a center that holds most of the revenue tax has to support the state. The Anil Bordia Committee was set up by the HRD ministry to harmonize Sarva Shiksha Abhiyan and RTE Act. And the committee asked to look into the requirements of funds. Initially estimated that 1,71,000 crore required to implement the Act for the next five years. The committee argued for central it is a higher financial burden and it should be a 50:45 sharing ratio for the current year and 50:50 (2011-12). This seems very unrealistic for the state as the state should have to double their allocations. However, in April 2010 central agree to share the funding in raion 65:35 between center and state and a ratio of 90:10 in the matter of north-east state.

  • RTE challenged by private schools

Right to education define school under aided by Government funds or by local bodies not aided by Government and school authorities.

this impliedly means private schools also comes under this act and mandate for all to hold up 25% seats for economically weaker section children and for reservation merit. By posing this rule, affect the business of private school and violates fundamental right provided under Article 19 1(G). But 19 (6) mandates the above article and which says that nothing in sub-clause (g) of the said clause shall affect the course of any operational law in so far as it imposes, or restrict the State from making any law imposing, in the contradiction interests of the general public, reasonable restrictions on the exercise of the right conferred. RTE was challenged before the Supreme Court as an unconstitutional infringement on the rights of private and minority schools.

On 12 April 2012, a three-judge bench of the Supreme Court gives its judgment by a majority of 2-1. Chief Justice SH Kapadia and Justice Swatanter Kumar held that providing such reservations is not illegal and unconstitutional, but observed that the Act will not be applicable to unaided private minority schools and boarding schools. However, Justice KS Radhakrishnan dissented with the view and held that the Act can not apply to both minority and non-minority private schools which do not receive any fund or grant from the government.

Free Uniform, Books under RTE Act

Each and every child from class 1st to class 8th will get the free books of course and uniform if the roadmap prepared by the central to implement the right to education act and the same accepted by the state.

Meeting of state education secretaries held recently and some given below point tabled:

  • About 7.8 lakhs additional classrooms and 7lakhs girls toilet have to be created for the implementation of this act. And the government will spend 1.71 lakh crore for the next five years to implement this law.
  • Every child will be provided by uniforms @ 400 per annum, and some states provide the uniforms from their budget. It is mandated that the uniform will be provided by the state government.
  • Every child has to given free textbooks and the child having special care will get 3000 per annum for inclusive education and disabled students for the home-based study will get Rs. 10,000 per annum.
  • Rs. 1.71lakh crore will be spent on infrastructure and for the training of untrained teachers, teachers’ salaries and civil work depend on 28% and 24% respectively.
  • A Requirement of additional 5.1 lakh teachers to bear the rate of pupil-teacher ratio.
  • Nearly about 27,000 kaccha school building upgrades.
  • 17% will be spent on child requirements, and 9% will be spent on special training for children out of school. And for requirements of school, it will be maintained by 8% and for inclusive education, 6% set aside.
  • RTE mandates free from barrier education to all children irrespective of caste, sex, and religion with special needs and one classroom per teacher.

Suggestions for making RTE effective

  1. The scope of the Right to Education act should not be limited to the age of 14 years it should be extended to the secondary level also. The government should make some modifications like introducing diplomas/degrees/courses with specialization in IT, software mobile communication, media, entertainment, telecommunication, automobile, construction or need of the requirement.
  2. CSS ( Common School System) was an important step and go hand in hand for attaining equality decades ago, however now it must be changed into MSS (Model school system) based on the dynamic nature and demands of the society where education should be provided free of cost and on joint venture with private institute patterns.
  3. Parents need to play a ruthful role in making RTE policy to be a success in India and, for this regards government mandate this as a fundamental duty of guardians and parents. Moreover, it can be done only by motivating them through counseling and guidance, and they must be made alarming about the RTE Act through media, pamphlets campaigns, hoardings, rallies, etc. only then we can aware all people about the importance of education and should expect that our future generations will be well educated.
  4. Schemes like mid-day meal, SSA, RMSA accompanied by the world organization like UNICEF are playing an important role in increasing the massive enrollment ratio. By securing beginning and basic education to Indian children. However these international and national agencies should more be focused over weaker sections of the society, economically backward, females and highly populous states of India, these states should be a topmost priority to improve the quality of this act.
  5. Most importantly local authorities and governing bodies should get involved so as to ensure the enrolment of the newborn babies and their record should be sent to a neighborhood school. After that school authorities take care and follow up the child and sent the information for registration and admission to his/her parents without any delays.
  6. The Provision regarding severe punishment for the abusement of this act should be made out and the responsibilities of the central government, state government, teachers, parents, and administrators, Owners of the school, have to be fixed. It should be made necessary for all the government employees; whether working under state or center or person working under center or state-funded agency, should send their children in government or in government-aided institutes for the promotion of these schools.

RTE Available only form class 1st to 8th

The Most fundamental drawback of the RTE Act is that it only covers children’s age group for up to fourteen years. What for the children who are above then fourteen years of age? What about the student who wants to pursue higher education, forget about higher education what if the child after 8th standard do if he/she is not able to afford education. However, the government did well in this regard and adopted the system of baseline test every 2 or 3 months so to check the student’s knowledge. This system is borrowed from the USA program called no child left behind. So as to find out the interest of a child what he/she does, once the elementary education completes.

Objects of RTE

  • As RTE drafted to provide free and compulsory education to every child of this country so as to know one left behind to get social justice.
  • As the statistics tell us that the rate of literacy in India is increasing very low so to boost up and made India as a developed economy there must be an enhancement of literacy level.
  • To provide assistance to the weaker and economically backward class so they also have some social transformation.
  • As the right to education is a basic human right so to ensure this, RTE mandates the educational structure of the country.
  • As studies show that there is huge sex discrimination in education, girls will not be allowed to study further due to her expense of marriage, but after making education free and compulsory the ratio gap is covered to some extent.
  • Children with disability treat as worthless as their parents find them as a burden but disability comes with talent and government by this act provide grievances to those children who are disabled, and give them assistance and 10,000 per annum, so that they will also have life.
  • Through this act people aware of the importance of education in one’s life to mark up their performance towards a better future.
  • RTE, fundamentally aims that in India no child is deprived of having the right to education, as education plays an important role so if you invest in it today the interest over it will be handsome in the future.

Conclusion

Generally, education covers 5% of the GDP of any country to support their social transformation. Education is a key to grow finer or one step ahead who is not educated. Education is a powerful tool to provide an opportunity for a human being to develop to the fullest. for the advancement and promotion of the right to education UN human declaration, many more conventions mention about right to education. UNICEF, UNESCO and AMNESTY international organization made tremendous efforts to promote education right to education worldwide. After adopting the right to education India becomes the 135th country to have this law.

Parliament of India through an 86th constitutional amendment made the right to education as a fundamental right under Article 21-A . and for better formulation of the educational framework also enacted an act that is right to the education act. Which provide free and compulsory education to children age group 6-14. And have some features which mandate state and local bodies to provide a right to education to every child of this country and if not, they all are accountable for that. The rate of literacy is still under construction so in order to make this rate on increasing then there should be more act and ordinance of right to education will be accompanied. Then only India can transform into a developing nation, and will never set back as the citizens are educated.

right to education of child
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References

  1. 1992 AIR 1858, 1992 SCR (3) 658
  2. 1993 AIR 2178, 1993 SCR (1) 594
  3. 1991 SCALE (1)187
  4. (1997) 10 SCC 549
  5. https://indiankanoon.org/doc/48937/
  6. AIR 1951 SC 226
  7. https://www.lawctopus.com/academike/right-education-india/

     

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Conjugal Rights

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This article is written by Shivani Verma, a student of Guru Gobind Singh Indraprastha University, New Delhi. In this article, she has discussed the principle of conjugal rights, its prerequisites, history, conjugal rights of husband and wife and its constitutional validity. 

Introduction

One of the basic requisites of marriage is that the husband and wife should live together and respect each other’s mutual rights. Both husband and wife have some mutual obligations towards each other which can not be ignored come what may. This is a distinctive feature of a conjugal relationship. In no other relationship, right to society exists. The expression “conjugal rights” signify two ideas:

  • The right of the couple to have each other’s society.
  • The right to marital intercourse.

According to Manu, “Let mutual fidelity continue till death. Let a man and woman united by marriage, constantly beware, lest at any time disunited they violate their mutual fidelity.” This is the only positive remedy under the Hindu Marriage Act,1955 while other reliefs tend to weaken the marriage.

Conjugal meaning

The term “conjugal” means “matrimonial”. It refers to the relationship between a married couple. Conjugal rights are matrimonial rights of both of the spouses. One spouse is entitled to the society, comfort and consortium of each other. The expression “Restitution of conjugal rights” means the restoration of matrimonial rights. Provisions regarding restitution of conjugal rights are provided in various Personal Laws such as:

  1. Section 9, Hindu Marriage Act, 1955
  2. Section 22, Special Marriage Act, 1954
  3. Section 32, Indian Divorce Act, 1869
  4. Section 36, The Parsi Marriage and Divorce Act, 1936

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Prerequisites for grant of Restitution of Conjugal Rights

To obtain a decree of restitution of conjugal rights, the petitioner has to prove that:

  1. From the society of the petitioner, the respondent has withdrawn.
  2. The withdrawal by the respondent is without any reasonable excuse.
  3. The court is satisfied with the fact that the statements made in the petition are true.
  4. There is no legal ground for refusing to grant application.
  5. Then the court may direct the respondent party, to live with the petitioner.

Withdrawn from society

It means withdrawal from all types of conjugal relationships. It includes:

  1. Refusal to stay together,
  2. Refusal to give comfort to each other,
  3. Refusal to have marital intercourse, or
  4. Refusal to discharge matrimonial obligations.

In Zavari vs. Zavari[1], the court held that in the petition of restitution of conjugal rights if the aggrieved spouse proves the withdrawal from the society by the defendant, the defending spouse must prove that he/she had a reasonable excuse to withdraw from the society in the court only then the decree of restitution of conjugal rights must be granted. When the husband persuades wife to come back from her parents home, stay with him and to resume marital life by writing letters and she is not ready to live with her husband because of the intimidating contents mentioned in the letter then the court will consider such letters to be harmless documents.

Without Any Reasonable Excuse 

Without any reasonable excuse includes:

  1. High standard of living is not maintained by husband,
  2. The husband refuses to live with her in her paternal place, or
  3. There is an agreement between the parties(ante-nuptial/postnuptial) and it is opposed to the public policy etc.

In the case of Shanti Nigam vs. Ramesh Chandra[2], the court observed that withdrawal from the society of the husband may be physical but without any intention to leave his company. So as long as wife completely cut herself and decided not to go to her husband and she breaks all marital ties with him then it will be a ground for a decree of restitution of conjugal rights. Refusal to quit the job at the instance of the husband is not a ground for a decree of restitution of conjugal rights. The court also said that it will not follow the old concept and rules, its decision will be based on considering the present-day situations..

Effect of the Decree of Restitution of Conjugal Rights

If the decree of restitution of conjugal rights is passed by the court than it is compulsory for the respondent to resume cohabitation with the plaintiff and if the respondent fails to do so within one year then it can act as a ground for divorce for the plaintiff.

In the case of Sushil Kumari Dang vs. Prem Kumar[3], the appeal of a wife against the decree of restitution of conjugal rights was allowed by the court. The husband filed a petition for restitution of conjugal rights because the wife has left his matrimonial home against his wish and consent and is living separately and she is not ready to come back. But the court through facts and circumstances of the case found that the intention of the husband behind this petition is not genuine. So the court allowed the appeal of the wife.

In Shanti Devi vs. Balbir Singh[4], the court provided the requirements for filing the petition for restitution of conjugal rights. The court said that it has to be seen whether one spouse has withdrawn from the society of the other without any reasonable excuse. The second requirement is that the court must be satisfied with the facts mentioned in the petition. And at last, there should be no legal ground for rejecting the petition. But if the husband is having a love affair with a girl, or his behaviour towards his wife is torturesome than these will be considered as reasonable excuses.  

Resumption of Cohabitation

The petition for restitution of conjugal rights is not maintainable if the parties resumed the cohabitation. There can be a resumption of cohabitation by resuming to sexual intercourse in case their circumstances prove that setting up of a new matrimonial home is not possible. But it depends upon the intention of the parties. Mere acts of sexual intercourse will not be proof that the parties have resumed cohabitation.

If a spouse has withdrawn and later made several attempts to resume cohabitation with a bona fide intention and the other spouse refused, then, in this case, it was held that the spouse who initially withdrew from the society was entitled to the decree of restitution of conjugal rights as his/her original wrong was rectified by the bona fide offers made by him/her to resume cohabitation. The offer must be with a bona fide intention if such intention is not there than there can be no question of resumption of cohabitation.

Matrimonial Rights

Several rights and duties that start from the day husband and wife get married. Those rights and duties are known as “matrimonial rights”. After marriage, a wife has to leave her home and adjust with the new surroundings. In order to protect her from the various atrocities that she may face, various matrimonial rights are provided to her, such as:

  1. Right to streedhan: wife has a right over all the streedhan she gets before and after her marriage. Streedhan is the property or gifts that are made to a woman before, during or after her marriage on which she has complete possession. 
  2. Right to residence: wife has a right to stay in the matrimonial home where she shares the society of her husband.
  3. Right to a committed relationship: wife has a right to have a committed relationship, disloyalty on any ground from her husband’s side will be punishable by a court.
  4. Right to live with dignity and respect: she must be treated with respect and must live with the same dignity as all other people in the house.
  5. Right to maintenance by the husband: a husband must provide maintenance and financial support to her.
  6. Right to child maintenance: in case of a minor child, the husband is responsible to maintain and provide financial support to the child.

In Swaraj Garg vs. K.M Garg[5], the court held that if a husband and wife are gainfully employed and the wife is earning more than the husband, then there are sufficient reasons for the wife to live separately. So, in this case, the court didn’t grant the petition for restitution of conjugal rights in favour of the husband. The court also said that there is nothing in Hindu Law saying that the wife has no right in choosing the place of a matrimonial home.

judicial separation

Judicial Separation

Instead of a divorce, if the parties are willing to give each other some time and don’t want to seek immediate dissolution of marriage then the remedy of judicial separation is asked for. It does not affect the legality of the marriage. It is a temporary suspension of marital rights between the spouses.

The Hindu Marriage Act,1955 provides the provision for judicial separation under section 10. If the cohabitation between the spouses didn’t resume for one year or more the decree of judicial separation act as a ground for divorce.

Section 10(1) states that the parties to a marriage solemnized before or after commencement of the Hindu Marriage Act,1955 may present a petition in order to obtain a decree of judicial separation on any of the grounds mentioned in Section 13(1), and the wife can also seek divorce on the grounds mentioned in Section 13(2).

In section 10(2) it is mentioned that after obtaining a decree of judicial separation, it is not obligatory for the parties to cohabit together but the court may revoke the decree if it finds it reasonable to do so.

Grounds For Judicial Separation

Following are the grounds for judicial separation –

  1. Adultery towards the spouse: If a party had voluntary sexual intercourse with a person other than his/her spouse, then it can act as a ground for judicial separation for the other spouse.
  2. Cruelty towards the spouse: When the petitioner is treated with cruelty, then the petitioner can claim the decree of judicial separation. 
  3. Desertion by the spouse: If one spouse deserts the other without a proper excuse, without his/her consent for a continuous period of two years then the neglected spouse can seek judicial separation on this ground. 
  4. Unsoundness of mind of the spouse: In order to get a decree of judicial separation a petitioner has to prove that the respondent has been incurable of unsound mind and the petitioner cannot be expected to live with the respondent.
  5. Attempting to Convert one party to another religion: If one spouse converts him/her into another religion then it can act as a ground for judicial separation for the non-converting spouse.
  6. Any of the parties are suffering from virulent and incurable leprosy: If one spouse is suffering from a virulent or incurable form of leprosy then the other spouse can file a petition for judicial separation on this ground.
  7. Any of the parties are suffering from the venereal disease: If the respondent has been suffering from venereal disease in a communicable form then the petitioner can seek a decree of divorce on this ground.
  8. If any spouse Renounce the world: If a spouse renounce the world, and before that he/she was married then the other spouse has a right to seek judicial separation.
  9. If the spouse is missing from a continuous period of 7 years: If the spouse is missing for a continuous period of seven years and there is no information about the missing spouse from his near and dear ones then the petitioner can seek divorce.

Additional Grounds for Wife To Claim Judicial Separation

A wife can seek divorce on the grounds not only mentioned in Section 13(1) but also on the grounds mentioned Section 13(2).

Following are the grounds that are mentioned in section 13(2) –

  1. Bigamy: Wife can claim a decree of judicial separation in case of bigamy, if she proves that that respondent-husband had married again before the commencement of this act and his other wife was alive at the time of the presentation of the petition.
  2. Rape, sodomy, bestiality: If the husband is guilty of rape, sodomy, bestiality than the wife can seek judicial separation on this ground.
  3. Non-resumption of cohabitation after the order of maintenance: If the cohabitation between the parties has not been resumed for a period of one year or more since the passing of the decree of maintenance under section 18 of the Hindu Adoption and Maintenance Act, 1956 or under section 125 of CrPC against the husband, then the wife can seek judicial separation on this ground.
  4. Repudiation of marriage (at the option of puberty): If a girl is married before attaining the age of fifteen years then she can repudiate her marriage after attaining the age of fifteen years and after attaining the age of twenty years. 

Effects of an Order of Judicial Separation

Following are the effects of an order of judicial separation –

  1. The marriage is not dissolved in this case.
  2. There is no compulsion for the spouses to live together or eat together as judicial separation is separation from bed to board.
  3. After the decree, it is not necessary for the parties to cohabit together.
  4. The parties can resume cohabitation with each other without undergoing the ceremony of marriage.
  5. If either of the spouses marries during the period of the decree, then he/she will be liable for bigamy.
  6. The wife is considered as independent women from the date of decree till separation.
  7. The petitioner
    1. If she is the wife, becomes entitled to alimony from the husband, and
    2. If he is the husband, he may claim maintenance from wife under section 25 of the Hindu Marriage Act,1955.

History of Conjugal Rights

Evolution of conjugal rights is different in various countries. To establish a comparison, we will first be looking at the development of conjugal rights in English Law, Canada and Australia. After that, we will try and understand the history of conjugal rights in India and how it has changed over the years.

English Law

Earlier in English Law, the decree of restitution of conjugal rights was provided by ecclesiastical courts that were known as Court Christian or Court Spiritual. Later the decree was obtained through the Court for Divorce and Matrimonial Causes.

Before 1813, matrimonial offences did not include desertion in it, so a deserted spouse could ask for the remedy of restitution of conjugal rights. Once the decree was provided, the spouse had to return home and continue with his/her marital obligations. If one did not comply with the decree than he/she was punished with excommunication.

Following Acts were prevalent are as follows: 

  1. The Ecclesiastical Courts Act,1813 replaced the punishment of excommunication with imprisonment up to six months.
  2. The Matrimonial Causes Act,1923 provides that the wives no longer needed to ask for a decree of conjugal rights on the ground of cruelty alone instead she was given the right to divorce her husband. This equalized the grounds for divorce for both husband and wife. 
  3. Supreme Court of Judicature(Consolidation) Act, 1925 repealed the Matrimonial Causes Act, 1925. Failure to comply with the order of conjugal rights would not be considered as desertion and will continue to be a ground for judicial separation. New provisions were also made by the act for finances, alimony that has to be provided by the husband to the wife, related to the share of property between husband and wife and the custody of children.
  4. The Matrimonial Proceedings and Property Act 1970(Abolition Act) abolished the action of conjugal rights as it was seen as an outdated action.

Canada

Restitution of conjugal rights has been a part of the law in Canada because traditionally Canadian family regulations were based upon concepts already existing in English Common Law except in Quebec. The legal action of restitution was abolished in Britsh Columbia by the Family Relations Act, R.S.B.C.1979 and through several other provisions.

In Alberta, the Family Law Act, 2005 abolished the action of restitution of conjugal rights. Moreover, the law has never been strict in Alberta. In fact, if the spouse does not comply with the degree, it serves as a ground for judicial separation.

In Saskatchewan, by repealing the section based on the restitution of conjugal rights it completely abolished the concept through the Family Maintenance Act, SS 1990-91.

In Nova Scotia, Matrimonial Statutes Repeal Act repealed six legislations, some of them referred to restitution of conjugal rights in the year 2012.

In New Brunswick, the legislation which included restitution of conjugal rights was repealed by “Act to Repeal the Divorce Act”.

Australia

Courts have no power to make a decree for restitution of conjugal rights as it was abolished by the Family Law Act, 1975. Section 114(2) of the Family Law Act, 1975 provided that the court can order a party to provide for conjugal rights or marital services. But it was last used in 1978 and has now become obsolete. This was also supported by the Australian Law Commission in 2010 which was in favour of this view and said that Section 114(2) is inconsistent with the principles of Family Law so it should be abolished.

India

Indian laws borrowed the principle of restitution of conjugal rights from the English law. These rights were borrowed from various colonies of England. For all the religious communities, due to the absence of any statutory law, the Indian law passed the order for restitution of conjugal rights.

The first time this principle was applied in India in 1886 in the case of Moonshee Bazloor vs. Shamsoonaissa Begum by the Privy Council. The importance of this principle was clearly laid down in the 71st Law Commission Report. This report provides that divorce and getting separated is the only solution, marriage is a sacramental tie and efforts should be made for reconciliation rather than breaking the tie completely. 

Conjugal Rights of husband

Post marriage, husband and wife must live together. If in any circumstances the wife denies to stay with the husband and withdraws from his society without any reasonable excuse than the husband may file a petition for restitution of conjugal rights. If the court is satisfied and there is no legal bar to it, then the petition is granted.

Restitution of Conjugal Rights filed by the wife

In case, if husband withdraws from the society of wife, and denies to obey any matrimonial duty and deny to perform any matrimonial rights and that too without giving any proper excuse the wife may claim the right of restitution of conjugal rights by filing a petition in the court.

During this period can the wife claim maintenance?

Maintenance is provided to either of the spouses in case if he/she is not able to maintain themselves or they are not financially independent enough to earn a living for themselves.

Yes, the wife can claim maintenance under Section 25 of Hindu Marriage Act,1955. If the decree is not obeyed then the court may attach the properties of the husband. It is also applicable to the provision of judicial separation. Moreover, if the decree is not obeyed for a period of more than one year than it is considered as a ground for divorce.

Also, Section 18 of the Hindu Adoption and Maintenance Act,1956 provides the grounds under which wife can claim maintenance and the grounds where she cannot claim maintenance. 

Wife denying husband Conjugal Rights

If the wife denies to enjoy the conjugal rights or withdraws from the society without any reasonable cause, then the husband can file a suit for restitution of conjugal rights.

Reasonable Cause

A reasonable cause could be any act that will make impossible for the wife to live with the husband. If the court is satisfied that the ground is a reasonable one, then the court will dismiss the petition otherwise it will pass a decree in favour of the husband. 

The burden of proof lies on both the parties i.e. husband as well as wife.

  1. Petitioner: husband needs to prove that the wife has withdrawn from his society.
  2. Respondent: wife has to show a reasonable cause for doing so.

Circumstances under which withdrawal from the society of husband is justified

  1. When husband remarries: in case the husband remarries when the first wife is still alive, then he loses the right of restitution of conjugal rights for the second wife and it is a valid ground for the wife to withdraw from the society of husband.
  2. When conduct of the husband makes it impossible for the wife to live with the husband: In the case of Moonshi Buzloor Ruheem v. Shamsonnissa Begum[6], it was held that if a husband treats wife with cruelty or there is gross negligence on the part of husband for performance of marital obligations, then it is the valid ground for refusing him relief.
  3. In case, if the wife is living separately due to a different place of work: when the economic considerations require the wife to take up the job because it is necessary for the upkeep of the family.
  4. In case, if there is no economic necessity for the wife to take a job and live separately, this was decided by the court in the case of Smt. Kailash Wati v. Ayodhia Prakash[7], in three parts-
    1. If the wife is already working before and at the time of marriage, then it does not give the husband a right not to share his matrimonial home with her.
    2. If the husband himself encourages the wife to take up employment after marriage then the husband cannot give up his right to live with his wife.
    3. But if the wife takes up employment against the wishes of her husband then it is the case of unreasonable withdrawal.

Constitutional validity

The constitutional validity of section 9 of the Hindu Marriage Act,1955 has always been a matter of debate. It has been discussed in three landmarks and most important cases.

  1. In 1983-1984, the High Court of Andhra Pradesh in T.Sareetha vs. T.Venkatta Subbaiah [8], observed that the decree of restitution of conjugal rights is uncivilized, barbarous, an engine of oppression and assailed. It is the grossest form of violation Article 14, 19 and 21 of the Constitution as it denies women her free choice as to whether, when and how she is to become a vehicle of procreation of another human being. The court also said that since it did not serve any social good, it must be held to be arbitrary and void offending Article 14 of the Indian Constitution.
  2. The Delhi High Court, in Harvinder Kaur vs. Harmandar Singh[9] case not only upheld the validity but also discussed its advantages. He observed that the purpose behind the decree of restitution of conjugal rights is cohabitation and consortium and not only sexual intercourse, so there is nothing barbarous or coercive about it. It aims at stabilising a marriage and encouraging reconciliation.
  3. The debate on the constitutional validity of Section 9 was settled by the Supreme Court in the case of Saroj Rani vs.Sudarshan Kumar[10]. The court overruled the judgment of Andhra Pradesh High Court and said that Section 9 of the Hindu Marriage Act, 1955 is not violating Article 14, 19 and 21 of the Constitution. In fact, it serves a social purpose by preventing breakup in a marriage. In case the order is disobeyed then the court has no right to enforce sexual intercourse between the spouses and if the parties don’t resume to cohabitation after one year of the passing of such decree then they can obtain a divorce on this ground alone.

The idea behind providing for restitution of Conjugal Rights

As marriage is considered a sacramental tie, in Hindu Shastra it is believed that a man is incomplete without his wife and they both need the company to provide support to each other. The idea behind is to preserve the marriage tie as far as possible through court intervention and ask the withdrawing party to join the other party.

Restitution of Conjugal Rights judgements

In the case of Rukmani Ammal vs. T.R.S.Chari[11], Pandrang Rao, J. held that for husband in order to obtain a decree of restitution of conjugal rights it is not necessary that actual cruelty must be established. Hindu Law is silent on the point that whether the husband has a right to seek the help of the court in securing the company of his wife. Hindu law does not consider a suit for restitution of conjugal rights proper. It was also held that whether the husband is entitled to the decree of restitution of conjugal rights must be provided after considering all the facts, equitable relief and equitable consideration must be sought.

In the case of Seetha yamma vs. Venkataramma[12], it was held by Bum, J. that in a suit for restitution of conjugal rights the court will consider the entire conduct of the parties and if it has been proved that the husband has neglected his wife and the suit instituted by the husband is not with a bona fide intention then the suit will be dismissed. It is not obligatory for a wife to prove that she has been subjected to violence by the husband in order to seek the decree for separate maintenance.

Qualifying criteria

When either of the spouses files the petition for restitution of conjugal rights, then he/she has to fulfil the basic criteria. The grounds on which the petition is filed are:

  1.  A valid marriage must be there. 
  2. The spouses are not staying with each other.
  3. The withdrawal of one party from the society of the other should be without any reasonable cause.
  4. The petitioner must have a bona fide desire to live with the spouse.

The complaint of restitution of conjugal rights is entertained by the Civil Courts in whose jurisdiction the following was performed.

  1. The marriage of the parties was performed.
  2. Husband and wife stay together.
  3. Husband and wife last stayed.

What the aggrieved party can do? 

The aggrieved party can file a petition in the district court. When the court finds out that the plea of the aggrieved party is based on true facts and they have no valid reason to dismiss it then the court passes the decree of restitution of conjugal rights in the aggrieved party’s favour.

Grounds for Rejection

The petition for restitution of conjugal can be rejected on the following grounds:

  1. Any matrimonial relief can be provided to the respondent.
  2. For the purpose of employment, the couple needs to stay separately.
  3. If the action of the petitioner is not favourable for a marital relationship.
  4. Confession made by the petitioner relating to marital misconduct on his part.

Restitution of Conjugal Rights and Divorce

The merging of a petition for divorce and restitution of conjugal rights is still under discussion. Some of the eminent jurisdictional powers are of the view that the petition for conjugal rights can be supported with an alternative prayer for divorce.

While some of them are of the view that the prayer for divorce and conjugal rights are of different nature and cannot be made together. 

Most of them agree on the point that the petitions are mutually destructive as conjugal rights on reuniting the parties rather than separating them and it is the only positive remedy in the Hindu Marriage Act 1955, other remedy tries to disrupt the marriage.

muslim conjugal rights

Conjugal Rights in Islam

In Islamic law, it was observed that whenever the wife tries to file the suit for maintenance under section 2(ii) of Dissolution of Muslim marriages Act,1939  the husband used to counter it by filing the suit for restitution of conjugal rights. This makes the study of restitution of conjugal rights in Islamic law important.

What “Right to Conjugal Rights” Legally Means? 

According to Tyabji, “When either of the spouses withdraw from the society of another without any reasonable excuse, the aggrieved party may apply by filing a petition for a decree of restitution of conjugal rights and if the court has no valid reason to reject the petition then the court may order the decree in favour of petitioner”.

It has the same meaning as provided in Hindu Law, restoration or marital relationship between husband and wife. But this right is available to the husband only because the husband can frustrate the wife’s petition for restitution of conjugal rights by pronouncing the decree for divorce. And another main reason behind it is that the suit for restitution of conjugal rights is filed by husband in most of the cases.

Origin of Right to Conjugal Rights 

The Holy Quran under Islamic Law provides the husband with the right to keep their wives with kindness and they can part with them but with equal consideration. The husband has a reasonable right over his wife and not absolute. Husband has no conjugal rights if he had not paid the dower money

  1. Prompt dower: If the husband fails to pay prompt dower the can refuse to live with him until the dower is paid. This right continues even if the marriage is consummated.
  2. Deferrable dower: The husband gets the conjugal rights when the whole dower is paid as in case of deferrable dower the whole dower is regarded as prompt.

The doctrine of restitution of conjugal rights was made available to Muslims, Hindus, Christians, Parsis and others in Colonial India. With the increase of women empowerment due to the Dissolution of Muslim Marriage Act 1939, in order to counter it, the husband used this doctrine.

The Privy Council laid down in the case of Moonshee Bulzoor Ruheem vs. Shumsoonissa Begum that marriage is a civil contract under Mohammedan law and the court has the power to enforce all the rights and duties which flow from it.

In the case of Abdul Kadir vs. Salima[13], the Allahabad High Court observed that the concept of restitution of conjugal rights must be based on principles of Muslim Law rather than the principle of justice, equity and good conscience. It also stated that the remedy of English ecclesiastical law, right to restitution of conjugal rights became a remedy for breach of marriage because the matrimonial relationship was being a civil contract. 

Right to Restitution of Conjugal Rights Available to Muslims

  1. In India, under General laws.
  2. In Pakistan, Family courts have exclusive jurisdiction to entertain its suit under section 5 of the West Pakistan Family Courts Act,1964.

Islamicity of the Right of Restitution of Conjugal Rights 

The Islamic personal law instructs the husband to keep the wife with kindness while aiming at preserving the marriage. When the husband is found guilty of gross cruelty towards his wife and deserts her on this account, he will not be allowed to get the relief of restitution of conjugal rights. This was the restriction that was put on the husband’s right to seek the decree of restitution of conjugal rights.

Muslim law provides a defence to the wife so that she can frustrate the husband’s suit for restitution

  1. Non- payment of dower.
  2. Cruelty: It includes both legal and physical cruelty
    1. Physical cruelty: actual violence is included which causes injury to life, limb or health or causes a reasonable apprehension thereof.
    2. Legal cruelty: It includes all the instances of cruelty stated in Section 2(viii) of the Dissolution of Muslim Marriage Act,1939. 

Other Defences 

  1. If the marriage is performed during the iddat period.
  2. If the law is satisfied with the reasons of wife for not living with the husband.
  3. Irregularity of marriage.
  4. If there is no harmony and happiness between the spouses the Islam permits separation.

Section 5 of the West Pakistan Family Courts Act,1964

  1. If the husband gets the decree of restitution of conjugal rights then according to Order XXI, Rule 32 and 33 of the Code of Civil Procedure the court can attach wife’s property or can order her to make periodic payments to the husband for non- compliance with the decree.
  2. This section was challenged in the case of Nadeem Siddiqui vs. Islamic Republic of Pakistan[14] as it was against the injunctions of Islam.
    1. The court held that there are cases in which it is impossible for the husband and wife to live together so in that case, the court passes the decree of divorce.
    2. Also, there is no Verse or Hadith which put a bar on the Family Court from passing the decree of restitution of conjugal rights.
    3. Hence, it is not against the injunctions of Islam.
    4. Decree of the court has much sanctity in Islam and Rule 32 and 33 of the Code of Civil Procedure gives to the decree of the court.

The laws of Pakistan has no power to force the wife to go to the house of the husband in order to comply with the decree passed in favour of the husband. Right to seek conjugal rights were brought as a countermeasure because of the certain grounds present under the Dissolution of Marriage Act,1939 which allow women to seek dissolution of marriage. Before British Raj, in Islamic Personal Law after the payment of dower, there was no concept of restitution of conjugal rights.

Restitution of conjugal rights is a highly debatable topic because it has a two-fold view, first is that it is a positive remedy that provides marriage with a second chance, another one is that it forces two unwanted people to live together. Before using this remedy each and every aspect of the case must be considered so that it doesn’t get misused.

restitution of conjugal right

Draft petition for restitution of Conjugal Rights

BEFORE THE METROPOLITAN MAGISTRATE

KARKARDOOMA DISTRICT COURT, NEW DELHI

PETITION NO. _______/ 2019

In the Matter of:

ABC                                                                                                            ….Petitioner  

Vs.

XYZ                                                                                                         ..Respondent

 U/S 9 of HMA

MEMO OF PARTIES

ABC

S/o JKL,

R/o A – 100,

Karkardooma,

New Delhi – 110096                                                                                        ….Petitioner  

   Vs.

Mansi Mehta

D/o MNO,

R/o B – 26,

Prem Nagar,

Delhi – 110094                                                                                           ….Respondent

Petitioner

Through

For PQR Advocates,

D- 44, Kapoor Building, Saket

New Delhi – 110019

Place: New Delhi

Dated: __.__.2019

 BEFORE THE METROPOLITAN MAGISTRATE

KARKARDOOMA DISTRICT COURT, NEW DELHI

PETITION NO. _______/ 2019

IN THE MATTER OF:

ABC                                                                                                        …….Petitioner  

Vs.

XYZ                                                                                                     …..Respondent

U/S 9 of HMA

APPLICATION UNDER SECTION 9 OF HINDU MARRIAGE ACT, 1955 FOR RESTITUTION OF CONJUGAL RIGHTS.

 MOST RESPECTFULLY SUBMITTED:

  1. That the instant application under Section 9 of the Hindu Marriage Act, 1955 is being filed by Petitioner for restitution of conjugal rights.
  2. That the Petitioner is ABC, S/o JKL, R/o A – 100, Karkardooma, New Delhi – 110096.
  3. That the Respondent is Petitioner’s wife, XYZ, D/o MNO, R/o B – 26, Prem Nagar, Delhi – 110094.
  4. The marriage between the Petitioner and the Respondent was solemnized on_(date)_______, in New Delhi, according to Hindu rites, rituals and ceremonies, without any demand for dowry whatsoever.
  5. That the Petitioner and the Respondent lived happily together at Petitioner’s place of residence.
  6. That when the Petitioner came back home from the office on _____ at ______, he found out that the Respondent has packed all her belongings and left the house.
  7. That after trying to contact the Respondent for an hour, the Respondent picked up the Petitioner’s call and told him that she won’t be living with him on anymore. When the Petitioner asked for a reason, the Respondent simply refused to say anything.
  8. That the Petitioner found out that the Respondent has gone back to her parent’s house and he went there to understand the problem and bring her back.
  9. That the Petitioner went to his father-in-law’s house on ________ and again on ________ to bring the Respondent back to his house; however, on one pretext or the other, the Respondent kept on declining to come along with the Petitioner to his house.
  10. That the Respondent has deserted the Petitioner or/and has withdrawn from his company without any reasonable excuse.
  11. That the Petitioner submits that he has been sincere, ready and willing to cohabit with the Respondent since the very beginning.
  12. That the cause of action for this petition first arose on _________, when the respondent voluntarily deserted the Petitioner and withdrew from his society.
  13. That this petition is filed well within the limitation period.
  14. That this petition being chargeable with a fixed rate of court fee, the same is paid herewith.
  15. The Petitioner craves liberty from this Hon’ble Court to file additional documents and arguments thereof, as and when needed, at a later stage.
  16. It is further submitted that a prima facie case exists in favour of the Petitioner.
  17. It is further stated that the Petitioner and the Respondent married and were living together in Karkardooma, New Delhi, which falls within the territorial limits of this Hon’ble Court’s jurisdiction, and therefore this Hon’ble Court has jurisdiction to entertain the instant application.
  18. This Application has been filed bona fide and therefore ought to be allowed by this Hon’ble Court.

Prayer

In the light of the above-mentioned facts and circumstances, it is most respectfully prayed that this Hon’ble Court may be pleased to:     

  1. Pass a decree for restitution of conjugal rights again the Respondent.
  2. Direct the Respondent to resume cohabitation with the Petitioner.
  3. Pass any other order(s)/direction(s) as this Hon’ble Court may deem fit and proper in the interest of justice.

Petitioner

Through

For PQR Advocates,

D- 44, Kapoor Building, Saket

New Delhi – 110019

Place: New Delhi

Dated: __.__.2019

To know more about Approach of Family Court in settling Matrimonial Disputes, please click here.

References

  1. Zavari vs.Zavari, AIR 1975 Guj 158
  2. Shanti Nigam vs. Ramesh Chandra, AIR 1971 ALL 567
  3. Sushil Kumari Dang vs. Prem Kumar, AIR 1976 Delhi 321
  4. Shanti Devi vs. Balbir Singh, AIR 1971 Delhi
  5. Swaraj Garg vs. K.M Garg, AIR 1978 Del 296
  6. Moonshi Buzloor Ruheem v. Shamsonnissa Begum, (1867) 11 MIA 551
  7. Smt. Kailash Wati v. Ayodhia Prakash, LXXIX P. L. R. 216. (1977)
  8. T.Sareetha vs. T.Venkatta Subbaiah, AIR 1983 AP. 356
  9. Harvinder Kaur vs. Harmandar Singh, AIR 1984 Delhi 66, ILR 1984 Delhi 546, 1984 RLR 187
  10. Saroj Rani vs.Sudarshan Kumar, 1984 AIR 1562, 1985 SCR (1) 303
  11.  Rukmani Ammal vs. T.R.S.Chari, AIR. 1935 Mad 616 (T)
  12. Seetha.yamma vs. Venkataramma, AIR 1940 Mad 906 (V)
  13. Abdul Kadir vs. Salima, (1886) ILR 8 All 149
  14. Nadeem Siddiqui vs. the Islamic Republic of Pakistan, PLD 2016 FSC 4

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Divorce by Mutual Consent

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This article is written by Shivani Verma, a student of Guru Gobind Singh Indraprastha University, New Delhi. In this article, she has discussed the provisions related to divorce by mutual consent, the procedure to file for mutual divorce and unilateral withdrawal of consent when the petition is already filed in the Family Court.

The Latin word “Divortium” means “to separate”. Divorce is not favoured and it is only granted in rare cases. Under uncodified Hindu Law, Manu has explained that wife, in any case, cannot be released from her husband by sale or abandonment. But the Modernist Divorce Reforms in independent India made divorce available by Section 13 of the Hindu Marriage Act, 1955 to all the Hindus. This Act has been amended several times and new grounds for divorce are included with.

What is Divorce by Mutual Consent?

When both the parties agree on the dissolution of marriage in a cordial manner which is a more harmonious way rather than fighting in a court and defaming each other. In that case, they may file a petition in a District Court under Section 13B of the Hindu Marriage Act,1955 and the Court may grant them the decree for divorce. Proceedings before Panchayat will not affect the divorce, the parties have to get it processed through Matrimonial Courts.

Section 13B: Divorce by Mutual Consent 

This provision was inserted by Marriage Law (Amendment) Act,1976 and was not originally made by the Hindu Marriage Act. Section 13B of the Hindu Marriage Act,1955 is on the same ground on which Section 28 of the Special Marriage Act,1954 is. This provision is retrospective as well as prospective from the commencement, which means that the parties whose marriage is solemnized before or after the Amending Act can seek the help of this provision in order to get a divorce.

This section explains that to seek divorce by mutual consent, the parties have to file a joint petition in a district court. For filing this petition it is important that for a period of one year or more, the parties are not living together, they have not been able to live together and they mutually agreed to take divorce and put an end to their marital relationship.

Section 13B(2) explains that the parties must wait for at least six months from the date they present the petition and before the ending of eighteen months from the date the petition is presented by the parties, they should together make a step forward to the court. After going through the case, if the court thinks that all the facts are true then it can grant the petition for divorce.

Divorce mutual consent latest judgement

Latest judgements related to divorce by mutual consent is provided in the whole article under different sub-topics such as:

    1. No waiting in mutual consent divorce

2. Can the consent be withdrawn after filing for Divorce by Mutual Consent?

When can a Divorce by Mutual Consent be filed?

The petition for divorce by Mutual Consent can be filed on the following grounds:

  1. The petition must be presented to the court jointly by both the parties.
  2. The motion before the court hearing the petition should also be by both the parties.
  3. For a period of one year, parties must be living separately.
  4. Parties are not able to live together.
  5. Parties agreed mutually that marriage must be dissolved.
  6. It is compulsory for the parties to wait for a period of six months. These six months starts from the date the parties filed a petition for divorce in the court.
  7. Concerned parties must make a motion to the court before the expiry of eighteen months from the date the petition is presented for passing a decree.
  8. Consent in the case of divorce by mutual consent should not be obtained by fraud, force or undue influence, as per the Section 23(1)(bb) of the Hindu Marriage Act,1955.

What are the different laws of Divorce by Mutual Consent?

The provision for divorce by mutual consent is presented in various personal laws such as:

Hindu Marriage Act,1955

Section 13B of The Hindu Marriage Act,1955 provides the provision for Divorce by Mutual Consent. It explains that if the parties that are living separately continuously for a period of one year and parties are not able to live together and have agreed to separate mutually then they can seek divorce by mutual consent.

The Muslim Women (Protection on Divorce) Act, 1986 and Personal Laws

According to The Muslim Women(Protection on Divorce) Act, 1986 and Personal Laws, Muslims can seek Divorce by mutual consent. There are two types of divorce by mutual consent in Muslim Personal Laws:

  1. Khulla 
  2. Mubarat 

Both under Khula and Mubarat, there is no need for giving any reason for divorce and in case of Mubarat no consideration passes from wife to her husband. So the wife (in case of Khula) or both husband and wife(in case of Mubarat) decides to separate on a no-blame basis. Resort to Khula and Mubarat are commonly seen in India as a mode for dissolution of marriage.

Divorce by Mubarat is very close to the provision of Divorce by Mutual Consent under:

  1. Section 24, Special Marriage Act, 1954 
  2. Section 13B, Hindu Marriage Act,1955.

Khula (At the Request of Wife)

Khula means to lay down. It also means that the husband lays down his right and authority over his wife. The wife proposes the husband for dissolution of marriage and she can do this by providing some kind of consideration to him. This may be by giving up her dower or something else. This totally depends on the wife that she provides the consideration or not. So this type of divorce starts from wife and husband can’t refuse it, but he can do negotiations related to the consideration.

  1. In the case of Mst. Bilquis Ikram vs. Najmal Ikram [1], it was held that the wife has to satisfy the court that this marriage is forcing her into a hateful union after that she is entitled to Khula.
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Essentials of a Valid Khula

  1. Competence of the parties: The parties must be of sound mind and have attained the age of majority.
  2. Free consent: The husband should accept the proposal made by the wife. There should be free consent on the husband’s behalf. The consent should not be influenced by force, fraud etc.
  3. Formalities: An offer must be made by the wife to free the husband from the matrimonial tie and husband needs to accept the offer.
  4. Consideration: The wife has to pay something to her husband to seek her release. This could be anything property, money etc.

As soon as the proposal is accepted by the husband the marriage is dissolved, even if the payment for consideration is on a later date.

Mubarat  (Mutual Release)

In this case, both husband and wife are willing to dissolve the marriage. So the offer of separation can come from either the husband or wife’s side. The essential features of divorce by Mubarat are as follows:

  1. Both parties want to get rid of each other.
  2. Both the parties are interested, so there is no need for consideration.

Legal Consequences of Khula and Mubarat

The effects are similar to that of divorce by any other method. The wife needs to undergo the period of iddat and husband has to maintain her during that period. After the completion of the period, marriage dissolves.

Difference Between Khula and Mubarat

                          Khula 

                          Mubarat 

Redemption of the contract of marriage.

Mutual release from the marriage.

Wife gives the offer and husband accepts it.

Either the husband or wife can make the offer and the other party can accept it.

Consideration is given by the wife.

There is no consideration involved.

Dislike is from the wife’s side.

Mutual dislike.

The Indian Christian Marriage Act, 1872

The provision of the Indian Divorce Act,1869 is applied to the Christain marriage in India. Their marriage can be dissolved under Section X of this act. Under Section XA (as amended in 2001) both the parties can file for divorce by mutual consent.

The Parsi Marriage and Divorce Act 1936

Under Section 32B Divorce by Mutual Consent is defined. It provides that whether the marriage is solemnized before or after the commencement of the Parsi Marriage and Divorce (Amendment) Act, 1988 they can file for divorce by mutual consent. The suit has to be filed by both the parties and the parties must be living separately for a time span of one year and they are not able to live together and decided mutually to separate. The suit cannot be filed unless the period of one year has expired from the date of marriage. If the court is satisfied from the facts and circumstances of the case, the Court can grant the decree for divorce.

The Special Marriage Act, 1954

The divorce by mutual consent is filed under Section 28 of the Special Marriage Act, 1954 in case of court marriage. The parties have to together file a petition in the Court claiming that it is not possible for them to live together and because of this they are living separately and they both decided to file for a divorce by mutual consent.

Also, both the parties are provided with a time span of six months to think about their decision but if the parties are fixed on their decision than after the completion of six months and before ending eighteen months the party can move in the Court. After getting satisfied with the facts and circumstances of the case and when there is no ground available on which the petition can be rejected than the Court can grant a decree for divorce by mutual consent in favour of the parties.

Step by Step procedure to file for a Mutual Divorce

Step 1: Petition to File for a Divorce

Firstly, a joint petition has to be filed by both the parties for dissolution of marriage to seek a decree for divorce. The petition is to be presented to the Family Court duly signed by both the parties. The spouses have to present the petition on the grounds that, they both are living separately for a consecutive period of one year. It is hopeless for the parties to live together and they have co-jointly decided to divorce.

If anyone of the party is not available then any family member of such party can file the same on his/her behalf. After this, the ‘First Motion’ is established.

The court will give the date for pleading after a period of six months but the period will not be more than eighteen months. The time period after six months and before the completion of eighteen months is known as the cooling-off period. If the party doesn’t take action on a given date or if the parties pull back the case then the petition stands cancelled.

Paper Requirement

The papers that are required along with the petition are:

  1. Birth details and family details.
  2. Details of income.
  3. Details of assets owned.
  4. Income tax returns filed for a period of three years.

Jurisdiction of the Court

Place of a jurisdiction of the court can be the one where:

  1. Couple last lived.
  2. Their marriage was solemnized.
  3. Wife is residing at present.

Step 2: Appearing Before Court and Inspection of the Petition

When the date is given by the Family Court, the parties have to be presented there with their respective lawyers who are representing them along with their documents. The court, in the first case, will tend to bring settlement between the parties so that they could drop the idea of getting a divorce. But if no parties agree then the court will move further with the petition for divorce.

Step 3: Passing Orders for a Recording of Statements on Oath

After the petition is examined by the court and the court is satisfied by it, then Court can order that the party’s statement to be recorded on oath.

Step 4: First Motion is Passed and a Period of 6 Months is Given Before the Second Motion

After the recording of the statement, the court passes an order on the first motion. Before the filing of the second motion, a time period of six months is granted to both the parties. Before the ending of eighteen months from the date of presentation of divorce petition in the Family Court, the second motion is filed.

Step 5: Second Motion and the Final Hearing of Petition

The parties appear and record statements before the Family Court, once they decided to go ahead with the proceedings and appears for the second motion. In the final hearing, the parties need to be present in the court. 

The Supreme Court can waive off the period of six months given to the party if the court is satisfied that the parties are settled on the issues related to alimony, custody of the child or if the court is of the view that the waiting period will only extend the adversity of the parties.

Step 6: Final Decree of Divorce

The court passes the decree of divorce when it comes to the conclusion that all the facts and statements present in the petition are true and there is no scope of reconciliation between the parties. The divorce becomes final once the decree of divorce is obtained by the court.

No waiting in mutual consent divorce

There has been a conflicting view of the courts whether they should wait for a period of six months or not. 

In the case of Grandhi Venkata Chitti Abbal [2] and Dinesh Kumar Shukla vs. Neeta [3], it was held that the waiting period of six months is compulsory otherwise it will hinder an important aspect of the Section 13B(2) of the Hindu Marriage Act,1955. The period can be reduced from six months on the discretion of the court.

There was another view that was provided in Hitesh Narendra Doshi vs. Jesal Hitesh Joshi’s case[4], it was held that the provision of six months was given for a specific purpose. The purpose behind this provision is that in the period of six months the parties can give time to each other, think about it once again, introspect about it and reconcile. 

Can mutual consent divorce be withdrawn?

If one party changes its mind and wants to save his/her marriage then that party can file an application before the Court where their proceeding for divorce is going on, stating that he/she wants to withdraw his/her consent for the divorce as he/she wants to give a second chance to their marriage. In case if both husband and wife agree to the withdrawal then both can withdraw the case mutually and the court can dismiss such petition.

What if one of the spouses withdraws the mutual consent divorce petition after filing in the Family Court? What can the other spouse do under such situation?

The court grants no divorce decree in case either of the spouses files an application before the court declaring that he/she doesn’t want to pursue Divorce by Mutual Consent. It can be done during those six months when the petition is pending in the court.

The court can grant a divorce decree and dissolve the marriage if it comes to know that the unilateral withdrawal of consent is not genuine. So the court will ignore the withdrawal of consent and will grant the decree.

If the money is accepted by wife at a later stage and she withdraws her consent and did not make any effort to reconcile in the last seven years then it cannot be called a genuine act.

There are several cases in which it is seen that the wife withdraws her consent by filing an application in the court in order to demand more permanent alimony than what was agreed upon. This is can be used as a tool for harassment.

Can the consent be withdrawn after filing for Divorce by Mutual Consent?

Cases under which the court has explained that the consent can be withdrawn after filing for divorce by mutual consent are:

  1. Jayashree Ramesh Londhe vs. Ramesh Bhikaji [5]
  2. Nachhattar Singh vs. Harcharan Kaur [6]
  3. Sureshta Devi vs. Om Prakash [7]
  4. Ashok Hurra vs. Rupa Zaveri [8]
  5. Anil Kumar Jain vs. Maya Jain [9]

In Jayashree Ramesh Londhe vs. Ramesh Bhikaji, the court held that no party can withdraw from the joint petition of divorce unless and until there is a consent of both the parties for the respective withdrawal.

Also, in the case of Nachhattar Singh vs. Harcharan Kaur the court held that once the parties voluntarily file the petition for divorce by mutual consent and all the conditions mentioned under Section 13B(1) of the Hindu Marriage Act,1955 are fulfilled, then it is not open for the party to withdraw the consent.

In the case of Sureshta Devi vs. Om Prakash, the court held that unless and until the decree of divorce is passed the mutuality of consent should be there. The purpose of giving a time span of six months is that there can be chances if the parties want to change their mind. It is not necessary that both parties change their mind. It can be done by one party also.

Later in the case of Ashok Hurra vs. Rupa Zaveri, the court said that the mutual consent should continue till the passing of the decree of divorce, even if the consent is not withdrawn by one of the parties during the time span of eighteen months.

In Anil Kumar Jain vs. Maya Jain, the court explained that consent that is given by the parties at the stage of filing of the petition must continue till the second stage when petition comes up for order and decree for divorce is passed. The Supreme Court while exercising its extraordinary power under Article 142 of the Constitution can pass several orders to provide complete justice to the party.

The court would consider that the consent for divorce was continuing if the party who is withdrawing the consent does not communicate it to the court either himself or by his/her counsel.

A Division Bench of Rajasthan High Court held that at the time of second motion the withdrawal of consent to divorce by the party must be by a positive act.

Circumstances under which courts don’t agree with unilateral withdrawal by a Spouse

If there is no sufficient cause for withdrawal of the consent then the court considers that the withdrawal of consent is done under some pressure. When one party withdraws its consent it amounts to mental cruelty after mutually agreeing to divorce.

Whether mere silence at the second stage would amount to withdrawal?

In the case of Suman vs. Surendra Kumar [10], husband after filing the joint petition for divorce did not turn up at the second stage. The Family Court held that mere silence would not amount to a withdrawal of the consent as one party himself left the matter. So the conclusion has to be drawn in the favour of consent instead of the absence of consent.

Mutual divorce in India takes how long

The proceeding can go on till a minimum of three hearings or six months to one year depending from case to case. In some cases, if the matter is very serious than it can extend up to two years till ten years or more as the case may be.

Alimony in mutual divorce

The party can fix the maintenance or alimony through mutual consent if the parties are seeking divorce through mutual consent. According to the agreement a particular amount of money can be given either by the husband to wife or vice versa as the case may be. The amount to be paid is decided on several grounds such as respondents own income, the property he/she owns etc.

Can a working woman ask alimony in India

A working woman can ask for alimony in India. Mostly, the wife gets 20-35 percent of the husband’s net taxable income. A working woman can get maintenance if the court feels that she is not able to support her lifestyle which she enjoyed while she was married. The court can also grant maintenance in the case if she has dependants and she is not able to maintain them because her income is not that sufficient and also if she has some reasonable demands.

Divorce alimony calculator India

There is no fixed formula for calculating the alimony. The Court provides different alimony in different types of cases depending upon the facts and circumstances. The Court considers the status of the parties, their needs, husband’s capacity to pay, the number of people they have to support financially. 

The alimony is decided by taking into consideration the total monthly income that they take home without tax, their educational background, years since they were married and the number of children they have. The Supreme Court has set alimony benchmark to be 25 percent of ex-husband’s net salary. The Court also said that 25 percent of the husband’s net salary would be just and equitable for the wife so that she can live her life with dignity.

In the case of Gaurav Sondhi vs Diya Sondhi [10], the Court laid down the procedure that has to be followed by the Matrimonial Courts while granting interim maintenance/maintenance. Following is the procedure for granting maintenance

  1. The husband has to pay to his wife before the 10th day of every month. The Court can direct husband to pay such on a later date after taking into consideration all the facts and circumstances of this case which makes it impossible for him to pay on such date. The Court can pass orders to direct the husband to pay such maintenance on a later date.
  2. If the wife is having a bank account then the husband is directed to make such payment directly in her account before the 10th day of the month.
  3. The payment can be made through counsel if there is any difficulty in making it to the wife or the child directly. The husband can also deposit a draft/ crossed cheques in the name of the wife in the Court registry.
  4. In case there is a default in first payment than the Court can forgive it. But if there is a default in second payment without a proper reason then the court can add penalty up to 25 per cent of the amount of monthly maintenance.
  5. If there is a default in third and fourth then the penalty may increase up to 50 per cent of the monthly amount of maintenance.
  6. It is the duty of the court to ensure that the order of maintenance is meaningful and provide support to the wife.
  7. A written statement should be filed within a reasonable time if the interim maintenance is being paid and litigation expenses have been provided to the wife.
  8. The Court must take into consideration the nature of employment of the husband while applying penalty because of default in payment. Husbands having irregular employment have more chances to make default in payment.

One sided divorce in India

Divorce without Mutual Consent 

When one party to the divorce is not ready to seek divorce then the only option left to the parties is to fight for it in the Court. This is known as “Contested Divorce”. The Hindu Marriage Act,1955 provides numerous grounds for divorce.

Grounds for Divorce

The marriage which has been solemnized under Section 13 of The Hindu Marriage Act,1955 can seek divorce. The following grounds applies to both husband and wife:-

  1. Adultery. 
  2. Cruelty. 
  3. Desertion.
  4. Conversion.
  5. Unsoundness of mind.
  6. A Virulent or incurable form of Leprosy.
  7. Venereal Disease in a communicable form.
  8. Renunciation of world.
  9. Presumption of Death.

Additional grounds for Divorce without Mutual Consent

Along with the above conditions, the parties can seek divorce on the following grounds:

  1. After passing of the decree of judicial separation, cohabitation between the parties has not been resumed for a period of one year or more.
  2. For a period of one year, from the passing of the decree of restitution of conjugal rights, there has been no restoration of conjugal rights.

Grounds on which only wife can seek divorce

Grounds that are provided only to the wife under The Hindu Marriage Act,1955 are:

  1. Bigamy. 
  2. Rape, Sodomy or Bestiality.
  3. Non-resumption of Cohabitation after the decree of maintenance.
  4. Repudiation of marriage.

Adultery as a ground for divorce- Section 13(1)(i)

Extramarital sex is known as “adultery”. Other than his/her spouse if a married person voluntarily indulges in sexual intercourse with a person of the opposite sex during the subsistence of his previous marriage then it is termed as adultery. These are sexual relations not allowed by marriage.

To prove adultery, circumstantial evidence is enough.

To establish adultery:

  1.  There should be voluntarily sexual intercourse. Circumstances under which the action will not be considered as adultery are:
    1. An attempt to commit adultery.
    2. Mere love letters will not establish the guilt of extramarital sex.
    3. If there is an involuntary sexual act.
    4. If the act is committed under intoxication, by force or fraud.
    5. If a woman willingly commits an act considering another man to be her husband.
  2. Sexual intercourse should take place after the solemnization of the marriage with the petitioner.
  3. Even a single act of adultery will act as a ground for divorce.

When a child is born during the wedlock it is conclusive proof for the legitimacy of such child, unless it is proved that the child is born during the period when parties have no access to each other.

For example, the wife has been living separately since June 1973 and gave birth to a child in May 1974 was valid proof that the child was of a third person other than that of husband.

In Rajeev vs. Baburao [11], the court held that when a married person contracts a bigamous marriage after this act has been commenced then his wife can file a suit for divorce under this provision because the second marriage will be considered as void and any type of sexual intercourse with his second wife will amount to adultery.

In the case of Veena Kalia vs. Dr Jatindra Nath Kalia [12], the court held that the husband is guilty of adultery, cruelty and desertion because after getting married he went abroad leaving behind his wife and two daughters. There he married again and had three children from. For 23 years they lived apart. The court grant the decree of divorce in the favour of wife and husband was ordered to pay ten thousand rupees per month.

Cruelty as a ground for divorce- Section 13(1)(ia)

Cruelty includes both physical as well as mental cruelty. Before the Amendment Act, 1976, it was only a ground for judicial separation and not a ground for divorce. Earlier view on cruelty was that there should be actual physical harm and reasonable apprehension to establish cruelty but this view was changed. Now mental cruelty is also considered as a more serious injury. 

Cruelty can be established from facts and circumstances of the case. It mainly includes the behaviour of one spouse towards the other which causes suspicion in the mind of the party who is filing for divorce that it is unsafe to live with him/her.

Instances of Cruelty:

  1. Physical Cruelty:
    1. Burning any limb of the body.
    2. Feeding something that is injurious to health.
    3. Making an attempt on life.
  2. Mental Cruelty includes:
    1. False charge of unchastity.
    2. Forcing the wife to adopt the life of a prostitute.
    3. False charge of impotency.
    4. Threats to commit suicide.
    5. Keeping a concubine.
    6. Neglect of the wife when she is seriously ill.
    7. Repeated abuses
    8. Continuous taunts, curses.
    9. Injury caused to near and dear ones.
Cases wherein there was no cruelty
  1. Petty quarrels.
  2. Refusal of wife to resign the job.
  3. Ordinary wear and tear of married life.
  4. Consumption of alcohol by husband unaccompanied by abuses, insults and violence.

The court held the wife guilty of cruelty in the case of Dastane vs. Dastane [13]. The wife used to abuse parents and ancestors of the husband, she used to beat their child. She abuses her husband. Cursed the Dastane family, insults his husband in the presence of his students, tore the mangalsutra twice, rubbed chillies on the tongue of an infant child, defame him on a daily basis, used to nag him all night and don’t let him sleep, used to hide his shoes, keys and important documents, locked him outside the door on various occasions. The conduct of wife not only amount to physical cruelty but also amounts to mental cruelty.

In Bhagwat vs. Bhagwat [14], it was held that intention is not an essential element to establish cruelty. In this case, the husband strangulates wife’s younger brother on one and his son on another occasion. It was established that the husband in both cases acted due to a fit of insanity. So it was held that intention is not an essential element in order to establish cruelty and take divorce on this ground.

Desertion as a ground for divorce- Section 13(1)(ib)

When one spouse intentionally abandons another spouse without his/her consent or without any reasonable cause is called desertion. It is withdrawal from the matrimonial obligation.

Essential elements of desertion

Deserting spouse has to prove two elements:

  1. The factum of separation.
  2. There should be an intention on his/her behalf to permanently end the cohabitation. 

Deserted spouse is concerned with:

  1. Absence of consent.
  2. Absence of a reasonable cause.

The petitioner has to prove all these elements. All these elements must continue for the entire statutory period of not less than two years.

No Desertion without previous cohabitation

Cohabitation by the parties is an important element of a valid marriage. Desertion will not be established unless and until there is the previous cohabitation by the parties.

Types of Desertion

Desertion is of two types:

  1. Actual desertion.
  2. Constructive desertion.

In Actual Desertion, the deserting spouse gives up on the matrimonial home without proper excuse and justification. To prove Actual Desertion following facts must be established:

  1. Parties must have parted.
  2. There is an intention on the part of deserting spouse to desert the other spouse.
  3. No consent is given by deserted spouse in this regard.
  4. There should be no reasonable cause for desertion.
  5. Desertion should continue for a period of two years as it is a continuing offence.

In Smt. Snehlata Seth vs. Kawal Krishna [15], the husband filed a petition for divorce on the ground of desertion as the wife left husbands matrimonial home. The Court rejected this petition saying that the wife left the matrimonial home only at the instance of her mother-in-law and she has a bona fide intention to return to her matrimonial home but the husband is not ready to take her back. So the Court rejected her petition on the ground that leaving matrimonial home like this will not amount to desertion.

In Lachman vs. Meena [16],  the wife was living with her husband’s joint family. After five years of marriage, she went to South East Asia in order to handle her parents business. During this period her husband wrote her to return back to her home but she used to reply that her health doesn’t permit her to return. There was no intention on her behalf to return as it can be judged through the letters. So it was held by the Supreme Court that there should be not only factum of separation but also an intention to separate in order to establish desertion as a ground for divorce.

The court in the case of P.V.Veeraraghavan vs. S.T.Parrvathy [17], AIR 1974 Ker 43 held that where the intention to separate is not proved than the decree of judicial review will not be granted. In this case, the husband has insufficient means to afford a new matrimonial home. So he directed his wife to leave with him in his ancestral home with his parents and brothers but the wife did not agree to it. The husband filed a petition for judicial separation on this ground on which the court held that there was no intention to separate from wife’s side so no decree would be granted.

Constructive Desertion

It can be proved while the spouses are living under the same roof. It may not be withdrawal from a place but a state of things. It includes:

  1. Intentionally neglecting the other spouse.
  2. Ignoring opportunities for copulation.
  3. Not performing his/her marital duties.

In the case of Disnhaw vs. Dinshaw [18], AIR 1970 Bom 341 the Court held that constructive desertion is a matter of inference that is to be drawn from the facts and circumstances of the case. If due to husbands treatment wife leaves then it is clear that the wife left due to husbands intended action. He wants her to leave. So it depends on the motive of the deserting spouse and its effect on the deserted spouse. If the deserting spouse has malice towards the deserted spouse and due to his actions and treatment the deserting spouse finds it difficult to live with the other than this can be the case of cruelty. But if the withdrawal from the society is with a valid reason than this withdrawal will not amount to cruelty.

The neglect should be such that it is clear that he/she has decided to break the wedlock.

The Supreme Court has dismissed the appeal of wife in the case of Savitri Pandey vs. Prem Chandra Pandey [19] because she charged her husband with the offence of desertion and in her own pleadings she mentioned that the parties have never consummated. The wife lived with her husband for a few weeks and put a fake charge on her husband that he tortures her. She started demanding all household articles as well as money and also put a false charge of adultery on her husband. The court held that consummation is a very essential aspect of desertion and according to her own pleadings the parties never consummated. So, the appeal was dismissed.

In Bipinchandra vs. Prahbavati [20] the court held that the guilty party can bring an end to desertion through the resumption of cohabitation, resumption to marital intercourse and through the offer of reconciliation.

Conversion as a ground for divorce- Section 13(1)(ii)

If a Hindu cease or ceases to be Hindu by converting himself into another religion than the other party who is still a Hindu is entitled with the right to seek divorce under this section. Also, if children are born to him/her after the conversion gets disqualified from inheriting the property of any of their Hindu relatives.

A petitioner who seeks divorce on this ground has to prove the following:

  1. The other spouse discontinued being a Hindu.
  2. He has done so by accepting another religion.

This ground is not available to the converting spouse because then the spouse will take advantage of his own wrong. But if both the spouses convert into another religion then no one can seek the remedy for dissolution of marriage.

The court in the case of Sarla Mudgal vs. Union of India [21] and Lily Thomas vs. Union of India [22], held that simply because one party has changed its religion than a marriage which is solemnized according to one personal law will not dissolve the marriage solemnized under another personal law. Marrying another woman while the first wife still exists is an offence under Section 494, IPC. Justice Saghir Ahmad explained that where a person adopts another religion just because there is a plurality of marriage allowed and he gives up on his first marriage then he cannot be allowed to take advantage of his wrong by exploiting the religion, as religion is not something that should be exploited.

Mental Disorder: Unsoundness of Mind- Section 13(1)(iii)

Before 1976, unsoundness of mind for one year was a ground for judicial separation and if it continues till three years then it will be a ground for divorce. But after the 1976 Amendment, no period is prescribed and moreover, it includes all types of mental cases, sub-normality and abnormality.

The petitioner has to prove that:

  1. Respondent has been of unsound mind.
  2. It is incurable.
  3. It is of such kind that the petitioner is not expected to live with the respondent.

The Amendment Clause after 1976 also includes the following things under mental disorder:

  1. Occasional fits of schizophrenia.
  2. Epilepsy. 
  3. Mental retardation.
  4. Any Other disability of mind

Virulent and Incurable form of Leprosy- Section 13(1)(iv)

There is no period prescribed for filing a petition under this clause but prior to the 1976 Amendment, it was one year for judicial separation and three years for divorce. The requirements are:

  1. Respondent is suffering from leprosy which is an infectious disease resulting in disfigurement causing permanent disability.
  2. Leprosy must be both Virulent and Incurable. Ordinary leprosy is not a ground for divorce. Virulent means highly poisonous, venomous.

Venereal Disease in a communicable form- Section 13(1)(v)

The Communicable disease passes from one person to another, by the touch of that person or using his/her objects etc. The petitioner must give medical evidence in order to seek divorce on this ground. After the 1976 Amendment, there is no period prescribed for this.

Renunciation of world- Section 13(1)(vi)

By entering any religious order and renouncing from worldly affairs it amounts to “civil death”. To seek divorce on this ground the petitioner has to establish that:

  1. Respondent has entered any religious order.
  2. He/she has renounced the world.

A Spouse can only sue another spouse unless and until the second condition is also fulfilled. A person who renounces the world has no interest in society. It can be both Tyag and Sanyasa. Thus, mere tyag will not be considered under this ground it has to be coupled with sanyas.

Presumption of death- Section- 13(1)(vii)

If a person is not heard of being alive from his/her near or dear ones or his/her relatives for a period of seven years then he/she seemed to be legally dead. But in case he/she was married before, then their spouse can seek divorce on such a ground. In this case, no alternate decree of judicial separation is passed.

In the case of Vinita Saxena v. Pankaj Pandit [23], the lady got married at the age of 24 years. The marriage lasted for three to four months and she was forced to leave her matrimonial home. Marriage was not consummated and the respondent was also not in a position to fulfil his matrimonial obligations too. They lived separately since 1993. They have never seen each other in thirteen years and there was no chance of reconciliation. The court decided in favour of the wife and granted the divorce.

Irretrievable breakdown grounds- Section 13(1A)

Non-Resumption of cohabitation after the decree of Judicial separation or Restitution of Conjugal Rights

According to Section 13(1A)(i) of the Hindu Marriage Act,1955 after passing the decree of judicial separation, if the parties don’t resume cohabitation for a time span of one year or more than this can act as a ground for divorce for another party. Mere going together to some places do not amount to cohabitation. If the wife wants to resume the cohabitation but the husband dont want it or vice versa then this can also act as a ground for divorce.

Also, if there is no restoration of conjugal rights for a continuous period of one year or more after passing of such decree then this can act as a valid ground for divorce under Section 13(1A)(ii) of the Hindu Marriage Act,1955. Restitution of conjugal rights means that the parties must return to cohabitation.

Wife’s special grounds of divorce- Section 13(2)

Bigamy- Section 13(2)(i)

If the husband marries again while his first marriage has not dissolved then he will be guilty of bigamy and wife can seek divorce on this ground. The necessary ingredients of this section are:

  1. The husband should marry another woman.
  2. Husband married again while his first wife is alive.

If a person has two wives then the co-wives can seek divorce on the following grounds:

  1. Before the commencement of this act both the wives are married to him.
  2. Petition for divorce is filed when both the wives are alive.
  3. Both marriages must legally exist.

This section is for women, it provides support to the women as there are several cases in which the husband converts themselves into Islam so that they can get married to more than one wife.

Rape, Sodomy or Bestiality- Section-13(2)(ii)

All these three matrimonial offences are also crimes under IPC and punishment is provided for them. Sexual deviancy of the husband has been made a ground for divorce. If the wife proves that since the solemnization of marriage husband is guilty of rape, sodomy or bestiality she can be granted with the decree of divorce.

  1. Rape– it is sexual intercourse by a man with a woman against her will. A wife can file for divorce on the ground that the husband has raped her. For this, she must be below the age of fifteen years because sexual intercourse with a girl below the age of fifteen years is rape.
  2. Sodomy– Anal intercourse by a man with his wife or with another woman or with a man is termed as sodomy. Here, the consent of the victim and his/her age have no relevance in order to establish sodomy.
  3. Bestiality– It means sex with an animal and it is covered by unnatural offences under Section 377, IPC.

Non-Cohabitation after maintenance order- Section-13(2)(iii)

When the court has passed the order that the husband has to provide maintenance to his wife, and if the husband did not obey the order of the court and cohabitation has not resumed between them for a duration of one year or upwards then, the court grant the decree of divorce in favour of the wife on this ground.

When a decree is passed under Section 18 of the Hindu Adoption and Maintenance Act,1956 and under Section 125 of the Criminal Procedure Code, 1973 then it becomes obligatory for the husband to pay maintenance to his wife and also to resume cohabitation within a time period of one year. If the husband fails to discharge his duty then, the wife can seek a divorce in the court. If the husband offers cohabitation and wife doesn’t respond to it she is within her prescribed rights.

Repudiation of marriage- Section 13(2)(iv)

This clause is for the girls who are married and have not attained the age of fifteen years. Consummation of marriage is irrelevant here. The wife can get a divorce under subsequent conditions:

  1. She must be below the age of fifteen years at the time of marriage.
  2. Marriage is repudiated by her before attaining the age of eighteen years and after attaining the age of fifteen years.

The wife has to prove repudiation and there is no such prescribed procedure for this. There was no such right available prior to the Amendment of 1976, the Amendment Act,1976 added this clause.

That is all about Divorce by Mutual Consent. So far it has been seen that divorce by mutual consent is a better way rather than defaming each other through a court proceeding in an uncultured manner. In fact, in the case of divorce by mutual consent, the divorce can be granted as soon as possible by taking into consideration all the relevant facts and circumstances of the case rather than getting a divorce on other grounds which will definitely involve more time, money and efforts of the parties. 

References

  1. (1959) 2 WP 321
  2. AIR 1999 AP 91
  3. AIR 2005 MP 106
  4. 2003 (3) ALD 81
  5. AIR 1984 BOM 302
  6. AIR 1986 P H 201
  7. 1992 AIR 1904, 1991 SCR (1) 274
  8. 10 March 1997
  9. 1 September 2009
  10. AIR 2003 Raj 155
  11. 3 May, 2005
  12. 1981 SCC OnLine Del 364 
  13. 1975 AIR 1534 
  14. AIR 1976 Bom 80
  15. AIR 1986 Del 162
  16. 1964 SC 40
  17. AIR 1974 Ker 43
  18. AIR 1970 Bom 341
  19. 8 January 2000
  20. 1957 AIR 176
  21. 1995 AIR 1531, 1995 SCC (3) 635
  22. 2000 (2) ALD Cri 686
  23. (2006) 3 SCC 778

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Bhopal Gas Tragedy Case Study

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 This article is written by Ayushma Sharma of Faculty of Law, Aligarh Muslim University where she has discussed the Bhopal Gas Tragedy Case.

Introduction 

The night of 2-3 December 1984, was the most unfortunate night for the Bhopal, in fact not only for Bhopal but for the whole world. Thousands of people lost their lives that night and many are suffering the consequences of the tragedy even now. The incident was caused because of the leakage of Methyl Isocyanate (MiC) gas from the Union Carbide India Ltd (UCIL) plant.

Bhopal Gas Tragedy Case Study

Background 

The Union Carbide Corporation, an American enterprise established a pesticide plant in India because of its central location. The plant was supposed to produce Sevin, a pesticide. Union Carbide and the Indian Government had a deal, and under this idea, the Union Carbide had a 50.9% share and the Indian Investors had a 40.1% share. The plant was named as The Union Carbide India Limited (UCIL).

UCIL started its production of pesticide in 1979. While this pesticide was produced, a toxic liquid was also produced i.e., Methyl Isocyanate (MIC). Since MIC is a very toxic chemical it required great maintenance. 

Around 1:00 a.m on 4th December 1984, when the MIC gas started swallowing up the whole of Bhopal people who were sleeping peacefully started feeling the change in the air. They ran for their lives but couldn’t escape their death. Some who were able to save their lives weren’t able to save themselves from the coming disabilities. All this happened because of leakage of the MIC gas from the tank E106.

Earlier, too, complaints were being made about the maintainability of the plant, of how MIC was leaking in small amounts. The previous incidents of leakage had also caused the death of some people and left others severely injured. But, the authorities paid no attention to it. The machines were worn out but no replacement was there.

  •  The Gas Disaster 

Around midnight on 3-4 December 1984, the MIC gas got leaked from the plant and got mixed with the fresh air in Bhopal. Suddenly, people started feeling uneasy, started vomiting, were having trouble while breathing, people started dying within a few minutes of inhaling the toxic gas. It was not only the human beings that suffered but animals, too, suffered and lost their lives.

People, in large numbers, were rushed to the hospital but at that time no doctor knew about the actual cause of death. No one knew about the leakage of the MIC. They just had a hunch about some leakage but exactly didn’t know about the leakage of MIC gas. Since doctors couldn’t operate properly without knowing the exact cause of the accident, so many people lost their lives.

It was reported that nearly 3000 people lost their lives and more than 6 lacs were severely injured. The survivors survived with permanent respiratory problems, and other complications. Children who weren’t even born at that time were born with some health issues. 

  •  The International Medical Commission

After the tragedy took place there was no proper health aid provided to the victims. The company was involved in lawsuits and was on the verge of closing down its business. On the other hand, the Indian Government had to face the wrath of the families of the victims and the other people all over India on a lack of carrying out an investigation and providing medical aid to the sufferers. 

For the medical personnel to provide correct medical treatment to the victims they had to know the exact cause of the tragedy. So that based on the cause they could start their operation. A connection had to be established between the cause of the accident and the health attributes caused by the accident.

In 1992, Permanent Peoples’ Tribunal suggested the formation of an international commission to provide better medical treatment to the victims of the Bhopal tragedy. Later on, in 1993 Bhopal Group for Information and Action laid down a proposal for the same.

Finally, in the year 1993 International Medical Commission on Bhopal (IMCB) was organized to provide medical assistance to the survivors of the Bhopal tragedy of 1984. IMCB was a constitution of 15 professionals from 12 countries having expertise in the field of:

  • Environmental health
  • Respiratory medicine
  • Toxicology
  • Immunology

IMCB had co-chairpersons and they were, Dr. Rosalie Bertell and Gianni Tognoni. The main aim of the International Medical Commission on Bhopal was to provide some relief to the victims and to suggest some ways to prevent such disasters in the future. 

The work was divided into 8 areas, and they are:

  • Clinical
  • Family Life
  • Epidemiology
  • Medical care 
  • Drug Therapies 
  • Accident Analysis
  • Claims
  • Review of published literature

A plan was laid out for investigation to know the actual cause of the exposure. This plan has three phases. 

First Phase – In this phase, the symptom report was analyzed and distance was used as a substitute for exposure. It stated that respiratory and neurologic problems were the aftermath health effects of the exposure.

Second Phase – Lung function and respiratory organs were assessed. According to the report, there were excessive respiratory issues and the functioning capability of the lungs was reduced with each passing minute. 

It was noticed that to know the exact level of risk factors involved it was necessary to analyze the exposure accurately. Also, to provide long-term care and medical aid it was mandatory for them to know exactly what they were dealing with.

Third Phase – This was the last phase of the process. In this phase, the victims were assessed individually based on exposure time, location and distance. Finally, the reports were compared to the findings from the distance surrogate to determine whether their association is better than that of distance alone. 

Immediate effects of the Bhopal Gas Tragedy

  • The leak and its effects

Methyl Isocyanate (MIC) :

  • The colorless liquid used for the creation of pesticides.
  • Is highly toxic.
  • Since it is extremely reactive to water, it requires good maintenance.
  • A small amount of water is sufficient to increase pressure for converting the liquid into a toxic gas.

The UCIL had to store three tanks of MIC and its temperature was to be maintained below zero degrees celsius. Also, it was to be kept under pressure with the help of inert nitrogen. But, before the few days of the accident the tank, E106, in which the MIC was kept couldn’t hold the pressure any longer resulting in stopping of production for some time. 

The tank even after being worn out couldn’t stop the production for a much longer time. The production process resumed after some time. But, on the night of 2-3 December 1984, because of a lack of maintainability, the water broke out from the connecting pipe and started getting mixed with the MIC liquid. This resulted in a strong heating reaction because of which pressure at a splitting pace was created and the MIC gas got released. 

People who were leaving nearby started getting affected by the harmful gas. They started having a breathing problem, irritation in eyes, chemical burns on the skin, contraction of lungs. They were then taken to the hospital but without the main reason for the accident, the doctors couldn’t operate correctly. 

  • Cause of Leakage

Though the main reason for the tragedy was the mixing of water with the Methyl Isocyanate because of leaks in the connecting pipes yet it was not the only reason that contributed towards the happening of the tragedy. There are many other reasons which contributed to this unfortunate event. All these small reasons are because of the lack of proper maintenance.

Following are the reasons that, too, have contributed to the Bhopal tragedy:

  • An inspection team came from Danbury, the United States to the Bhopal plant and found 61 safety problems. Out of these 61 problems 31 were major.
  • Main refrigeration and cooling system were closed down before 150 days of the accident
  • To lower the cost number of workers working were reduced.
  • Also, the specialized training was not given to the unskilled workers so that they could at least have an idea about the consequences of their actions.
  • As already mentioned, before this major tragedy there had already been minor leakages which cost the life of one worker and others were injured.
  • No supervisor was there for his night shift.
  • The pressure control valve of the tank E610 had not been working properly for over a month.
  • Negligence on the part of the maintenance authorities.
  • There was no backup plan in case of emergencies.

Another important thing to notice is that if the fire or the rescue squad had an idea of how to prevent the gas from spreading, or if there was any antidote chemical that could have been used to bring down the effects of MIC gas then, maybe some lives could have been saved.

The root cause was the lack of management on the part of the authorities. Also, it’s been said that the company had not informed all the concerned authorities about the emission of MIC gas. Had some authorities known about the gas maybe they could have prepared some backup strategies in case of a crisis. 

  • Toxicology of MIC

Methyl Isocyanate is highly toxic. The American Conference of Government Industrial Hygienists stated that the level up to which a worker could be exposed to MIC without any harmful effects is 0.02ppm. As soon as the level is 0.4ppm it is toxic by inhalation, or by ingestion. At 5ppm, most people cannot detect it but because of symptoms, they get a warning. 

The symptoms of exposure includes:

  • Chest pain
  • Irritation in the eyes
  • Breathing problem
  • Irritation in the nose and throat
  • Burning of skin 
  • Coughing

When exposure level is above 21ppm it can result in:

  • Death
  • Bronchial Pneumonia – A condition that causes inflammation of the lungs
  • Lung edema – A condition caused by the accumulation of excessive fluid in the lungs, making it difficult to breathe
  • Emphysema – It means damage to the air sacs in the lungs resulting in shortness of breath

Therefore, storing methyl isocyanate requires proper care and caution, and especially when comes to water extra precautions must be taken. Methyl Isocyanate is very sensitive to water. It can be stored in glass or stainless steel, and temperature should be below 40-degree celsius or 104-degree Fahrenheit. 

  • Attributed diseases to the gas exposure

The attributed diseases to gas exposure are as follows:

  • Ophthalmic Problems – The MIC gas irritated the eyes of the people. MIC gas caused burning, watering, and photophobia, redness of the eye, swelling of the eyelid.
  • Respiratory and Pulmonary Problems – Inhalation of MIC gas resulted in shortness of breath, suffocation and chest pain. When examined it was found that some victims had suffered necrotizing lesions in their respiratory organs
  • Reproductivity Toxicity – Gas leak resulted in high-risk factors to the fetus and it not only the gas leak that increased risk but the factors like stress and ingestion of drugs by the mothers.
  • Genotoxicity – The MIC gas had affected the genetic information of the victims within their cells which had increased their possibility of having cancer. 
  • Neuromuscular Toxicity – It was found that the survivors of the accident had neuromuscular symptoms like numbness, pain, aches, and sensation of needles
  • The victims suffered many other health problems like carcinogenicity, immunotoxicity, psychological and neurobehavioral toxicity.
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Litigation

After the accident, many cases were filed on behalf of the victims since there was a problem in claiming compensation, and many people, especially the ones having low financial status, couldn’t afford to fight the case for a long time. These cases were filed against UCC in Bhopal as well as in the USA. An effort was also made to settle the matter outside of the court but it wasn’t successful. 

Then, after some time passed, the Indian Parliament passed The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985. According to Section 3 of the Act, the government of India had the power to file cases on behalf of every citizen who was entitled to claim the compensation. The government by Section 9 of the Act introduced “The Bhopal Gas Leak Disaster (Registration And Processing of Claims) Scheme, 1985”. 

The Indian Government filed a lawsuit in the United States District Court of NewYork against UCC. But, the UCC pleaded that filing the lawsuit in an American Court was not convenient. They pleaded on the grounds of forum inconvenient (it means that the Court can refuse to take jurisdiction when the parties have more convenient forums to go to). UCC said that since the accident took place in Bhopal and all the evidence was there only so it was more convenient to try in Indian Courts. 

So, Keenon J. accepted the plea of UCC and a new case was filed in the District Court of Bhopal. The District Court ordered UCC to pay a sum of Rs 350 crore to the victims. Next, UCC filed an appeal in the Madhya Pradesh High Court against the judgment of Bhopal District Court. This resulted in a decrease in the “interim compensation” from Rs 350 crore to Rs 250 crore. Simultaneously UCC tried to settle the matter directly with the gas victims outside the court. But, M.W. Deo J. of Bhopal District Court put an interim order on UCC to not to make any settlement with any victim until further orders of the Court. 

Finally, after the propagation of the rule of Absolute liability, the Court held UCC liable for the Bhopal tragedy. Though people had their doubts that the Indian Judiciary won’t be able to handle the situation. They thought that the wrongdoers would escape from their liability under the rule of Strict liability but it didn’t happen. The Indian Judiciary brought fair justice to the victims. 

On 14th and 15th February 1989, the Supreme Court in Union Carbide Corporation v. Union of India [1] ordered UCC to pay a sum of $470 million (Rs 750 crores) to the victims. 

Principle of Absolute Liability 

This liability is also known as “No-Fault Liability”.

Absolute liability is a liability where the accused is held liable but without any exception of getting excused from the liability. Normally, a person can be held liable only when he had mens rea (guilty mind) but in the case of absolute liability, a person can be held liable even if he had no intention of committing the offense. 

The principle of absolute liability is similar to strict liability. In the case of strict liability, a person keeps something dangerous with him, and he knows that even the slightest mistake would cause a release of that thing resulting in the death of human beings. So, even if he took proper care and caution but still the thing escaped resulting in the death of a man, he can be held liable under strict liability.

The principle of strict and absolute liability differ only at one point. While on one hand under strict liability, a person is having options to escape the lability so arisen but, on the other hand under absolute liability a person has no such options available. 

This doctrine of Strict liability was laid down in Rylands v. Fletcher [2] by Justice Blackburn.

Facts:

  • The defendant paid the contractor to build a reservoir on his land.
  • The contractors while doing their work discovered old coal shafts in the ground.
  • They decided not to do anything and carried on with their work.
  • The defendant didn’t know anything about this.
  • Later on, when the reservoir was filled with water the shaft broke and the water started bursting out of the reservoir.
  • As a result, the neighbor’s mine was flooded.
  • The respondent (neighbor) then, filed a suit against the defendant and claimed damages.

Judgment:

The House of Lords propounded the Doctrine of Strict Liability in this case stating that even if the accused did not have any intention of causing any harm to others yet he would be held liable for the same. This was so because of his mistake harm was caused. 

Following are the words used by Blackburn J. while propounding the rule: [3]

“We think that the rule of law is, that the person who for his own purposes brings on his lands and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so, prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff’s default; or perhaps that the escape was the consequence of vis major, or the act of God: but as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient.” 

Another important feature of Strict liability is that for the applicability of this rule the use of land should be non-natural. 

The Doctrine of Absolute Liability was introduced in this case [4] by P.N. Bhagwati J.

Facts:

  • The defendant, Shri Ram Food and Fertilizer Industry belonging to Delhi Cloth Mills Ltd. produced dangerous chemicals.
  • M.C. Mehta had already filed cases against this industry demanding closure of units of this industry.
  • On December 4 the oleum gas leaked from one of the units of the industry.
  • Many people lost their lives in this accident including an advocate practicing in the Tis Hazari Court.
  • It is believed that the leakage was caused because of mechanical and human errors.
  • not even two days after the accident there was another minor leakage of oleum gas from the connecting pipes.
  • District Court ordered Shriram industry to stop their production of lethal gases and chemicals.
  • M.C. Mehta filed a Public Interest Litigation (PIL) under Article 32 of the Indian Constitution. 

Judgment:

It was the second case of leakage of toxic gas after the leakage of MIC gas from the Union Carbide plant in Bhopal within one year. The Supreme Court knew that if they applied the Doctrine of Strict liability which was laid down in Rylands v. Fletcher case then the industries involved in hazardous work will escape liability by using an exception to the rule of the strict article. 

Therefore, the Apex Court decided to introduce a new rule which will align the Indian circumstances. It laid down the rule of Absolute liability which did not have exceptions available to a person under strict liability. The court held the defendant was liable under the rule of absolute liability. 

The Court held that the petitioners could claim compensation for the same on behalf of the victims after filing an action in an appropriate court. 

The Court, while justifying the rule gave the following two reasons: 

  1. An industry knows all about its operations that are being carried out while producing commodities. It is, therefore, the industry’s responsibility to have resources and safeguards in case of any danger.
  2. When an industry is involved in a dangerous or hazardous activity for profit then it owes an obligation towards the public for their safeguard. Therefore, in case of an accident, it has to compensate for the sufferers. 

Bhagwati C.J. while laying down the new principal gave the following statement: [5]

“We are of the view that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.” 

The Court gave the following statement as well: [6]

“Where an enterprise is engaged in hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting, for example, in the escape of toxic gas, the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principle of strict liability under the rule of Rylands v. Fletcher.”

Enactment of Acts 

Even after so many years of the accident people living in Bhopal, especially in the places near the plant, are still being affected till date. They haven’t escaped from the consequences of the accident yet. Even now, children who are being born have some kind of problem which is about the accident.

The Government to prevent future environmental hazards caused because of the actions of human beings has decided to implement laws that would protect the environment. Laws that would ensure that in case of disputes some authority is there for a speedy trial.

  • The Environment Protection Act, 1986

The Environment Protection Act was enacted in the year 1986 after 2 years of the Bhopal tragedy. The main purpose of the Act is to safeguard the environment and prevent future hazards. It is said to be implemented based on the United Nations Conference on the Human Environment held in Stockholm in June 1972.

The Act contains five chapters and twenty-six sections. This Act is concerned with the protection of the environment, human beings, plants and animals, and prevention of any kind of future hazard like Bhopal tragedy. 

This Act is also known as an Umbrella Act because it makes the Union and the State work in coordination for the various other laws like the Water Act and the Air Act.

  • The National Green Tribunal Act, 2010

This Act provides speedy trial to the cases related to matters concerned with environmental protection. In case of any violation of environmental law, or case human beings require protection against the use of hazardous chemicals this Act is applicable. The main purpose of The National Green Tribunal Act is to provide speedy disposal of cases.

This Act has five chapters and thirty-eight sections. This owns its established to Article 21 of the Indian Constitution which provides for “Right to a healthy environment”.

  • The Factories Act

The Factories Act, 1948 was enacted before the Bhopal accident. But, the provisions of this Act are in favor of the workers involved in factories, industries, and mines. The main purpose of this Act is to ensure the welfare of the workers, to improve the working conditions for the workers and also, it provides special provisions for women and children involved in the factories.

  • The Public Liability Insurance Act, 1991

According to the Public Liability Insurance Act,1991, a person can claim relief in case of an accident caused because of keeping any hazardous chemicals. The Act provides public liability insurance. This Act is based on “No-Fault Liability”. This means that it is the responsibility of the person to compensate for another irrespective of the fact that he was careful enough to avoid any kind of accident.

Widened scope of Article 21 of the Constitution of India 

Article 21 of the Indian Constitution states that every person has a right to life and personal liberty. Unless a court order, a person cannot be deprived of this right. This Article is considered as the “mini-constitution”. It includes many other rights within itself like, Right to Privacy, Right to Shelter, Right to Information. The Apex Court of India has widened the scope of Article 21 from time to time and by making ‘Right to a clean and healthy environment’ a fundamental right it added more to its dimensions. 

The Supreme Court in Subhash Kumar v. State of Bihar [7] held that the citizens of India have a fundamental right of living in a free pollution environment for their full enjoyment of life. This even compelled the local authorities to take measures to decrease the rate of pollution in their areas.

In Rural Litigation and Environment Kendra, Dehradun v. State of Uttar Pradesh [8] the Supreme Court admitted a Public Interest Litigation under Article 32 of the Indian Constitution and ordered some limestone quarries to close down their quarries. It was held that only those quarries which were fit for operating their business and caused less adverse effect could carry out their work. The fitness of a quarry was decided after an inspection. 

Initially, there was no provision regarding the protection of the environment but with time, the Supreme Court realized its importance and incorporated it as a fundamental right. There are other provisions, too, in the Indian Constitution that direct the State and the citizens to protect the environment. These provisions include Article 39(b), 47, 48, 49, 48 A and 51 A (g)

Amendment in Penalty 

According to Section 15(1) of the Environment Protection Act, 1986 if a person violates any provision of the Environment Protection Act then he shall be punished with imprisonment for a term which may extend to 5 years, or with fine which may extend to one lakh rupees, or with both. And, in case the offender continues to violate the Act then he has to pay an additional fine of Rs 5000 every day from the date of conviction till he stops violating it.

Section 15(2) states that in case the violation continues beyond a period of one year then he can be punished with imprisonment for a term which may extend to 7 years.

Introducing New Legislative Rules 

  • Hazardous Rules, 2008

The Hazardous Wastes (Management & Handling) Rules, 1989 was enacted under the Environment Protection Act, 1986. Later on, it was amended in 2000 and then in 2003. 

In 2008, the Hazardous Wastes (Management, Handling & Transboundary Movement) Rules, 2008 superseded the Hazardous Wastes, 1989 and its amendments.

The Hazardous Wastes (Management, Handling & Transboundary Movement) Rules, 2008 is concerned with the proper management in handling storing, collecting, and disposing of the ‘hazardous wastes’. The Schedule 1, 2 and 3 of the Rule divides hazardous wastes into different categories. The definition of ‘hazardous wastes’ under this Rule does not include exhaust gases, biomedical wastes, wastewater, etc.

  • Chemical Accident Rules 1996

The production process of different commodities involves dealing with many dangerous chemicals. The use of these chemicals, if proper care and caution is not taken, involves a high-level risk in case of any mishap. Therefore, the government of India introduced Chemical Accidents (Emergency Planning, Preparedness, and Response) Rules, 1996, so that in case of any emergency people would know exactly what to do.

Under these rules a Central Crisis Group, State Crisis Group and a District Crisis Group were to be formed, and these groups would deal with chemical mishaps and provide guidance in dealing with the issue. A list of hazardous chemicals has also been mentioned in the Chemical Accident Rules, 1996.

Conclusion 

No matter how many years have passed, the aftermath of the Bhopal tragedy can still be seen today. Even after holding UCC liable the loss of those people who lost their lives and the ones who are still suffering cannot be measured. Though it is important for the government to promote globalization it should ensure that there are no risks involved. Also, it is the need of the hour that the laws made are implemented in the best way possible because nothing is more important than the lives of the people.

References 

  1. A.I.R. 1990 S.C. 273.
  2. (1868) LR 3 HL 330.
  3. (1868) LR 3 HL 330.
  4. A.I.R. 1987 S.C. 1086.
  5. A.I.R. 1987 S.C. 1086.
  6. A.I.R. 1987 S.C. 1086.
  7. (1991) 1 SCC 598.
  8. 1985 A.I.R. 652, 1985 SCR (3) 169.

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Fundamental duties

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This article is written by Shivani Verma, a student of Guru Gobind Singh Indraprastha University, New Delhi. In this article, she has discussed various important aspects related to Fundamental Duties.

Fundamental duties of India

As an Indian citizen, certain rights and duties are provided to us. The duty of every citizen is to abide by the laws and perform his/her legal obligations. A person should always be aware of his/her fundamental duties. 11 fundamental duties are laid down by the Indian Constitution.

 

Origin and scope of fundamental duties 

Origin 

On the recommendations of the Swaran Singh Committee, the fundamental duties were added by the 42nd Amendment, 1976 in our Indian Constitution. The fundamental duties were originally 10 in numbers but in 2002, the 86th Amendment increased its number to 11. The 11th duty made it compulsory for each and every parent and guardian to provide the educational opportunities to their child who is more than 6 years but less than 14 years of age. These duties are borrowed from the Constitution of Japan.

Fundamental duties part 1 from Diganth Raj Sehgal

Scope 

Neither there is a direct provision in the Constitution for the enforcement of these duties nor there is hardly any legal sanction in order to prevent violation of these duties. These duties are obligatory in nature. The following facts provide for the importance of fundamental duties:

  1. A person should respect the fundamental rights and duties equally because in any case, if the court comes to know that a person who wants his/her rights to be enforced is careless about his/her duties then the court will not be lenient in his/her case.
  2. Any ambiguous statute can be interpreted with the help of fundamental duties. 
  3. The court can consider the law reasonable if it gives effect to any of the fundamental duties. In this way, the court can save such law from being declared as unconstitutional.

Fundamental duties taken from

The fundamental duties are taken from the USSR (Russia) constitution. The addition of fundamental duties in our constitution have brought our constitution aligned with the Article 29(1) of the Universal Declaration of Human Rights and with various provisions of the modern constitution of other countries.

11 Fundamental duties

Only one Article that is Article -51A is there in Part-IV-A of the Indian Constitution that deals with fundamental duties. It was added to the Constitution by the 42nd Amendment Act, 1976. For the first time, a code of 11 fundamental duties was provided to the citizens of India. Article 51-A states that it is the duty of every citizen of India:

  1. To respect the Constitution, it’s ideals and institutions, the National Flag and National AnthemIdeals like liberty, justice, equality, fraternity and institution like executive, the legislature, and the judiciary must be respected by all the citizens of the country. No person should undergo any such practice which violates the spirit of the Constitution and should maintain its dignity. If any person shows disrespect to the National Anthem or to the National Flag then it will be a failure as a citizen of a sovereign nation.
  2. The noble ideas that inspire the national struggle to gain independence, one should cherish them Every citizen must admire and appreciate the noble ideas that inspired the struggle of independence. These ideas focus on making a just society, a united nation with freedom, equality, non-violence, brotherhood, and world peace. A citizen must remain committed to these ideas.
  3. One should protect and uphold the sovereignty, unity and integrity of India– This is one of the basic duties that every citizen of India should perform. A united nation is not possible if the unity of the country is jeopardized. Sovereignty lies with the people. Article 19(2) of the Indian Constitution put reasonable restrictions on the freedom of speech and expression in order to safeguard the interest and integrity of India. 
  4. One should respect the country and render national service when called uponEvery citizen should defend the country against the enemies. All the citizens apart from those who belong to the army, navy etc should be ready to take up arms in order to protect themselves and the nation whenever the need arises.
  5. One should promote harmony as well as the spirit of common brotherhood amongst the citizens of India, transcending religious, linguistic, regional or sectional diversities and to renounce practices that are derogatory to the dignity of the women Presence of one flag and single citizenship not only reflects the spirit of brotherhood but also directs the citizen to leave behind all the differences and focus on collective activity in all spheres.  
  6. One should value and preserve the heritage of our composite culture– India’s culture is one of the richest heritages of the earth. So, it is compulsory for every citizen to protect the heritage and pass it on to future generations. 
  7. One should protect and improve the natural environment including forests, lakes, rivers, wildlife and a citizen should have compassion for living creatures–  Under Article 48A this duty is provided as a constitutional provision also. The natural environment is very important and valuable for each and every country. So each and every citizen should make efforts in order to protect it.
  8. One should not only develop the scientific temperament and humanism but also the spirit of inquiry and reform For his/her own development it is necessary for a person to learn from the experiences of others and develop in this fast-changing environment. So one should always try to have a scientific temperament in order to adjust with these changes.
  9. One should always safeguard public property and abjure– Due to unnecessary cases of violence that occurs in a country which preach for non-violence, a lot of harm has already been done to the public property. So, it is the duty of every citizen to protect the public property.
  10. One should always strive towards excellence in all spheres of life and also for the collective activity so that the nation continues with its endeavour and achievements In order to ensure that our country rises to a higher level of achievement, it is the basic duty of every citizen to do the work that is given to him/her with excellence. This will definitely lead the country towards the highest possible level of excellence.
  11. One should always provide the opportunity of education to his child or ward between the age of six to fourteen years Free and compulsory education must be provided to the children who belong to 6 to 14 years of age and this has to be ensured by the parents or guardian of such child. This was provided by the 86th Constitutional Amendment Act, 2002. 

Features of Fundamental Duties

The features of Fundamental duties are as follows:

  1. Both moral and civic duties have been laid down under the fundamental duties, like, “the Indian citizens should not only cherish the noble ideas that lead to the freedom struggle but they should also respect the Constitution, the National Flag and National Anthem”.
  2. Fundamental rights can be applied to foreigners also but the fundamental duties are only restricted to the Indians citizens.
  3. The fundamental duties are not enforceable in nature. No legal sanction can be enforced by the government in case of their violation.  
  4. These duties are also related to Hindu traditions or mythology like paying respect to the country or promoting the spirit of brotherhood.

Fundamental duties and Indian constitution

The Constitution was adopted in the year 1949, but it did not contain the provisions for fundamental duties. The Parliament of India not only realised the need to insert fundamental duties in the Indian Constitution but it also felt that everyone should perform such duties. A new part, that is Part IVA, was inserted by the 42nd Amendment Act, 1976 which provides for several fundamental duties that needs to be followed by the citizens of India. 

These duties are considered as “directory” as these duties cannot be enforced through the writ of mandamus because they don’t cast any public duties. Fundamental duties are the basic reminder of our national goals and basic norms of political order. They inspire an individual to inculcate in himself/herself a sense of social responsibility. The Supreme Court said that the fundamental duties can be used to interpret any statue which is uncertain. These duties provide educational and psychological value to the citizens of India. These duties uphold the spirit of Democracy and patriotism.

In the case of Ramlila Maidan Incident[1], the court held that the word “fundamental” is used in two separate senses in our Indian Constitution. When this word is used for rights then it means that these rights are very essential and any law which will violate the fundamental rights will be declared as void. But when this word is used for the duties then it is used in a normative sense as it set certain goals before the state which the state should try to achieve.

42nd amendment 1976

The 42nd Amendment Act, 1976 was approved during the Emergency period. The Indian National Congress which was at that time headed by Indira Gandhi approved this amendment. This amendment was regarded as the most controversial amendment. The provisions that were provided by this amendment act came into force on different dates. Most of the provision came into force on 3 January while others came into force from 1 April 1977. This amendment is also known as “Mini-Constitution” or “Constitution of Indira” because wide changes were brought to the constitution. 11 Fundamental Duties were laid down by the 42nd Amendment.

86th amendment 2002

Only a few constitutions in the world provide the guidelines stating the obligations and duties of the citizens. To govern the rights and the duties of its citizens, Canada and Britain lay significance on the Common Law and its judicial decision. It is said that one should be taught to follow fundamental duties at a younger stage because if this will happen then it will not be important to list the duties in the Constitution as it will not affect its implementation. 

The Unnikrishnan Judgement[2] provided that all the citizens who are below the age of 14 years have a right to free and compulsory education. Due to an increasing public demand for education, the government worked towards making education a fundamental right. In 2002, an amendment was inserted in Article 51A. Article 51(k) was added after Article 51(j) which stated that it is a fundamental duty of every citizen who is a parent or a guardian to provide opportunities for free and compulsory education to a child who is between 6 years to 14 years of age.

In M.C Mehta (2) vs. Union of India[3] the Supreme Court held the following:

  1. It is compulsory for all the educational institutions to organise a teaching lesson of at least one hour a week on the protection and improvement of the natural environment.
  2. It is the duty of the Central Government under Article 51-A (g) to introduce this lesson in all the educational institutions. 
  3. The Central Government should also distribute books free of cost on the same subject in all the institutes.
  4. To give rise to the consciousness among the people towards a clean environment, the government should organise ‘keep the city clean’ week at least once in a year.
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Fundamental duties committees

Swaran Singh Committee

The Chairperson of this committee was Sardar Swaran Singh who was given the responsibility to study the Indian Constitution during the National emergency. After declaring the emergency Indira Gandhi put the responsibility on this committee to study the Constitution and amend it keeping in mind the past experiences. Several changes were incorporated into the Constitution by the government based on the recommendations of the committee. 

The need and necessity of fundamental duties was felt during the emergency period. So in 1976, a committee was set up who made the recommendation for the same. The recommendation was made for including a separate chapter in the Indian Constitution under the heading Fundamental Duties. Citizens will be aware of their duties while enjoying their fundamental rights. This suggestion was accepted by the government and a new article that is Article 51A was included in the Indian Constitution which had 10 fundamental duties in it earlier. The government also said that it was a mistake that was made by the original framers of the India Constitution to not to include the fundamental duties at that time. The committee suggested for 8 fundamental duties but the 42nd amendment had 10 duties. Out of all the recommendations, not every recommendation was accepted.  

Some of the recommendations that were not accepted are:

  1. In case of non-compliance with the fundamental duties, the Parliament can impose penalty or punishment.
  2. In a court of law, such punishment or law won’t be questioned. 
  3. Fundamental duties also include the duty to pay taxes which was rejected.

Justice Verma committee

In order to plan a strategy and methodology for working out a programme that was started worldwide for making the fundamental duties enforceable in every type of educational institution and to teach these duties in every school, Justice Verma Committee was established in 1998. The committee took this step because it was aware of the non-operationalization of the Fundamental duties. The committee found that the reason for non-operationalization was due to lack of strategy for its implementation rather than lack of concern. 

The committee provided with the provisions like:

  1. No person can disrespect the National flag, Constitution of India and the National Anthem under the Prevention of Insults to National Honour Act, 1971.   
  2. Various criminal laws have been enacted which provide punishment to the people who encourage enmity between people on the grounds of race, religion, language etc.
  3. The Protection of Civil Rights Act  (1955) provided for punishments in case of any offence related to caste and religion.
  4. The imputations and assertions that are prejudicial to the nation’s integrity and unity are considered as punishable offences under various sections of the Indian Penal Code, 1860.
  5. In order to prevent a communal organisation to be declared as an unlawful association, the Unlawful Activities (Prevention) Act, 1967 was established.
  6. If the members of the Parliament or the state legislature indulge in any corrupt practices like asking votes in the name of religion then they will be held liable under the Representation of the People Act, 1951.
  7. The Wildlife (Protection) Act, 1972 protect and prohibit the trade in the case of rare and endangered animals.
  8. The Forest (Conservation) Act, 1980 was implemented to make sure that Article 51A(g) was properly implemented. 

Need for Fundamental Duties

Rights and duties are correlative. The fundamental duties serve as a constant reminder to every citizen while the Constitution specifically conferred on them certain fundamental rights. Certain basic norms of democratic conduct and democratic behaviour must be observed by the citizens. The then ruling party, Congress, claimed that what the framers of the Constitution failed to do is being done now. This omission was rectified by introducing a chapter on citizen’s duties towards the nation. In India, people lay more emphasis on rights and not on duty.

This view was wrong. In this country, there has been a tradition of performance of one’s duties even in partial disregard of one’s rights and privileges. Since time immemorial emphasis was on individual’s KARTAVYA which is the performance of one’s duties towards society, his/her country and his/her parents. The Geeta and Ramayana also provide that people should perform their duties without caring for their rights. 

Traditional duties have been given a constitutional sanction. If one clearly looks in the Constitution not only he/she will discover his/her rights but also the duties. A careful look at the Constitution will definitely solve the question of the people who claim that the Constitution only provides for the rights to the citizen and not the duties of the persons towards the society. The Fundamental Rights that are provided to all the citizens are present in the Preamble of the Indian Constitution like liberty of thought, expression, belief, faith and worship. These are not absolute rights as the state can put reasonable restrictions on them in the interest of society. The remaining Preamble put emphasis on the duties like justice, social, economic and political.

Importance of fundamental duties

The government in order to create a strong foundation with a strong national character introduced fundamental duties. It not only lay emphasis on human dignity but also creates a feeling of harmony in the community. Our society can only be uplifted if each and every citizen focuses on bridging the gaps that have been created in the society, by performing their duties towards the society. Judicial reforms help in enforcing such duties from time to time because there is no provision in the Indian Constitution for their enforcement. If every person wants their fundamental rights to be realized then everyone should fulfill their duties.

The importance of fundamental duties are as follows:

  1. Fundamental duties act as a constant reminder that the citizens while enjoying their fundamental rights should not forget about their duties towards the nation.
  2. These duties act as a warning signal for the people against any type of antisocial activities. 
  3. These duties gives a chance to the people to have an active participation in the society rather than being a spectator.
  4. These duties promote a sense of discipline and commitment towards the society.
  5. The courts can use fundamental duties for determining constitutionality of law. If any law is challenged in court for its constitutional validity and if that law is providing force to any of the fundamental duties then that law will be held reasonable.
  6. If the fundamental rights are enforced by a law then in case of its violation the Parliament can impose penalty or punishment for the same.

The Supreme Court of India ordered cinema halls to play National Anthem while portraying the Nation Flag. This was a remarkable step taken by the Supreme Court while giving the importance to the fundamental duties.

Criticism of fundamental duties

There were various grounds for criticism for fundamental duties. These include:

  1. Critics don’t consider the list of fundamental duties as exhaustive. They feel that many more important duties like paying taxes, casting votes that were also suggested by the Swaran Singh Committee were not included in this list.
  2. A common man cannot understand the complex words like composite culture that are present in the fundamental duties. Due to lack of understanding, the true meaning cannot be established. For him/her such words are difficult to understand. Moreover some duties are ambiguous in nature.
  3. These duties cannot be enforced by a court of law so, critics feels that it is of no use to include these duties in the Constitution.
  4. Some duties are of such a nature that they are being performed by the citizen in each and every case like paying respect to the National Flag and National Anthem. So there was no need to include these duties in the Constitution.
  5. These duties are placed in Part IV-A of the Indian Constitution that is after the Directive Principles of the State Policy, that’s why not much importance is given to them. According to the critics it should be placed in Part III after the Fundamental Rights. 

Fundamental duties case laws

In the case of Bijoe Emmanuel vs. State of Kerala[4] which is popularly known as the National Anthem Case, on refusing to sing the National Anthem in the school, three children of the Jehovah’s Witnesses were expelled from the school. There was a circular that was issued by the Director of Instructions, Kerala which made it compulsory for the school students to sing the National Anthem. These three children did not join the singing of the National Anthem but they stood up out of respect. They didn’t sing the National Anthem because their religious faith didn’t permit it and it was against their religious faith. They were expelled on the ground that they violated their fundamental duties and committed an offence under the Prevention of Insult to National Honours Act, 1971. The court reversed this decision of the High Court because they did not commit any offence and also they committed no crime under the Prevention of Insult to National Honours Act, 1971 as though they did not sing the National Anthem but they stood out of respect.

In M.C.Mehta (2) vs. Union of India[5], the Supreme Court held that it is compulsory for all the educational institute to organise a teaching lesson of at least one hour a week on the protection and improvement of the natural environment and it is the duty of the Central Government under Article 51A (g) to introduce this in all the educational institute. The Central Government should also distribute books free of cost on the same subject in all the institutes and also raise consciousness amongst people towards clean environment. The government should organise ‘keep the city clean’ week at least once in a year.

In the case of AIIMS Students Union vs, AIIMS[6] the Supreme Court held that the fundamental duties are equally important like the fundamental rights so the Court strike down the institutional reservation of 33% in AIIMS which is also coupled with 50% reservation discipline-wise which was violative of Article 14 of the Indian Constitution. The court also said that just because they are duties they cannot be overlooked. They have the same importance which the fundamental rights hold.

In Aruna Roy vs. Union of India[7], the court upheld the validity of the National Curriculum Framework for School Education which was challenged on the ground that it violated the Article 28 of the Indian Constitution and it was anti-secular because it provided for value development education relating to the basics of all religions. The court said that the NCFSF does not mention anything related to imparting religious instruction which is prohibited under Article 28 and education neither violate Article 28 nor the concept of secularism.

In order to make a right balance between Fundamental Rights and Duties the petitioner in the case of Hon’ble Shri Rangnath Mishra vs. Union of India[8] wrote a letter to the President so that he can give directions to the State in order to educate citizens in the matter related to fundamental duties. This letter was treated as a writ petition by the Court. But by the time this matter would be heard a report was submitted to the Government of India by the National Commission who was reviewing the Constitution at that time. Following suggestions were provided by the commission in the court:

  1. In order to sensitise the people and to create general awareness regarding the fundamental duties, the State and the Union Government should take proper steps on the lines that were recommended by the Justice Verma Committee.
  2. For generating awareness and consciousness of citizens related to fundamental duties, modes and manners needs to be adopted.

The court took into account the recommendations made by the National Commission and also directed the government to take necessary steps. The writ was disposed of.

In Government of India vs. George Philip[9], the compulsory retirement was challenged by the respondent from the service. Two years of leave was granted to him by the department to pursue advanced research training. After the repeated reminders he overstayed in foreign, so, an inquiry was instituted against him and the charge was proved. The High Court provided him with a remedy to join the service again on one clause that no back wages would be provided but the Supreme Court had set aside this order. The Supreme Court said that according to Article 51A(j) one should always strive towards excellence in all spheres of life of an individual and also for the collective activity so that the nation constantly rises to a higher level of endeavour, achievements and excellence could not be achieved unless discipline is maintained by the employees. The court also said that no order should be passed by the courts which destroy the essence of Article 51A and the order passed by the High Court, in this case, was destroying the essence of the Article.

The court in the case of Dr. Dasarathi vs. State of Andhra Pradesh[10], held that under Article 51(j) every citizen must abide by its duty to always strive towards excellence in all spheres of life and also for the collective activity so that the nation constantly rises to a higher level of endeavour and achievements. For this, the State can provide ways to achieve excellence according to the methods which are permitted by our Indian Constitution.

In the case of Charu Khurana vs. Union of India[11] the Supreme Court held that the State should provide for opportunities rather than curtailing it. The court also said that the duty of the citizen have also been extended to the collective duty of the state.

Enforcement of Fundamental Duties

The fundamental duties not only guide the citizen but also guides the legislative and executive actions of elected or non-elected institutions, organisations and municipal bodies. Duties are only observed by the citizens when either it is made compulsory by the law or under the influence of role models etc. So this makes it necessary to make suitable legislation whenever it is important for the citizens to observe the duties. These duties should be made operational only when the directions have been provided by the legislature and judiciary and still there is a violation of fundamental duties. But if the existing laws are inadequate and they cannot enforce the required discipline then the legislative vacuum needs to be filled.

The legal utility of fundamental duties and directive principles is the same. Fundamental duties are addressed to the citizens whereas directive principles address to the state and there is no legal sanction in case of their violation. If a person does not care about his/her fundamental duties then he/she does not deserve the fundamental rights. These duties are not legally enforceable but if any act is done by a citizen that is in violation of the fundamental duties then it would be considered as a reasonable restriction on the relevant fundamental rights.

The 42nd Amendment, incorporated duties in the Constitution and these are statutory duties and shall be enforceable by law. If there will be a failure to fulfil those duties and obligations then the Parliament, by law can impose penalties. The success of this provision will solely depend upon the manner and the person against whom these duties would be enforced. If the duties are not known to all, then there would not be proper enforcement of these duties. Due to the illiteracy of the people, they are not politically conscious of what they owe to the society and country. Homes, universities, or any other place can be made the centres for imparting in the performance of their obligations.

Fundamental duties complement fundamental rights

The Constitution of India not only provide with the fundamental rights but also with the fundamental duties. Although the fundamental rights were introduced in the Constitution much before the fundamental duties and are also enforceable by the court. 42nd Amendment, 1976 introduced the fundamental duties. But these duties are not enforceable. These are the moral duties of a responsible citizen. The fundamental duties must be complementary to the fundamental rights.

Article 21 of the Indian Constitution provides for Right to education and Article 51A(k) provides that all parents and guardians must provide their children with free and compulsory education at the age of 6-14 years. This shows that fundamental rights and duties are complementary to each other. 

But in today’s time people only want their rights and don’t want to perform their duties. There are many examples which shows that people while using their fundamental rights avoid their fundamental duties.

The recent example can be taken of what happened in JawaharLal Nehru University. People while exercising their fundamental right of Freedom of Speech and Expression raised anti India slogans in the campus of the university. While exercising this right they violated their fundamental duty that is laid down in Article 51A(c), that is the “power, unity, integrity of the country must be protected by its citizens”. 

Many political leaders often attract votes in the name of religion. While doing this they violate their fundamental duty that is provided in Article 51A(c) that is “the power, unity, integrity of the country” must be protected by its citizens. They divide the society into different religion and caste.

Democracy cannot establish its deep roots in the society until and unless the citizens don’t compliment their fundamental rights with their fundamental duties. While enforcing their fundamental rights they should fulfill their fundamental duties.

Relationship between the fundamental rights, directive principles and fundamental duties

The relationship between the fundamental rights, directive principles and fundamental duties are as follows:

In cases where there was a conflict between the constitutional validity of the legislation with the fundamental rights, then the Directive Principle of State Policy have been used to uphold the constitutional validity of such legislation. The 25th amendment in 1871 added Article 31C which states that any law enforced which was to give effect to the directive principles that were provided in Article 39(b)-(c) would not be held invalid on the grounds that they derogated from the fundamental rights that are present in the Articles 14, 19 and 31 of the Indian Constitution. The 42nd amendment proposes that Article 31C should be made applicable to all the Directive Principles. But the Supreme Court struck down this suggestion as it violates the basic structure of the Indian Constitution. For forming the basis of the legislation related to social welfare the fundamental rights and the directive principles have been used together.

The Supreme Court of India after the Kesavananda Bharati Case[12], adopted a view that fundamental rights and directive principles are not only complementary to each other but they both supplement each other by providing some goals to establish a welfare state by the means of social revolution.

The Supreme Court has also upheld the constitutional validity of various statutes which promote the objects that were laid down in the fundamental duties. These duties are not only obligatory for all the citizens but the Court can enforce them by making various laws. For this the Supreme Court has already given direction to the state in order to ensure effective implementation of these duties.

Fundamental duties are not enforceable through courts but fundamental rights are enforceable through the Supreme Court under Article 32 of the Constitution and the High Court has the power to issue writs for the enforcement of the fundamental rights under Article 226. The fundamental duties and the directive principles of the state policy that are provided in Part IV of the Indian Constitution are taken into account by the Courts while interpreting the fundamental rights or any restrictions that are imposed on such rights. 

The court in the case of Javed vs. State of Haryana[13] held that the fundamental rights have to be read with fundamental duties which are provided in Article 51A of the Indian Constitution and with the directive principles of the state policy that are provided in Part IV of the Constitution. They cannot be read in isolation.

In the State of Gujarat vs. Mirzapur[14] the Supreme Court held while considering the provisions regarding Article 48, 48-A and Article 51(g) that the directive principles of state policy and fundamental duties that are provided in Article 51-A of the Indian Constitution plays a significant role while testing the constitutional validity of any statutory provision or of any executive act. The Court also said that the reasonableness of any restriction that is cast by the law on the fundamental rights in the form of regulation, control or prohibition can be tested by taking the fundamental duties and the directive principle of state policy into account.

The court in Ramlila Maidan Incident[15] held that a balance has to be maintained between the fundamental rights and restrictions on one hand and fundamental rights and fundamental duties on the other hand. There would be an imbalance if importance is given to only fundamental rights or to the fundamental duties. Duty is considered as a true source of right. The courts consider the fundamental duties that are present in Article 51A while examining the reasonableness of the legislative restriction on exercise of various freedoms. The court also said that duties like protecting the sovereignty, unity and integrity of the country, provide safeguard to public property etc. are not insignificant.

It was observed in N.K. Bajpai vs. Union of India[16] that there is a common thread which runs between Part III, IV and Part IV-A of the Indian Constitution. First part provides us with the fundamental rights while the second part provides us with the basic principle of governance of the state and the third part provides the fundamental duties of the citizens of India. The court should consider all the constitutional aspect of fundamental rights, fundamental duties and the directive principle of state policy while interpreting any provision.

Conclusion 

The non-enforceability of the fundamental duties won’t affect its importance. Fundamental duties are an important aspect of a democratic state because it not only allows people to enjoy their rights but also reminds them to perform their duties which they have towards the nation. The word ‘fundamental’ which is attached to the duties makes them utmost important and thus it is required that they are to be followed by everyone. Many duties have also been set up as a separate law and are made enforceable by the law but this does not reduces the value of other duties that are provided in Article 51A. It is not only the duty of the government to provide everything in the Constitution, it is the people who should also be conscious about their role in the society. Even duties like paying taxes, right to vote must be performed by each and every citizen of the nation. These duties inculcates a sense of social responsibility in everyone. While interpreting the fundamental rights these fundamental duties are always taken into account. 

References 

  1. Ramlila Maidan Incident, In re, (2012) 5 SCC 123  
  2. Unnikrishnan Judgement, 1993 AIR 2178, 1993 SCR (1) 594 
  3. M.C Mehta (2) vs. Union of India, 1998
  4. Bijoe Emmanuel vs. State of Kerala, 1987 AIR 748, 1986 SCR (3) 518 
  5. M.C.Mehta (2) vs. Union of India, 1998
  6. AIIMS Students Union vs, AIIMS,  (2002) 1 SCC 428 
  7. Aruna Roy vs. Union of India, 12 September, 2002
  8. Hon’ble Shri Rangnath Mishra vs. Union of India, 31 July, 2003
  9. Government of India vs. George Philip, 16 November, 2006
  10. Dr. Dasarathi vs. State of Andhra Pradesh, 13 July, 1984
  11. Charu Khurana vs. Union of India, (2015) 1 SCC 192 
  12. Kesavananda Bharati Case, (1973) 4 SCC 225: AIR 1973 SC 1461
  13. Javed vs. State of Haryana, (2003) 8 SCC 369 
  14. State of Gujarat vs. Mirzapur, (2005) 8 SCC 534
  15. Ramlila Maidan Incident, In re, (2012) 5 SCC 123
  16. N.K. Bajpai vs. Union of India, (2012) 4 SCC 653 

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Articles of Association

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This article is written by Shivani Verma, a student of Guru Gobind Singh Indraprastha University, New Delhi and Pankhuri Anand, a student of Banasthali University, Rajasthan. In this article, elaborative discussion on the Article of Association including its contents, effects, entrenchment, the procedure of alteration and amendment has been done.

What is AOA?

The by-laws, rules and regulations which help in governing the management of internal affairs of the company and also conduct the company’s business are known as the “articles of association” of a company. The term article has been defined in Section 2(5) of the Companies Act, 2013. They mean articles of association of a company which were originally framed or altered from time to time that to be in pursuance of any previous company law or of this Act. All the regulations contained in Table A in Schedule I of the Act are also included in articles, so far these regulations apply to a company. A very crucial and pivotal role has been played by articles in regulating the affairs of the company. 

The full form of AOA is Article of Associations.

Importance of Articles of Association

The articles of association is a very important document for a company as it holds the rules, regulations and bye-laws for internal administration and management of the company. The articles are basically for the internal management of the company.

All the powers of directors and other officials are described in the articles. All the rights and obligations are prescribed under the articles of association. In the articles of a private company, all the restrictions are also laid down. All the provisions regarding the shares are also mentioned under the articles of association. In a matter of internal conflict, it is the article of association what’s referred to.

There are several rules, rights and provisions which leads to the importance of an article of association such as:

  1. The valuation of intellectual rights and assets are done in accordance with the articles.
  2. The appointment of directors and other key personnel are done in accordance with the articles.
  3. All the meetings either board meetings, annual meeting or a general meeting or any type of meetings are conducted in accordance with the articles.
  4. The managerial operations are dealt with the articles.
  5. The voting rights and other rights of shareholders are dealt with the articles of association.
  6. The audit and accounts are managed through the articles.
  7. The appointment, removal and remunerations are managed by the articles.
  8. The borrowing power is decided by the articles.
  9. The winding of the company is done according to the articles.
  10. The dividend policy is decided by the articles.

So, the articles of association hold key importance in any company or organisation as whole internal management is done in accordance with it.

Article of Association meaning in Hindi

In Hindi, we call articles of association as “साहचर्य के अनुच्छेद” that is “sahacharya kay anuchched”. So it is basically a document which regulates the rights of the members of the company as well as provides the manner in which the affairs of the company is to be conducted by its members.

Features of Articles of Association

The features of Article of Association are:

  1. It is a part of the constitution of an organization.
  2. It is a contract between the members and among the members themselves.
  3. It lays down the duties of stockholders also.
  4. Some statutory clauses should be included in the article of associations and other clauses can be chosen by the stockholders to make them the by-laws of the organization.
  5. The Court can declare a clause ultra vires if it is unreasonable.
  6. Article of associations can be inspected by anyone as they are a public document.
  7. Special interest in the provision of Articles of Association is taken by the lender of the organization.

Contents of the Articles of Association

All the rules and regulations of the company for its own working are set out through the articles. 

Clauses of Articles of Association

  1. Adoption of preliminary contracts:, A statement adopting all preliminary contracts.
  2. Number and value of the shares: What is the total number of shares and what is the value of shares needs to be mentioned.
  3. Issues of preference share: The number of preference shares issued need to be mentioned.
  4. Allotment of shares: How many shares have been allotted to whom and what are its values should be mentioned in the articles.
  5. Calls on shares: How much money is to be called on shares is to be mentioned.
  6. Lien on shares i.e., if the member is unable to fulfil his debt to the company, who will retain the possession of shares. 
  7. Transfer and transmission of shares: The provisions related to the transfer of shares need to be mentioned in the articles.
  8. Nominations: All nominations need to be mentioned.
  9. Forfeiture of shares: How can a company forfeit its shareholders.
  10. Alteration of capital: The provisions related to the alteration of shares must be mentioned in an article of association.
  11. Buyback: How can a company buy back its shares from existing shareholders.
  12. Share certificate:The provisions regarding the share certificate is required to be mentioned in the articles.
  13. Dematerialisation: The process by which securities are converted into electronic format.
  14. Conversion of shares into stock: Procedure to be adopted for the conversion of shares into stock should be mentioned.
  15. Voting rights and proxies: All the voting rights and proxies need to be mentioned.
  16. Meeting and rules regarding committees.
  17. Directors: their appointment and delegation of power.
  18. Nominee directors: Who can be appointed as a director to the board of a company in order to represent the interests of his appointor on that board.
  19. Issue of debentures and stocks: How can the debentures and stocks be issued.
  20. Audit Committee: All the provisions regarding the audit committee along with its functions and powers must be prescribed in the articles.
  21. Managing director, Whole-time director, Manager and Secretary.
  22. Additional directors: Who can be the additional directors.
  23. Seal: what will be the official seal of the company. 
  24. Remuneration of directors: The amount of remuneration to be provided to the directors.
  25. General meetings:When will the general meeting to be held.
  26. Director’s meetings: When will the director’s meetings will be held.
  27. Borrowing powers: Every company should have borrowing power and the provision regarding the borrowing power must be mentioned in the articles.
  28. Dividends and reserves: The amount of dividends to be distributed and reserves to be kept.
  29. Accounts and audit: When will be an audit of the accounts will be done.
  30. Winding up: The provisions related to the winding up of the company is required to be mentioned in the articles. in this procedure is required to be followed during the winding up.
  31. Provisions regarding common seal: Contains all the provisions regarding common seal.
  32. Capitalisation of reserves: The amount of reserve that needs to be capitalized.

While the preparation of the articles of association, the utmost caution should be exercised. Certain provisions of the Company Act are also applicable to the company at the same time “notwithstanding anything to the contrary in the articles”. So, the articles must contain the provisions in respect of all matters which are required to be contained therein so that the workings of the company couldn’t be hampered later.

Entrenched Articles of Association

The articles of association may contain the provisions for entrenchment. This concept was not included in the Companies Act, 1956. Entrench means to establish such type of attitude or habit which is very difficult to change. Thus this clause makes some amendments in the article of association difficult. If the company wants then it can include entrenchment provisions in the articles of association. This provision can be made either at the time of incorporation of the company or after the incorporation of the company by way of an amendment in the articles of association. In the case of a private company the amendment that is made to include the provision of entrenchment must be agreed by all the members and in case of a public company special resolution has to be passed to include this provision.[Section 5(4)]

Section 5(3) states that the alteration in the articles of association should be such that the altered provisions become more restrictive than those applicable in the case of a special resolution.

Whenever the condition of entrenchment are brought then it must be notified to the registrar in the manner prescribed under [Section 5(5)].

Articles are now compulsory in all cases.

Understanding Articles of Association

Rights of the members of the company, inter se, are dealt with by the articles of association. Hierarchy wise, the Articles of Association are subordinate to the memorandum of association. 

In Ashbury Railway Carriage and Iron Co. Ltd v. Riche [1], the general functions of articles were summarised as follows: 

The role played by articles is subsidiary to the memorandum of association. The memorandum of association is accepted as the charter of incorporation of the company. After its acceptance, the articles proceed to define the rights and duties and also the powers of the governing body between themselves and the company. Further, the articles define the mode and form in which the business of the company shall be carried on and the changes in the internal regulations of the company shall be made. 

The scope and powers of the company are laid down by the memorandum of association, whereas, the ways in which the objects of the company are to be carried on and to be framed and altered by the members:

  1. By defining the powers of the officers of the company and through the establishment of the contract both between the members of the company and the company and between the members inter se, the internal management of the affairs of the company is regulated by the articles. 
  2. Ordinary rights are governed through the above-said contract. 

Alteration of Articles of Association/ Amendment of Articles

A company is empowered with the statutory rights to alter its articles, provided the altering of articles is subjected to the provisions of this Act and the conditions contained in the memorandum. Section 14 of the Companies Act, 2013 lays down the provision for the alteration or amendment of the articles of association of the Company. This section specifies that subject to the provisions of this particular section and the conditions of the memorandum, a company may alter its articles through a special resolution and add that any alteration made shall be as valid as if it was originally contained in the articles. 

A company can amend its articles of association under Section 31 of the Companies Act, 2013 which states that in order to amend or repeal any provision in the article of association there should be a special resolution. A company can amend its articles of association by a special resolution of the shareholders. These amendments should meet the requirements and restrictions of the Companies Acts. 

Section 31(1) states that, if the alteration is about converting a public company into a private company then such alteration must be approved by the Central Government.

In Section 31(2), it is given that when the resolution for amended in the article of association is passed that resolution can take effect on the day it is passed or it can be on a later date provided in the resolution.

Section 31(3) provides that in case if the company is formed under Act No. 19 of 1857 and Act No. 7 of 1360, the power of altering the article extends to altering any provision contained in Table B that is annexed to Act 19 of 1857. In case of an unlimited company that is registered under such acts, the altering power extends to altering any regulations related to the amount of capital or its distribution in the form of shares, regardless of those regulations that are contained in the memorandum.

If the alterations are inconsistent with the requirements of Section 12 of the Companies Act, 2013 then a private company is prohibited from altering its article. The alteration of some article is restricted with some limitations in order to protect the interests of the minority members.

Altering Articles of Association

The alteration can be in case of:

  1. Conversion of a public company to a private company.
  2. Conversion of a private company to a public company.

The right to alter the articles is an essential factor for a company because it cannot in any manner deprive itself of the powers to alter its articles.

The alteration of articles can be done in any of the following manners 

  1. By adopting a new set of articles;
  2. By the way of addition or insertion of new clause/s;
  3. By removing a clause/s;
  4. By amending a particular clause/s;
  5. By substitution of a particular clause/s.

Restrictions on Alteration of the Articles of Association

There are certain limitations subject to which a company can exercise the power to alter its articles, which are as follows:

  1. Powers given by the memorandum shall not be exceeded by the alteration. The memorandum shall prevail in the event of a conflict between alteration and memorandum.
  2. Alteration of articles must not be inconsistent with the provisions of any other statute or with the provisions of Company Act, 2013.
  3. When on alteration there is a conversion of the company from a private company to a public company or vice-versa then the company also needs to follow the additional procedure of conversion prescribed by the law for the conversion of a public company to a private company and conversion of a private company to a public company.
  4. The alteration which has anything illegal or opposing public policy must not be included.
  5. The alteration must be beneficial for the company, that is it must be bona fide for it. If in a case alteration is beneficial for the majority of the shareholders and not beneficial for the company as a whole then the alteration is considered bad. Thus, alteration of articles cannot lead to discriminating between the majority and the minority shareholders of the same company for the sake of keeping the former at an advantageous position.
  6. No alteration can constitute fraud by the majority on the minority. 
  7. By alteration, the provision of retrenchment can also be inserted into the articles which put the effect that several provisions of articles can be altered only when the condition or procedure for alteration has complied with the procedure followed in the case of a special resolution.
  8. The provisions for retrenchment can be inserted only when agreed by all the members in the case of a private company and in case of a public company by special resolution.
  9. No retrospective effect shall take place by alteration of articles. Articles come into operation only from the date of the amendment.
  10. Subject to the above conditions, the alteration of the articles of the company can be done and no clause which is not alterable can be included in the Articles. 

Alteration against memorandum of association

There are situations when changes in the articles of association influence the memorandum of associations. In the case of Hutton vs. Scarborough Cliff Hotel Co. [2], in the general meeting a resolution was passed by providing the power to issue new shares with preferential dividend but no such power was provided by the memorandum. This alteration was declared inoperative as the issuing of new shares with the preferential dividend was considered as a variation of the constitution of the company fixed by the memorandum. Memorandum was silent as it neither authorises nor it prohibited the issue of preference shares. The court said that either expressly or impliedly the power of alteration of the articles is only subject to what is clearly prohibited by the memorandum.

The court in the case of Andrews vs. Gas Meter Co. Ltd [3], held the issue of shares valid. According to the 5th clause of a company’s memorandum the nominal capital of the company was €60,000, and it can be divided into 600 shares of €100 each. There was no provision related to preference shares either in memorandum or articles of associations. After passing a special resolution directors issue share bearing preferential dividend. The court said that if this had been forbidden by the memorandum then such issue will be invalid. But there was no such clause so this issue was valid.

Alteration in breach of contract

Some alteration in the articles of association operates as a breach of contract with an outsider. In Chithambaram Chettiar vs. Krishna Aiyangar [4], a company secretary accepted the job on the remuneration of Rs. 50 per month. This provision was provided in the articles of association. after the alteration, the monthly remuneration reduces to Rs. 25 per month. The court held that if the contract totally depends upon the provision of the articles of association then the alteration will naturally be operative but if the company has entered into an independent agreement than the company may repudiate it by changing articles but will be answerable in damages for breach.

In Hari Chandana vs. Hindustan Insurance Society [5], the plaintiff has taken insurance from the defendant company and they promised the plaintiff to pay a certain amount of money on a specified date. The company altered its article of association and the fund that has to be paid was to be paid out of a special fund. When the date of payment arises the special fund was insolvent. The plaintiff then sued the company. The court, in this case, held that the effect of alteration leads to a fundamental breach of contract which the company has previously entered with the plaintiff and in respect of this new article has become inapplicable.

Increasing liability of members

Unless and until a member gives his consent in writing who is protected by limited liability he/she cannot be converted into a member with unlimited liability. Only with the consent of the respective member an alteration increase the liability or let the member purchase more shares.

Fraud on minority shareholders

The power of alteration must be exercised fairly that is it must not constitute a fraud on the minority. This power should be exercised in good faith and in the interest of the company.

Procedure for alteration of Articles of Association

According to the procedures laid down under Section 14 of the Companies Act, 2013, the following procedures are to be followed for the alteration of the articles of association:

Step 1: Not less than 7 days less notice is required to be issued along with the agenda of the board meeting and in case of urgent business, a shorter notice in writing should be sent to every director of the company on his registered address to call for a “Board Meeting” where the proposal for alteration of the articles of association will be presented.

STEP 2: The meeting of the Board of Directors will be held:

  1. For the consideration and decision that the alteration of the articles of association is required.
  2. To pass approval for the alteration of articles for the approval of shareholders.
  3. To authorise any director to sign, certify and fill the form for alteration in the registrar office or any statutory body required to do such act and to give effect to the procedure of alteration.
  4. For passing the special resolution as laid down under Section 14 of the Companies Act, 2013, fix a date, time, venue and date for the general meeting.
  5. The draft notice of the general meeting along with the statement of explanation is approved which is annexed with the notice as held under Section 102 of the Companies Act, 2013.
  6. A director or Company Secretary is authorised in order to issue and sign the notice for the general meeting.

STEP 3: The draft is prepared and circulated to all the directors for their comments within 15 days from the date when the Board meeting has been concluded by any means of communication like a post, by hand, email etc.

STEP 4: A shareholder’s meeting is also required to be conducted on the date which has been fixed for the alteration of articles with the 3/4th majority. In the case of a private company having provision for entrenchment Section 114(2) is required to be followed along with Section 5(4).

STEP 5: After the special resolution is passed, a certified copy of the special resolution is required to file before the registrar with 30 days of passing the resolution under Section 114 of the Companies Act, 2013. 

STEP 6: The alteration is then prepared, signed and compiled in the general meeting.

STEP 7: All the necessary amendments in all the copies of the articles of association is made.

As discussed in the case of Southern Foundries v. Shirlaw [6] the company can alter its article even it would lead to a breach of contract but in those cases, the damages due to breach must lie against the company.

Effect of Alteration of the Articles of Association

The alteration of articles has the same binding effect as that of the original articles. These altered articles are referred to as originally framed articles or may be altered from time to time. The articles shall have a binding effect on both the company and its members to the same extent as if it was signed by the company and by each member.

The government is of the view that when the amendment of the articles of association of the company leads to the expulsion of a member from the management then it is against the principle of the company jurisprudence and considered ultra vires. The alteration should not lead to any provision which is contrary to law and when the alteration made is in accordance with the law then such alteration is valid and effective as the articles which have been framed originally.

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Legal effects of articles of association

Following are the legal effects of the articles of association:

The members are bound to the company

The article creates a contract which binds the members as well as the company. Each member is bound to the company and they have to follow the articles as well as the memorandum.

The members are equally bound by the articles made originally as well as which are altered from time to time as held in the case of Malleson v. National Insurance Co. [7]

Member can bring legal action against the company

As the articles bind the company and the members, if a company infringes the articles, a member can bring an action against it. For example, if a company does an improper payment of dividend then even an individual member can sue the company for an injunction. Also, the company is bound to the individual members with respect to their rights.

Normally an action in case of a breach of articles can be brought only by the majority of members. The individual members or the minority of members cannot bring suit except when the suit is for the enforcement of personal rights or to abstain the company from doing any illegal or fraudulent act.

The members are bound to the other members

The members inter se are bound by the articles and each member is bound by the other members. But, this does not imply that the articles lead to the creation of an express contract among the members of the company. So, the member of the company does not have the right to bring a suit against other members for enforcement of articles.

The company is bound to the outsiders

The company is bound to the outsiders and by outsiders, it means any person who is not a member of the company. Between the outsiders and the company, the articles do not give any contractual rights against the company. Even if the name of outsiders are mentioned in those documents as the company have contemplated for carrying out business then also there lies no contractual obligation.

Articles of Association when compulsory

For the following classes of company, it is mandatory to have their own an article of association and also, it must be registered:

Unlimited company

An unlimited company has been defined under Section 2(92) of the Companies Act, 2013 as a company having no limit on its member’s liability.

Companies limited by guarantee

The company having its member’s liability limited by guarantee has been defined under Section 2(21) of the Companies Act, 2013.

Private companies limited by share

A private company has been defined under Section 2(68) of the Companies Act, 2013 and a company with its liability limited by share has been defined under Section 2(22) of the Companies Act,2013.

Articles of Association under English Law

The concept of Articles of Association under the English Law is very similar to that of India. In the U.K. the law governing articles of association is The Companies Act, 2006 of the U.K. According to the Act, every company is required to have an article of the association if it is formed in England and Wales. No company can be formed legally without the articles of association. Under English Law, even while the formation of the company a set of model articles are required.

In every registered office, a copy of the articles of association is required to be kept. Just like the provisions in Indian Law, the articles of association can also be altered under English Law. There is a provision for the amendment of the articles of association by way of special majority i.e., with the agreement of the 75% shareholders.

Under English law, the articles of association may override the articles of association. Generally, the articles should be in accordance with the Companies Act, but it is not possible that always the provisions of Company Law will be suitable for every company. So, the articles of the company can override the company law under the English Legal System. To vary or exclude some of the provisions are allowed under English Law.

But, under the Indian Legal System, the articles must be in accordance with the Companies Act, 2013.

MOA VS AOA

Sr. No.

MOA

AOA

1.

Fundamental data is contained in MOA which is required at the time of incorporation of the company.

Rules and regulations that govern the company are contained in the articles of association.

2.

It must be registered at the time of incorporation of the company.

It is not necessary to register the articles of association.

3.

It is the supreme document.

It is not the supreme document, it is subordinate to the memorandum.

4.

It does not provide the company with the power to do something against the provision of the Companies Act.

It cannot exceed the powers contained in the memorandum of association as it is a subsidiary document.

5.

It should have six clauses.

According to the decision of the company, it is drafted.

6.

It contains powers and objectives of the company.

It provides the rules by which these objectives are to be implemented.

7.

It is the dominant instrument and it controls the articles of association.

The provision which is invalid to the memorandum will be declared as invalid.

Forms and Signatures of Articles

The forms and signatures of articles are dealt with the provisions laid down under Section 398 of the Companies Act 2013. The articles of association according to this section requires to be in:

  1. The articles are required to be filed under this Act in the computer-readable format and should be authenticated.
  2. The articles should be delivered or served into electronic form in the prescribed manner.
  3. The articles should be available for inspection in electronic form.

The submission of the articles to the registrar in electronic form should be made through the official portal made by the central government. For filing of the document in addition to the electronic means when required the application made in physical means is also required. The document needs to be signed by each subscriber of the memorandum of association along with their registered address and such signature must be made in the presence of one witness who will attest the signature.

Articles in relation to memorandum of association

Memorandum of association is a supreme document and article of association is a subordinate document. The articles should not contain any such provision whose effect will alter the condition that is provided in the memorandum. This is because the object of the memorandum is to provide the purpose for which the company is established whereas the articles provide the manner in which the conduct of the company has to be carried out. Alteration in the articles of association is done by a special resolution whereas in case of memorandum some of the conditions of incorporation cannot be altered except with the sanction of the Company Law Board

Unless and until the rule of ultra vires is abolished the memorandum will differ with the articles of association in a principal aspect. If the company does something that is beyond the memorandum than it is completely void and incapable of ratification whereas if a company does anything in contravention of the articles of association then such provision will be held irregular and can always be confirmed by the shareholders.

It was suggested in Anderson Case [8], that if there is ambiguity in the memorandum then the articles registered at the same time may be used to explain it. 

Constructive notice of memorandum and articles of association

The two most important documents of every company that are a memorandum of association and articles of association are registered with the registrar of the company. These documents become public documents as these documents are registered at the office of the registrar which is also a public office. So they are open and accessible to the public. It is the duty of each and every person dealing with the company to read and inspect all the documents. It is presumed that he knows all the contents of the documents at the time of coming into a transaction of the company. Whether a person actually reads them or not he will be presumed in the same position that he has read them. This type of presumed notice is called constructive notice.

The practical effect of this rule is provided in the case of Kotla Venkataswamy vs. Rammurthy [9]. In this case, the plaintiff accepted a deed of mortgage that is executed by the secretary and working director only. But, the articles of association requires that all the deed needs to be duly signed by the working director, managing director and the secretary. The court held that if the plaintiff consulted the document carefully then she must have rejected the document rather than accepting it. So nevertheless the bond is invalid.

Another effect to rule of constructive notice is the person who is dealing with the company has not only read the documents but he/she has understood them completely. There is constructive notice not only for memorandum and article of association but also for all the documents like special resolutions etc.

Statutory reform of constructive notice

This is more or less an unreal doctrine because people know a company through its officers rather than its documents. Section 9 of the European Communities Act, 1972 has repeal this doctrine. Section 35 of the Companies Act, 1985 incorporate the provisions of Section 9. In the case of TCB Ltd vs. Gray, Financial Times [10], the company was held liable because the debenture issued by the company was duly signed the solicitor as attorney of a director of the company but it was mentioned in the article of association that all the documents need to be signed by the director directly.

But this was changed in the case of Dehradun Mussorie Electric Tramway Co. vs Jagmandardas [11], the articles of association provided that the directors can delegate their powers other than the power to borrow. So even an overdraft taken by the managing agents would be binding on the company.

Doctrine of indoor management

Various principles in the corporate world help to ensure the safety of stakeholders. The doctrine of indoor management is one such principle that was evolved 150 years ago. The doctrine of indoor management is exactly the opposite of the doctrine of constructive notice. It provides some protection to the outsiders against the company as it softened the hardships that are faced by the outsiders while dealing with the company.

According to Turquand’s rule which is also known as the doctrine of indoor management, it is not the responsibility of the person who is dealing with the company to enquire those internal proceedings related to the contract are followed if such person is satisfied that the transaction he/she enters into is in accordance with the memorandum and articles of association. This doctrine states that the people who are dealing with the company to presume that the internal proceedings are according to the document which is submitted to the Registrar.

Origin of doctrine of indoor management

Form Royal British Bank vs. Turquand [12], the doctrine of indoor management was originated. In this case, there was a provision in the articles of association which states that the borrowing of money can be done on bonds and for this, a special resolution needs to be passed in a general meeting. The company said that they are not bound to pay the money as no such resolution was passed in a general meeting. But it was held that the company is bound to pay back the money as the plaintiffs have a right to infer that a resolution was passed related to this in a general meeting as directors could borrow subjected to the resolution.

Basis of doctrine of indoor management

This doctrine came to be the fundamental principles of Corporate Law and it continued to be applied because of various reasons such as:

  1. Internal matters of a company are not meant for public knowledge. A third-party can only presume the intention of the company but can’t ascertain the information that they are privy to.
  2. If not for the doctrine, the company could escape creditors by denying the authority of officials to act on its behalf.

Exceptions to the Doctrine of indoor management

Following are the exceptions to the doctrine of indoor management:

  1. Knowledge of irregularity: if the person who is dealing with the company has knowledge about the fact that there is a lack of authority of the person who is acting on behalf of the company. The outsider is well known about the irregularity so this doctrine will not apply in this case.

In the case of Howard vs. Patent Ivory Co. [13], the directors of the company could not borrow more than 1000 pounds without the approval of the company’s general meeting but the director borrowed 3500 pounds from another director that too the consent of the company’s general meeting. So the court held that debentures up to 1000 pound are good as the was aware of the facts.

  1. Forgery: a company is never bound by the forgery done by its officers. So this rule doesn’t apply when a person relies on a forged document as nothing can validate forgery. In the case of forged transactions, illegal transactions or a transaction which are void-ab-initio there is a lack of consent.

In Rouben vs. Great Fingal Consolidated [14], the signature of two directors were forged by the secretary of the company and the certificate was issued without the authority. The signatures of the two directors were important as it was a clause in the articles of association. The court, in this case, held that the holder of the certificate cant take advantage of this doctrine as it was a forged document.

  1. Negligence: if the person dealing with the company behaves negligently then, in that case, this doctrine will not apply. Thus when an officer does something which he should not have done it and the person dealing with such officer rely on him rather than making proper enquiries than the person cannot take the help of the doctrine of indoor management.

Binding force of memorandum and articles

Section 36 of Companies Act states that when the memorandum and articles of association are registered it binds the company and the members the same way as if each member and the company have respectively signed the documents.

Binding on members in their relation to company

The provision of the articles of association bound the members to the company. Articles of association constitute a contract between a company and its every member.

Binding on company in its relation to members

The company is bound to the members the same way members are bound to the company and if there is a breach of articles on the part of the company then the member is entitled to an injunction in order to prevent the breach.

But no binding in relation to outsiders

In order to give effect to the articles, neither the company nor the member is bound to the outsiders. No contract can be constituted between the company and the outsider through the article of associations.

How far binding between members

The law has not yet finally decided that how far the articles bind one member. It depends on the articles of association that how far one member will be bound as it only defines the rights and liabilities of the members. 

Conclusion

The articles of association can be found in every company and it is a document containing the rules, regulations and bye-laws for the efficient and hustle free administration of the company. The articles of association are compulsory for a few classes of the company such as an unlimited company, a company whose shares are limited by guarantee and a private company. The articles of association have all the important subjects which are required for the management and administration of the companies. It can even be altered or amended when required by following the procedures laid down in the Companies Act, 2013.

The provisions regarding the article of association were different in many aspects under the Companies Act,1956 but after the 2013 Act, many provisions were amended. Like earlier the amendment could not lead to the conversion of the company to public to private and private to the public but after the Act of 2013, it is possible. Similarly, there was also no provision of retrenchment, but after the 2013 Act the provision of entrenchment was also introduced. The article of association holds a very important position in any company and all the major aspects of a company’s management are dealt with the articles of association.

References 

  1. (1875)
  2. [1865] 62 ER 717
  3. [1897] 1 Ch 361
  4. ILR 33 Mad 36
  5. AIR 1925 Cal 690
  6. [1940] AC 701
  7. Malleson v. National Insurance Co.
  8. [1876-77] 7 Ch D 75
  9. AIR 1934 Mad 579
  10. [Nov 27 1985]
  11. AIR 1932 All 141
  12. (1856) 6 E&B 327
  13. (1888) 38 Ch D 156
  14. (1906) AC 439

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Cheque Bounce

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This article is written by Aayushi Swaroop, a student of the National University of Study and Research in Law, Ranchi. The article talks about the dishonouring of cheques and the various aspects to it. From, the types of cheques, to the reason behind dishonouring, the punishment and penalties, the inclusions and exceptions- everything has been incorporated in this article. 

Introduction

A cheque is a medium of exchange that promotes cashless transactions in an economy. The use of cheques as a medium of exchange has increased with time. People prefer to give cheques in transactions, instead of carrying currencies. Carrying currencies, especially when the amount is too large, is a risky business. Since cheques are mere paper issued by the bank authority to make payments, it, therefore, becomes a convenient way to carry out transactions as the chances of occurrence of theft or being robbed, reduces.

When the payee receives the mentioned amount by producing the cheque before the bank, the cheque is said to have been honoured by the bank. In case the bank refuses to pay the amount in exchange of his cheque, the cheque is said to have been dishonoured by the bank. Dishonouring of cheques or cheque bounce is when a ‘Payee’, that is, the person who is to receive the payment via cheque, fails to meet with the requirement of the bank, that is, there isn’t sufficient funds in the bank or the amount mentioned in the cheque exceeds the amount of money present in the bank. The maker of a cheque is called a ‘Drawer’, while the person directed to pay (the bank) is called ‘Drawee’, and the person in whose name the cheque is being signed is called the Payee.

It was by the Banking, Public Financial Institution and Negotiable Instruments Laws (Amendment) Act, 1988 (66 of 1988) that chapter XVII was incorporated in the Act dealing with the dishonouring of cheques or cheque bounce. 

Cheque

A cheque is a document which orders a bank to pay or transfer a certain sum of money, mentioned on the cheque, from the account of the person issuing the cheque to the person whose name the cheque bears. 

Section 6 of the Negotiable Instruments Act, 1881 defines cheque as a bill of exchange which is drawn on a specified banker and would not be payable unless on demand. A cheque is inclusive of an electronic image of a truncated cheque and a cheque in electronic form. 

  • A ‘cheque in electronic form’ refers to the exact mirror image of the paper cheque which is generated, written and signed in a secure manner. The digital signature, either with or without a biometric signature, and asymmetric crypto-system, ensure minimum safety standards.
  • Cheque truncation’ refers to a system of cheque clearance where a physical paper cheque is converted into an electronic form through digitalization. It is done to transmit the cheque to the paying bank. 

There are three parties to a cheque

  1. The person who issues the cheque is called the drawer.
  2. The person on whom the cheque is drawn, which is always the banker, is called drawee.
  3. The person to whom the payment is being made is called the payee. 

Characteristics of a cheque [36]

A cheque, although it has many features in common with bills of exchange and in many ways is governed by the same rules and principles [1] and in the enactments also, the general term ‘bill’ considers cheques under its head [2], it differs from bills in some respects. 

  1. Where a cheque is always drawn on a bank or a banker and can be drawn on demand without any days of grace [3], a bill of exchange is a negotiable instrument in writing, instructing a third party to pay a stated sum of money at the mentioned future date or on-demand.  Thus a bill of exchange which is drawn on a banker, if it is not payable on demand, then, it would not be called a cheque [4]. 

For example, when the District Board Engineer issues an order on Government Treasury, it is not called a cheque as the Government is not a bank carrying out business for profits. [5]

  1. Since there is no requirement of acceptance along with the prompt demand, there is also no privity of contract between the banker and the payee. Therefore, the payee cannot sue the bank when a cheque is not honoured by them. 
  2. A cheque is supposed to be drawn upon funds in the hands of the banker. [6]
  3. The person who issues the cheque is not discharged by the failure of the holder of the check to present it in due time. This is subject to an exception where the drawer has sustained damage due to the delay as laid down under Section 84 of the Negotiable Instruments Act, 1881. 

These differences were marked in the case of Ramchurn v. Luchmeechund [7].

Components of a cheque

A is comprised of the following requisites:

  • Date of cheque issue

The drawer of the cheque has to mention the date on which he is issuing the cheque. And from the date mentioned over there, the cheque remains valid for a period of 3 months.

  • Name of the payee

A cheque has to carry the official name of the person to whom the payment has to be made, that is, the payee. Name is for the identity of the person.

  • The option of ‘or bearer’

It is optional to fill the ‘or bearer’ slot mentioned on the cheque. It has to be filled when the payment being made via cheque is not to be received by a specific person but by whoever receives it (the ‘bearer’).

  • Sum of money

This is the most important part, where the drawer cites the amount of money he has to pay. The limit upon this option is that the amount being mentioned should not exceed what has been agreed upon with the bank or should also not exceed the amount present in the drawer’s account.

  • Amount in numbers

The sum of money that has been mentioned in words has to be written in digits as well. This provision has been included so as to ensure that both, the amount mentioned in numbers and words matches, so as to ensure the bank with the amount of money, the drawer is asking for. Sometimes it so happens that one wants to draw 1000 rupees and mistakenly adds one extra zero. This way, there could occur many false transactions. Hence, this provision has been introduced. 

Section 18 of the N.I. Act states that in case of discrepancy between the amount mentioned in digits and the amount mentioned in words, the number written in words shall prevail. 

  • Pre-printed account number

A cheque already carries the account number of the person signing the amount. This has been included for the banks to easily find out from whose account the payment has to be made. 

  • Signature of the drawer

The cheque being issued has to be signed by the person issuing it. This way the cheque gets authorized and is ready to be presented before the bank for encashing it.

  • Pre-printed cheque number and MICR code

The bottom of the cheque carries the MICR code and cheque number in printed form so that the cheque cannot be manipulated.

Types of cheque

  • Bearer cheque 

It refers to those cheques which can be drawn by the person whose name is written on the cheque. Since in this case, the bank does not ask for the identification of the person when the cheque is presented to it, bearer cheque involves great risk, as anybody who mistakenly finds this cheque would be able to withdraw the money. 

For example, if Katappa endorses a cheque to his friend, Bahu Mali, Bahu Mali would be able to collect the amount from the bank.

  • Order cheque

This is a cheque in which the word ‘bearer’ has been removed and replaced with ‘or order’ to ensure that it is payable only to the person mentioned therein as the payee, or to any other person to whom the cheque has been endorsed. The bank, in this case, could complete the transaction only when it identifies the payee, to its satisfaction, as the same person whose name the cheque carries.

Section 15 of the Negotiable Instruments Act, 1881 defines endorsement as an act where the holder of the cheque signs on the back of the cheque or any other negotiable instrument, with the intention of transferring the rights therein is called endorsing a cheque. 

  • Crossed cheque

A cheque that carries two parallel lines on either the top right or top left corner of the cheque is referred to as a crossed cheque. Along with the two parallel lines, words like ‘& CO.’, or ‘account payee’, or ‘not negotiable’ may be written. No cash transaction takes place when a crossed cheque is presented. The payment is directly transferred to the payee’s bank. 

  • Uncrossed/Open cheque

A cheque which does not have a cross on it is called an open or uncrossed cheque. It can either be a bearer cheque or an ordered cheque, where the payment could be encashed at any bank and the payment could be received, either at the counter of the bank or could be transferred directly to the account of the payee.

  • Anti-dated cheque 

When the person issuing the cheque mentions a date earlier than the date on which it is being presented to the bank than the cheque is called a anti-dated cheque. An anti-dated cheque is valid only up to 6 months from the date mentioned therein. For example, I am to issue a cheque to Dr. Gareeb Gulati today, 17th July, 2019, but I mention the date on the cheque as 31st July, 2019. 

When suppose a contract is delayed anti-dated cheques can be issued to avoid any unnecessary trouble to the party. 

  • Post-dated cheque

While issuing the cheque, when the drawer mentions a future date rather than the date on which is it being issued, then such cheques are called post-date cheques. For example, if a check is being issued on 5th September, 2017 and carries a date of 6th September, 2018, then it would be called a post-dated check and the payee can withdraw it only after 6th September, 2018.

So, in cases where the person issuing the cheque does not have sufficient balance in his account, but is bound by a contract to pay the amount., then he could issue a post-dated cheque. 

  • Stale cheque

As per the Reserve Bank of India’s (RBI) guidelines, which is into effect from 1st April, 2012, a cheque is valid only up to 3 months from the date of the cheque. Once the duration expires, the bank would not collect the cheque as banks do not collect stale cheques.

  • Mutilated cheque

When a torn cheque is presented before the bank, divided into two or more pieces, it is called a mutilated cheque. In this case, the bank will not accept the cheque. But under certain circumstances, like if the cheque is mildly torn, the bank may accept it, though with the drawer’s confirmation for crediting the same.

  • Blank cheque

A cheque which carries only the signature of the person issuing the cheque and does not contain all the requisites, like the amount to be paid, date, etc. is called a blank cheque. A blank cheque is referred to as carte blanche in legal parlance.

This type of cheque comes in to picture when the payment is to be made based upon an uncertain future event. Or it can even be used for the purpose of gifts. For example, Kabir, a father, out of love of her daughter, Naina, becoming a doctor, gives her a blank cheque, saying she could fill it with whatever amount she likes. However, the problem with blank cheques is that one could easily be used for illicit purposes. In the above example, Naina could sign an amount which is not reasonable and take away all the amount her father had in the bank. 

In order to avoid crimes like illicit use of blank cheque, one should follow these instructions:

    • Use ‘A/c payee’ instead of ‘or bearer’

In case a blank cheque is being signed is required that one writes ‘A/c payee’ on the right-hand side top corner of the cheque. It should be written between two parallel lines crossing the sides. And the option of ‘or bearer’ has to be removed. This is done in order to ensure that the blank cheque is being given to a specific person and not to anybody who finds the cheque, as is the case in when ‘on bearer’ is written on the cheque.

    • Write the name of the payee in closed space

After the name of the payee has been written, it is important that horizontal line encloses it. This is so that nobody could add a name or surname and falsely issue the money in his own name. 

    • The amount written in words should end with only

The amount that is to be paid when written in words should end with only to make it definite. Also, any extra space should not be between the words, and also not while writing the digits. For example, while writing the digits, the digits after a point, i.e. paisa, should be determined with ‘/’ and not space. 

    • Do not sign on the MICR band

It is very important to put one’s signature just above the name and ensure that the MICR band is not affected. If not followed then the cheque would not be read by the bank and would further lead to the dishonouring of the cheque by the bank.

    • Make sure you mention the date

In case a person leaves the column of date, then there is a high possibility that someone could use it as per his/her own convenience and mention the date at the time when he knows that your account would not be having sufficient fund to discharge the liability. This would lead to dishonouring of the cheque. 

    • Do not overwrite

Most of the cheques get dishonoured due to overriding. One must avoid overwriting on cheques. 

  • Self cheque

A self cheque is one where the account holder’s name is mentioned on the cheque and can be used to encash money in physical form from the branch where the drawer has an account. 

  • Pay yourself cheque

It is a crossed cheque issued in the bank’s name in order for the bank to deduct money from the account of the drawer in exchange for buying bank’s products like drafts, pay orders, fixed deposit receipts, etc. 

  • Travellers’ cheque

The cheques which are used by a person while he is travelling is called traveller’s cheque. These cheques can be encashed in any other country where foreign currencies are acceptable. 

  • Banker’s cheque

They cheques which are issued by banks itself guaranteeing payment, and which cannot be dishonoured as the money is paid to the bank beforehand, are called banker’s cheques.

  • Cheque Cancel

A cheque on which the word ‘cancelled’ is hand-written between two parallel lines crossing the cheque is called a cancelled cheque. It is bereft of any requisites and is presented as a proof of having an account with the bank. 

Need for a cancelled cheque

  • A cancelled cheque is required at the time of opening a savings account or current account in the bank.
  • When a person desires to have an Electronic Clearance Service (ECS) from the account, he will have to produce a cancelled cheque before the bank.
  • A cancelled cheque is required for KYC (Know Your Customer) purposes.
  • If a person has to withdraw funds from  Employee Provident Fund, one will have to present a cancelled cheque.
  • The person who is applying for a loan, attach a cancelled cheque in order to send the request for processing the loan amount. 
  • When a person wants to buy an insurance policy, he is required to submit a cancelled cheque along with other documents.
  • A cancelled cheque has to be submitted while opening a Demat account, that is, an account for transacting money. A Demat account is where an investor keeps his share in electronic form. Since the stocks in this account remains dematerialized is also known a dematerialized account. (Dematerialization refers to the process of converting physical shares into electronic form.)
  • When repayment of a loan is made by availing the facility of EMIs (Equated Monthly Installment), one is required to present cancelled cheque when finalising the method of repayment using EMIs.

E-Cheque

E-cheque was developed by a consortium of Silicon Valley IT researchers and merchant bankers in their quest for improved methods of transaction which is safe and secure. Since its development, it has been in wide use, with crores of transactions taking place every day. 

Meaning

With the rapid advancement in payment technologies, e-commerce transactions have experienced tremendous growth. One such payment method, where payment is made via the internet or any other data network, is the use of e-cheque. An e-cheque is a document in electronic form which acts as a substitute for physical paper cheques. E-cheques carry signatures in digital form, that is, e-signatures. 

Therefore, it is a mode of payment via the internet where no physical paper is required and payments could be made using cheques in electronic form. This method is known to be a faster and safer way of making payments as it comes with several security features, like, authentication, public-key cryptography, digital signatures and encryption, etc.

E-cheque advantages and disadvantages

Among many competitions cropping up, one competition is between cash and electronic money. The public demand for a virtual wallet is on the rise. The various advantages and disadvantages associated with this method are stated below:

Advantages to the customer

  • Since there is no physical movement of the cheques, customers do not have to worry about their cheques getting lost in the process. It thus reduces the possibility of loss of cheques.
  • E-cheques are a swifter way of making payments and so the payment gets cleared within a span of 3-4 working days. It, therefore, saves one’s time.
  • This method of exchange is more secure than physically carrying cheques as there is a risk of becoming a victim of theft or robbery.
  • This method is cost-effective as it does not involve much use of a resource, or use of many resources.
  • Since the electronic payment method keeps a record of all the previous transactions and one could access the history of their payments within seconds and control their expenses.
  • The customer is required to pay a very low commission in comparison to UPT (Unattended Payment Terminal). Here UPT refers to the self-service solutions, that is, where the customers could activate the transactions themselves.
  • This method has a comprehensible user interface which makes it a user friendly method. It reaches people from every corner of the world.
  • Any person, from anywhere, at any time, can make use of this method provided there is internet facility. This also makes it a convenient method of making payments.

Advantages to the bank

  • The paper clearing process becomes less risky and convenient as everything is done online.
  • Advance methods of verification and reconciliation, therefore, fewer chances of making mistakes.
  • There are no geographical restrictions.
  • Since there is no physical carrying of cheques, therefore, it is cost effective and also saves the time of the banks.
  • Since the accounting servers look into the cheques getting honoured, there are no cases of dishonouring of cheques.
  • E-cheques reduces the cost of processing as it does not require any manpower to process and also there is no fee for depositing or transacting money. 
  • Setting up an e-cheque platform is less resource consuming. It reduces the use of fuel thereby helping in the reduction of emissions of greenhouse gases which is was created while transporting paper cheques. 

Disadvantages of e-cheque

  • Not many people are technologically sound and therefore could not avail this facility.
  • Increased chances of misuse of these methods, hacking, online frauds, etc.
  • The major challenge posed by banks are the thousands of unauthorized transactions that take place without any traceable records.
  • Since here transactions are made via the internet, the possibility of network failure remains high, which leads to delayed payments.
  • It is not necessary that both the payer and the payee should have access to e-cheques facility.
  • The total number of transactions per day and the total amount of money which can be drawn in a single transaction and per day is subject to restrictions.

Reasons for Dishonour of Cheque

  • Insufficient amount in the account to meet the payment amount.
  • If, before presenting the cheque to the bank, the drawer closes his account.
  • Overwriting on the cheques.
  • Absence of signature or mismatching of signature with the specimen’s signature which the bank is having.
  • On the order of the drawer to stop the payment on that cheque.
  • Absence of the payee’s name or if it is not written clearly.
  • If there is no match found between the amounts mentioned in figures and digits.
  • Absence of the account number or if it is not clearly written.
  • If any court orders to stop the payment on the cheque.
  • Upon the death or unsoundness of mind or insolvency of the drawer.
  • If the changes made on the cheque are not approved by the drawer.
  • Absence of date or mentioning of incorrect date.
  • When the date mentioned has expired the duration of 3 months.
  • If the cheque comes in tormented state, i.e. torn, wet or spotted.

Section 138 of the Negotiable Instruments Act

The section states that when a person who has an account with the bank wants to make a payment from that account to some other person for the discharge, in whole or in part, of any debt or other liability, and that is returned by the bank is it called dishonouring of the cheque. The reason for returning the payment could be insufficient bank balance to meet the payment requirement or when the mentioned amount exceeds the value supposed to paid from that account by an agreement made with the bank. Such a person would be punished with imprisonment which may extend up to 2 years, or with fine which may extend to twice the amount of the cheque, or with both. 

This provision would not be applicable if:

  • The cheque has been presented to the bank within the period of six months from the date of the cheque or within the period of its validity (which is 3 months), whichever is earlier;
  • The payee or the holder, within 30 days of the receipt of information by him from the bank regarding the return of the cheques as unpaid, makes a demand for payment from the drawer of the cheque, for the mentioned amount by giving a notice, or in writing, in the due course of the cheque, as the case may be; and
  • The drawer of the cheque fails to make a payment to the payee of the said amount or, as the case may be, to the holder in due course of the cheque, within 15 days of the receipt of the said notice. 

Essentials for actions under the provision

Following are the conditions that need to be met to constitute an offence within the ambit of this section.

  1. The cheque that has been issued must be for the purpose of discharging, in whole or in part, any debt or any other liability.
  2. It is required that cheques be presented to the bank before the period of 6 months or within the period of its validity (which is 3 months), whichever comes earlier.
  3. Within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid should the payee or the holder give a notice in writing. This should be done by the payee or the holder in due course.
  4. Once the drawer has received the receipt of notice by the payee or the holder in due course, the drawer should have failed to make payment for the amount mentioned in the cheque, within the period of 15 days from the date of receiving the receipt of the said notice. 
  5. A complaint should be filed within one month from the date of expiry of the grace time of 15 days, after the non-payment of the amount due on the dishonoured cheque. This should be done before a Metropolitan Magistrate or any authority not below the rank of Judicial Magistrate of the first class. If the complainant satisfies the court that he had sufficient cause for not making a complaint within such period, the court may take cognizance of it. This has been mentioned under Section 142 of the Negotiable Instruments Act, 1881.  
  6. The offences that fall within this Act are compoundable offences. Compoundable offences are the ones where the party could agree to make a compromise and may choose to drop the charges which they have levied. 
  7. One of the essentials of this section is that the debts that is to be recovered is legal. 

Legally Recoverable Debts

Section 138 of the Negotiable Instruments Act, 1881 incorporates the term “debt or other liability”, which refers to legally enforceable debt or other liability. [42]

For example, if a cheque which has been dishonoured was issued against a time barred debt, then no liability would arise under Section 138, as the debt was not legally recoverable. Also, in cases where a cheque is being issued as a gift or a donation or for any other charitable purpose, it would not be covered under the ambit of this section [Mohan Krishna v. Union of India]. 

Summary of the essentials 

  • It is necessary that the cheque gets dishonoured 

According to Section 138 of the N.I. Act, it is necessary that the cheque is dishonoured by the bank. This is to ensure that the payee gets his payment without any hazard. The given provisions do not apply to the dishonour of other negotiable instruments. 

  • The purpose of the cheque is to discharge a legally recoverable debt

A cheque is issued by the drawer for the purpose of discharging, either the full amount of a partial sum of money, of the debt that he holds towards the payee. The term debt in this situation refers to those debts which are legally enforceable. In case the drawer issues a cheque as a gift or for the purpose of charity, then such cheques cannot be dishonoured as they are not for the reason of discharging legally enforceable debts. Hence, no liability would arise under Section 138 of the N.I. Act.

  • Validity period

For the cheques to get honoured, it is necessary that it be produced during its validity period, that is, within 3 months from the date on which it was drawn.. 

  • Insufficient funds

In the case where the amount mentioned on the cheque exceeds the bank balance, the cheque would get dishonoured. Also, if the sum of money mentioned on the cheque exceeds the limit of the sum of money that was supposed to be withdrawn as per the agreement with the bank, the cheque would not be honoured by the bank.

  • Special remarks

If a cheque comes with either, ‘account closed’, or ‘refer to the drawer’ or, ‘stop payment’, written on it, then by virtue of Section 138, the cheque would not be honoured by the bank. 

  • Failure to pay within 15 days

If the drawer fails to make the payment within the validity period and the payee issue a notice warning the drawer to pay it within 15 days, and still the drawer does not pay the money, the liability shall arise within the scope of Section 138 of the NI Act.

Legal Notice for Cheque Dishonour

Legal notice of dishonour of cheque refers to the information which the payee gives to the drawer, about the fact that the cheque has been dishonoured. (What a bank sends to the payee intimating the latter of the dishonour of the cheque is called a ‘return memo’.) This notice serves the one who is to be held liable for not following the rules and regulations laid down in the principle. The notice acts as a warning for the offender, bringing to his notice his liability.

If the authority delays the giving of the notice, then the plaintiff might be discharged from his liability with respect to the dishonouring of the cheque. 

Notice of dishonour by whom

The notice of dishonouring of cheque(s) is released by a party when he wanted to hold some prior party liable for the dishonouring of the cheque(s). The party giving the notice could be

  • The holder, or
  • A party to the instrument who remains liable for it.

The notice may be sent by the payee or the holder of the cheque in due course.

Service of notice

Under Section 27 of the General Clauses Act, 1897 there is a presumption regarding the service of notice, according to which, the service of notice would come into effect only when it has been sent to the correct address by registered post. As per the provision, if a person is filing a case under Section 138 of the Negotiable Instruments Act, 1881, it is not necessary for him to state in the complaint that the service of notice given to the accused was either evaded by him or that he had a role to play in the return of the notice unserved. However, stating the same may help strengthen the Complainant’s case by giving an impression of the Drawer’s guilt to the court.

In the case where the notice could not be served or delivered as the house of the drawer was locked, Section 27 of the General Clauses Act, 1881 would apply to a notice sent by post as decided in the case of V. Raja Kumari v. P. Subbarama Naidu & Anr.  [8]. The court also clarified that the burden of proof for the claim that the notice was not really served and that no liability could arise for not being responsible for the non-service would be on the drawer.

There are certain guidelines which were laid down regarding the rule that the notice would be considered as served if provided the court with proper reasons like unavailability of the person at the house, doors locked, or shop closed, etc. the guidelines were laid down in the case of (at present in) Kalamba Jail v. Gautam Umed Parmar [9]:

  1. Service of notice cannot be put to question if the notice has been sent to the correct address of the drawer, fulfilling the requirement under Section 138(b) of the N.I. Act, 1881.
  2. There is no need for emphasizing on the mode or manner of issuing a notice to the drawer.
  3. For filing of the case, the court must be convinced that a case under the given section is applicable and that it meets the statutory requirements.
  4. The drawer can then defend himself by stating that he did not have the knowledge of the notice which was delivered to him or that the notice was never tendered or, the postman’s notice is false or fake or, that the notice was delivered at the wrong address altogether. 

Essential Documents for filing the complaint

Under Section 142 of the Negotiable Instruments Act, 1881, there is only one eligibility requirement for filing a complaint and that is, the complaint is filed by the payee or the holder in due course. The complainant should be a corporeal person, capable of making a physical appearance in the court. [10]

The basic documents required for filing the complaint

  • The complaint should have been filed under Section 138 of the Negotiable Instruments Act, 1881, containing an outline of the facts.
  • There is also a requirement for pre-summoning evidence by way of Affidavit.
  • At the time of filing the complaint, the complainant should produce a list of witnesses.
  • All the documents essential to the case should be submitted along with the list of the documents being submitted.
  • At the time of filing the complaint, the client should handover a Vakalatnama in favour of his counsel which is to empower the advocate to act on behalf of his client.
  • The notice of demand (legal notice issued by the payee to the drawer under Section 138) along with the original cheque return memo has to be presented with the complaint.

Other supporting documents required for filing the complaint

  • Where a party to the case is a company , a copy of a board resolution is required which authorises the complainant’s advocate for representing its case in the legal proceedings.
  • The original, and no photocopied, or scanned document, of the dishonoured cheque, has to be submitted.
  • A Copy of the legal notice has to be provided.
  • A copy of the return memo has to be provided.

Limitation Period

From the date of issuance of receipt of the notice by the drawer, a 15 days period (‘Notice Period’) is given in order to make the payment of the amount of the dishonoured cheque. Pursuant to clause (b) of Section 142 of the Negotiable Instruments Act, 1881, if a complaint is registered under Section 138 of the Act, it should have been filed within one month of the expiry of these 15 days. However, the court has the power to overlook the delay in case the complainant provides a reasonable argument for such a delay.

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Jurisdiction of Courts

In an amendment made to the N.I. Act in 2015, that is, the Negotiable Instruments (Amendment) Act, 2015, it was laid down that the jurisdiction of filing a complaint under section 138 of the Act would be the place where the drawee bank is situated. The court, in the case of Dashrath Rupsingh Rathod v. State of Maharashtra & Anr. [11], stated that, “Logically, the place, site or venue where the judicial inquiry of the case and the trial of the offence should take place should be restricted to the area where the drawee bank is situated.” But, later, after the amendments, in the case of Sh. Vikram Monga v. Sh. Sanjay Dhingra [37], the court in para 13 has specified that the Section 142(2) lays down: The offence under Section 138 of the N.I. Act would be inquired into and would be tried only by the court whose local jurisdiction:

  1. In case where the cheque is delivered to encash it from the account, then the case would be filed in that branch where in due course, the holder or the payee, as the case may be, was maintaining an account; or
  2. In case where the cheque has been issued by the drawer otherwise through an account, then at that place where the branch of bank is located in which the drawer in the due course has been maintaining an account.

How to initiate the case under the section

  • After the cheque has bounced, the payee would warn the drawer of the cheque that he would initiate a proceeding under the N.I. Act, if the drawer does not clear the payment within a period of 15 days from the date of receipt of legal notice.
  • In case drawer doesn’t make the payment within these 15 days, then the payee is entitled to initiate complaint proceedings under Section 138 of the N.I. Act within 1 month of the end of such period.
    • There exists no format for drafting such notices, as it is just to inform the drawer that a case is being filed against him for making a default on payment.
    • The constituents of the demand notice would be:
  1. A statement clarifying that the cheque was presented to the bank within its validity period (3 months).
  2. Statement describing the debt and the circumstances surrounding the manner of incurring such debt.
  3. The demand notice should also contain all the information regarding the dishonoured cheque, like why it was dishonoured, etc.
  4. The sum of money that the drawer needs to pay within 15 days of receiving such notice.

Court Fees

There exists no blanket provision for court fees across states. Different states charge different court fees. The fees which the court charges is not much in such cases. Depending upon the amount stated in the cheque, the court fees may vary.

In Delhi, the court fees for cheque bounce matters is merely Rs 2, for which a court stamp is required to be applied to the Complaint. In the state of Madhya Pradesh, the following schedule of fees is applicable.

Amount mentioned on the cheque

Court fees

Upto Rs. 1,00,000

5% of the amount of dishonoured cheque, subject to minimum Rs. 200

More than Rs. 1,00,000 and less than Rs. 5,00,000

Minimum Rs. 5,000 + 4% on amount in excess of Rs. 1,00,000

More than Rs. 5,00,000

Minimum Rs. 21,000 + 3% on the amount in excess of Rs. 5,00,000 subject to maximum Rs. 1,50,000.

Procedure after the complaint has been admitted and the court has taken cognizance of the case

  • The court would issue a summons in favour of the person being accused, for appearing in the court on the date specified by the court itself.
  • In case, if the person being accused by dishonouring of cheque, fails to appear before the court on the specified date, then the court has the power to issue a bailable warrant upon the request of the complainant.
  • In case, the person being accused of the offence does not make an appearance even after issuance of a bailable-warrant, then the court may order to issue non-bailable warrant against him.

Scheme of Prosecution under Section 138

The procedure prescribed under Section 138 of the Act talks about the punishment in cases of dishonouring of cheques but does not lay down the process to be followed during the investigation of the said offence.

In order for the parties to initiate prosecution, the payee or holder in due course claiming payment is required to file a written complaint before the appropriate authority having territorial jurisdiction. 

The complaint filed should mention all allegations that the payee seeks to make against the drawer of the dishonoured cheque and those allegations should be based on the following ingredients that constitute the offence of dishonouring of cheque under Section 138 of the N.I. Act:

  • That, it has to be proved that the person had issued a cheque while having a bank account with the respective bank;
  • That, when the signed cheque was produced before the bank, the bank without making any payment, returned it;
  • That, the cheque was presented within the period of 6 months from the date when it was drawn, or within its validity period, whichever is earlier;
  • That, the payee, on receiving an intimation from the bank regarding dishonour of cheque (through a return memo), sent him a  notice in writing, asking for the payment of the amount mentioned in the cheque;
  • The notice being issued by the payee should have been sent to the drawer within a period of 30 days from the date of the receipt of the information by the payee from the bank, regarding non- payment of the amount mentioned on the cheque and for the return of the cheque;
  • That, if in those 15 days from the date of the receipt, the drawer of the cheque does not make the payment, he would be held liable for the dishonouring of the cheque under Section 138.

Redressal for defendant in case under Section 138

Filing of Summary Suit

The process of filing a summary suit is an alternative remedy being civil in nature available to the creditor of a debt for the recovery of the debt amount, which the creditor may opt for when the limitation under Section 138 runs out or otherwise. Under Order XXXVII of the Code of Civil procedure, 1908 the plaintiff has the right to file a ‘summary suit’ which ensures that the defendant does not get any chance to defend himself unless he seeks permission from the court to do so. A summary suit may be filed for promissory notes, cheques, etc and is widely used in civil matters. It doesn’t give rise to criminal charges as the purpose of issuing it is only to recover the amount from the defendant at the earliest possible time.

Cognizance of Offence

Conditions essential

It is Section 142 of the Negotiable Instruments Act, 1881 that deals with cognizance of offences. It states that the following conditions need to be met to hold the drawer liable for the offence of dishonoring a cheque:

  • The person who is to be paid, i.e., the payee or the holder, is required to file a written complaint in due course of time.
  • Pursuant to what has been mentioned in Section 138(c), one needs to file a complaint within a period of 1 month from the date on which the cause of action arises.
  • Section 138 of the N.I. Act, empowers only the Metropolitan Magistrate or a Judicial Magistrate of the First Class  to handle cases of the dishonoring of cheques.

Liability of Drawer of Dishonoured Cheque

Section 143 of the N.I. Act, 1881 gives the court the power to try Section 138 cases summarily. 

Section 143 of the Act states that: 

  1. Overriding what has been mentioned in the Code of Criminal Procedure, 1973 (2 of 1974), all the cases registered under this section will be tried by a First Class Judicial Magistrate or by the Metropolitan Magistrate and the provisions of sections 262 to 265 (both inclusive) of the said Code shall, as far as may be, apply to such trials.
  2. The High Court holds the power to appoint a second class Magistrate to try summarily any offence who could punish with fine and imprisonment both. But, the term of imprisonment should not exceed a period of 6 months.
  3. If in any case, the Magistrate finds that the accused should be punished for a term more than 1 year than in that case he could recall for a witness and hear or rehear the case in the same manner as laid down in the Code of Criminal Procedure, 1973.
  4. The Section also asks for a continued trial, that is, the trial should continue consistently until a decision had been made by the court. This is done in the interest of justice. It is subject to restrictions on the ground that if the court finds that a case needs adjournment for reasons of being recorded in writing.
  5. Every trial being carried under this section should be conducted at a faster rate along with efficiency and shall be able to conclude a trial within 6 months from the date of filing of the suit.
  6. The Magistrate may send a copy of the summons, issued in the name of the accused or a witness, to their place of residence or place where they carry out their business, either through courier services or speed post, as directed by the Court.

Amendments to the Negotiable Instruments Act

The Negotiable Instruments (Amendment) Act, 2015

The following provisions were included after the amendment to the Act in 2015:

  1. The compensation for loss caused should not exceed 20% of the amount mentioned in the cheque.
  2. In case the drawer is exempted from all the charges then the payee will have to return the money which he had received as compensation. The compensation has to be paid along with the RBI’s Prevailing interest rate, to the drawer.
  3. The compensation should be paid within 60 days from the date the court orders to do the same. This period can further be extended to 30 days if the court is satisfied with the reason for seeking such an extension.

The Negotiable Instruments (Amendment) Act, 2018

This Amendment was another attempt to reduce the number of cases of dishonouring of cheques. The Amendment laid down that there should be provision for interim relief and repayment of deposits.

Interim Relief/ Interim Compensation

In the case of dishonour of cheques it was the complainant who had to face the expenses of the lengthy process of court proceedings, therefore it was introduced via 2018 Amendment that the complainant should be given interim compensation. This would make the drawer take the case seriously.

Duration

It has been provided that the compensation be paid within 60 days from the date of passing an order by a competent court. It further allows an extension for 30 days, when the court is satisfied with the reason for doing so. 

Repayment of interim compensation

Within 60 days from the passing of the order by the court which may extend to 30 days when provided the court with a satisfactory reason, the complainant is required to repay the interim compensation, only when the drawer of the cheque has been acquitted of all the charges. The interim compensation has to be repaid along with an interest at the bank rate as published by the RBI. 

Repayment of deposit 

The Appellate Court has the power to ask for the repayment of the deposit at any time when the appeal is pending before the court. In case where the appellant gets acquitted of all the charges, he would be able to receive the deposit from the complainant along with the rate of interest specified by the RBI. The repayment of the deposit has to be made within 60 days from the date of the order by the Appellate Court. This can further be exceeded by 30 days if the court is given satisfactory reasons for doing so. 

Purpose

Purposes which the Negotiable Instruments (Amendment) Act, 2018 was meant to fulfill:

  • To find out why there was an undue delay in the final resolution of the cases of cheque bounce.
  • To ensure that the payee, that is the person in whose name the cheque was issued, gets relief.
  • To make sure that no frivolous and unnecessary litigations are taking place.
  • To ensure that the parties to a litigation do not have to spend a lot of time and money.

Hereafter, Section 143-A was inserted in the N.I. Act, 1881 which states that:

  • The court, in cases of dishonouring of cheques, holds the power to ask the person who is issuing the cheque, i.e. the drawer, to give interim compensation to the drawee.
  • The compensation amount would be 20% of the amount mentioned in the cheque. 
  • The court holds the power to ask the drawer of the cheque to pay the interim compensation either in the summary trial or summons case, where he pleads that he is not guilty or in any other case after the charges have been framed.

Under Section 143 of the N.I. Act it was laid down that:

  • Summary trials can take place in cases of cheque bounce as per the Section 262 to 265 of the Criminal Procedure Code, 1973. 
  • The offence would be punishable with imprisonment with will  not exceed the period of 1 year and fine that would exceed Rs. 5,000.
  • If either at the beginning of the trial or during the period of its continuance if the magistrate realize that the case is not suitable for summary trial as the punishment would increase the term of 1 year, then the offence would be tried as summons case. 
  • It was also made known that a person can either go for a civil suit in case he wants mere repayment (with interest) (Summary Suit) or can file a complaint under criminal law (Section 138). 

Section 148

The Appellate Court under this section has the power to direct payment pending the appeal against conviction, under section 138 of the N.I. Act. The court has the power to order a minimum of 20 % of the fine or compensation awarded by the trial court. And this minimum 20% of the amount shall be paid along with the amount that has already been paid by the person who has filed an appeal under section 143-A. The amount deposited can be recovered anytime while the appeal is pending, on the ground that payment has to be made to the complainant.

Section 138 NI Act Punishment

  • The punishment for committing the offence is to pay a fine with may be twice the amount of money that has been mentioned in the cheque or imprisonment up to 2 years. It was by virtue of the Negotiable Instruments (Amendment) Act, 2002, to the Act that the period of imprisonment was increased to 2 years.
  • In a case where the offender is a company or a firm or any other financial institution, every one of those people would be held liable who was having the power to exercise control over the business conduct. 

Nature of the Offence

  • Under the civil suit, the holder of the cheque can file a case for recovery of the sum of money which the drawer was supposed to pay to him.
  • Under the Negotiable Instruments Act, 1881 the criminal liability of the offender of dishonouring of cheques is laid down in the provisions laid down from Section 138 to 142. Criminal liability arises in cases where the cheque has been dishonoured because of insufficiency of funds or for exceeding the limit which is supposed to be paid, as per what has been mentioned in the agreement with the bank.

Speedy Disposal 

As laid down in the case of M/S Meters and Instruments Private Limited v. Kanchan Mehta [16], an accused under Section 138 of the N.I. Act can be discharged from his liability without taking any consent from the complainant, when the court is satisfied that the complainant has been compensated adequately. 

The guidelines which were laid down by the Supreme Court in the particular case are:

  • Any offence which falls under the ambit of Section 138 of the N.I. Act would be dealt with in accordance with the provisions under Criminal Procedure Code, 1973.
  • Under Section 258 of the Criminal Procedure Code, 1973, the court holds the power to discharge the offender if the court is satisfied that the complainant has received adequate compensation. 
  • The primary nature of the object under Section 138 is to compensate the plaintiff. The offender receives punitive punishment only when there is negligence while enforcing the compensatory damage, like delay in compensating the plaintiff. 
  • Compounding of an offence needs to have the consent of both the parties. But, there is an exception which says that if the court is satisfied with the fact that the plaintiff has received adequate compensation, then the court can exempt the accused from his liabilities.
  • Under Chapter XVII of the Act, the procedure for the trial of cases would be done summarily. 
  • The Magistrate has been given the power under Section 143(2) of the N.I. Act that it can pass an order stating that the particular case could not follow the rule of summary trial, as the term of punishment would go beyond the specified limit of one year. 
  • In case the above mentioned order has been passed in a particular case, it has to be first rectified the court had the jurisdiction to pass such orders within the scope of Section 357(3) of the Criminal Procedure Code, 1973. It has also to be ensured that the said court has awarded compensation and punishment with imprisonment within the scope of Section 64 of the Indian Penal Code, 1860 and recovery under Section 431 of the Criminal Procedure Code, 1973.
  • If any other evidence apart from affidavit and bank’s slip is being submitted to the court, it has to be recorded as preliminary evidence by the Magistrate. 
  • Such affidavits can be produced before the court anytime during the period when the proceedings are going on. 

Landmark judgements under Section 138 of NI Act

  • In Krishna Janardhan Bhat v. Dattatraya G. Hegde [30] laid down the essentials required for filing a case for dishonouring of cheque(s). These ingredients comprise of- existence of some legally enforceable debts, the cheque be paid in due course of validation, and the cheque, when presented before the bank, should have been returned unpaid to the payee, due to insufficiency of funds in the account or for exceeding the limit of the sum of money mentioned in an agreement with the bank. 
  • In K.A. Abbas H.S.A. v. Sabu Joseph & Anr. [31] a case for dishonouring of a cheque, with an amount of 5 lakhs rupees, under Section 138 of the N.I. Act, was filed against Mr. Abbas. The cheque had bounced due to insufficiency of the sum in the bank account. The defendant was asked to pay a compensation of 5 lakhs rupees to the plaintiff by the High Court of Kerala. Upon an appeal, the Supreme Court complied with the order passed by the High Court of Kerala. Monetary compensation to the plaintiff was allowed to ensure that they are being taken care of under the Criminal Justice System, as mentioned in Section 157(3) of the Criminal Procedure Code, 1973.
  • In Dashrath Rupsingh Rathod v. State of Maharashtra [32], the three judge bench of the Supreme Court said that in order to file a complaint under Section 138 of the N.I. Act, on the grounds of dishonoring of cheques, the complainant can file the case in the courts under whose jurisdiction the offence has been committed. 

Supreme Court Latest Judgements on Section 138 NI Act

  • Section 141 

In Himanshu v. B. Shivamurthy & Anr. [29] the appellant was the Director of the company, named Lakshmi Cement and Ceramics Industries Ltd. She claimed that she had signed the cheque in the capacity of the Director of the company and so the company should be held liable and her. The court for this matter referred to the Section 141 of the N.I. Act, which stated that calling the company before the court to present his argument was crucial to the process of prosecution in such cases. The mentioned section basically talks about the concept of vicarious liability in cases of dishonouring of cheques under Section 138 of the N.I. Act. An important point within the scope of Section 141 of the N.I. Act is that it will hold liable every one of those people who at the time of the commission of the offence was holding the power for conducting the business of the company.

  • Mediation

In the case of Dayawati v. Yogesh Kumar Gosain, [17] the court has marked that: the cases falling within the ambit of Section 138 of the N.I. Act, marked as criminal compoundable cases, can be sent to the mediation centre. This case also laid down the procedure to be followed and also demarcated the contents of settlement while transferring the case to mediation.

  • Promoting digital mechanism for dispute resolution

In the case of M/s Meters and Instruments Private Limited & Anr. v. Kanchan Mehta, [18] the court has ordered for speedy disposal of cases. The court has said that in cases where an online platform can be a better measure for dispute resolution, the case should be dealt online without any appearance of the parties. An example could be, traffic challans. The court emphasized on the point that the advancement in technologies must be put to use to avoid overcrowding in courts. 

  • Dishonoured cheque has to be complemented with other factors to  constitute an offence

In the case of Smt. Asha Baldwa v. Ram Gopal, [19] the petitioner defended herself by stating that, it is not sufficient reason to produce a dishonoured cheque and claim compensation, it is also necessary that the rule laid down under Section 141(2) of the Negotiable Instruments Act, 1881 be satisfied which says that the Company or its Partners or the directors can be held liable only when the had the knowledge of such offence, or when they have attributed to it or consented to it, or there has been any negligence on their part, or any person working under them, like the manager, secretary, etc.

Important holdings:

  • Any person who is not directly responsible for the commission of such offence either to the company or the directors, should have consented to the commission of such an offence.
  • It has to be proved that the only role assigned to the petitioner was to hand over the cheques, and that she had not consented to the commission of the offence of dishonouring of that cheque. 
  • The case clarified that the purpose of the rule laid down under Section 138 of the N.I. Act is that the person making the promise should abide by it. As per Section 139 of the N.I. Act, the court shall assume that the cheque delivered is of the same nature, that is to discharging either the entire amount of debt which he is liable to pay or a partial amount, as has been described in Section 138 of the N.I. Act. 
  • No third party would be held liable for the offence committed under Section 138 of the N.I. Act, other than in cases where the offender is a company or a firm, or any other financial corporation.

Therefore, in the present case the court held that Asha was not liable as she had no role to play, as although she was the one who handed over the cheques, she had no knowledge about the offence.

  • No evidence on behalf of the defendant

In the case of Kishan Rao v. Shankargouda, [20], the defendant in the Trial Court could not produce any evidence which could eliminate the doubt that there is no liability or debt on his part. The Trial Court passed the order of conviction against the defendant. When an appeal was made in the High Court, the Court subsided the conviction and review the case and found that the defendant was to be held liable since he has no evidence to defend himself. But the act of keeping aside the Trial Court’s order of conviction was questioned. When a further appeal was made in the Supreme Court, the Court clarified that the High Court cannot overlook the judgement delivered by the Trail court, in order to review a case. The Supreme Court complied with the order of the High Court and the defendant was held liable as he had not produced any evidence in his defence.

  • Fake signature 

The Supreme Court, in the case of Canara bank v. Canara Sales corporation & Ors. [21] had stated that in the case where the cheque presented before the bank carries a fake signature, the bank in no capacity can honour the cheque, and if it does so it would be held liable. 

  • Where Directors are vicariously liable

In Jayalakshmi Nataraj v. Jeena & Co. [22], the court held the Managing Director vicariously liable for dishonouring of cheque under section 138 of the N.I. Act stating that no plea on the ground that Jayalakshmi did not participate in day-to-day administration of the company and that she does not have the knowledge of the company’s doing, would be accepted.

Recent Amendments to the NI Act

There had been earlier Amendments to the act. The recent Amendment made in 2015 has made changes to the provisions related to the jurisdiction of the courts. It says, where the parties to a case were living far away from each other and faced difficulty in penal actions, the holder of the cheque can now file the suit in the area where he resides or at the place where the cheque was tendered. This provision was incorporated in order to reduce the expenses and to make drawers of the cheque more conscious while signing a cheque. It also asked that the cases of the same nature to be filed or transferred to those courts which have jurisdiction in that matter as per the newly implemented Section 142A. [38]

The Amendment made to the Negotiable Instruments Act, 2018, known as the Negotiable Instruments (Amendment) Act, 2018, which came into effect on 1st September, 2018 gives the court the permission to levy not more than 20% of the amount mentioned in the cheque on the offender within a period of 60 days from the date when trial court issues order for paying such compensation.

The Amendment also asks for the payment to be made either during the summary trial or when the summons is delivered, wherever the drawer is held liable for dishonouring a cheque.

Moreover, the Amendment also gave the Appellate Court the power to impose a minimum of 20% of fine or compensation on the accused in addition to the interim compensation which has already been levied on him. 

Miscellaneous

  • Liability of  joint account holder

    • We are all well versed of the phrase, “no one shall be held liable for the acts of another person”. Therefore, under Section 138 of the N.I. Act, 1881, it is only the drawer of the cheque who would be held liable in case there is a joint account holder(s). This provision was laid down in the case of Mrs. Aparna A. Shah v. Sheth Developers Pvt. Ltd. and Anr. [12]. 
    • Jugesh Sehgal v. Shamsher Singh Gogi [13], the court laid the essentials to constitute an offence under section 138 of the Act. One such ingredient says that no criminal liability would arise in case the loss has been caused by the action of some third party. The legal principle of vicarious liability arises only in exceptional cases.
  • Liability when the companies

    • As laid down in the case of N. Rangachary v. Bharat Sanchar Nigam Ltd. [14], In the person who is at fault is a corporate legal entity, that is, either a firm or a company, etc.in that case, the person who would be in charge and responsible for all the business conduct taking place in the company, shall be held guilty of the offence and would receive punishment accordingly.
    • The person being prosecuted under the given circumstances can plead innocence on the ground that- (1) he didn’t have the knowledge of an offence being committed, or (2) that he had exercised due diligence to ensure that the cheque is cleared and that it does not get dishonoured.

Exception

In the case where the company or the firm, or any such financial corporation, is at default and the person responsible for such business conduct of the company has been appointed by the Central Government or the State Government, then he cannot be prosecuted for the offence.

Therefore, the company and the person handling its business can be prosecuted either jointly or independently as laid down in the case of Sheoram Agarwal v. State of Madhya Pradesh [15].

  • Vicarious liability

Section 141 of the N.I. Act, 1881 acts as a general exception to the rule of criminal law which says that some third person can be held liable for the acts of another person. And the person would be vicariously liable for the acts of another person. 

  • Liability of independent directors 

Under the Negotiable Instruments Act, 1881, there is no provision stating that the directors of the company would be held liable for any mistake during business transactions of the company. This is so because it is not the directors who manage the business conduct of the company. A Director can only be held liable if there exist facts which are a contract to the usual nature of the powers exercised by the directors.

  • Redressal for person holding bounced cheque issued by a company

The Director can defend himself by stating that the cheque that had bounced was issued by the company without its knowledge to the board of directors of the company, or that no authorization was sought from the board of directors of the company. It was in N. Rangachary v. Bharat Sanchar Nigam Ltd. [23] that the court said, it is not possible for the holder to know of the company’s day to day affairs or management. Also, it was stated that the directors of the company are the ones in charge of the company’s affairs. Therefore the plaintiff will have the right to hold all the directors of the company liable for the dishonouring of the cheque(s). 

  • Issuance of notice to directors of the company

It was in Krishna Texport and Capital market Ltd. v. Ila.A. Agarwal and Ors. [24] that the court laid down, that there is no need for issuing a notice to the Director(s) of the company. Whether the name of all the Directors or those who are in power to regulate the conduction of business in the company, on whom the court has levied charges, shall be included in the complaint filed before the court.

Liability in case of offence by Partnerships.

It was in Katta Sujatha v. Fertilizers & Chemicals Travancore Ltd. [25] that the Supreme Court laid down that if a partner has been vested with the power to control or monitor or manage the conduct of business of the firm or has consented to the commission of the offence of dishonouring of cheques would be held liable under Section 138 of the N.I. Act.

Filing of case by holder of power of attorney

The conditions under which the person having the power of attorney can file a case of dishonouring of cheques under Section 138 of the N.I. Act was laid down in the case of G. Kamalakar v. M/s Surana Securities Ltd. & Anr. [26]. It says:

  • A case can either be initiated or disposed of by the person having the power of attorney, given that the principal has the knowledge of the same.
  • The person having the power of attorney can testify on behalf of his principal, the physical presence of the principal is not required.
  • The principal should legally empower the person having the power of attorney to file a case under Section 138 of the N.I. Act.

Cheque reported lost

The High Court of Kerala in K. Sadanandan v. Satheesh Kumar [27] has laid down that in case the bank returns a cheque stating the reason that it has been lost, it would not invite liability under Section 138 of the Negotiable Instruments Act, 1881. A liability would only arise when a bank returns the cheque because of non-payment. The reason for non-payment on the part of the bank could be:

  • The sum of money present in the account is insufficient to meet the debt requirement
  • The sum of money mentioned on the cheque has exceeded the limit decided in an agreement with the bank.

Before instituting a case under this case, it has to be rectified by the court that all the essentials required to constitute a crime under Section 138 of the N.I. Act has been met.

Dishonour of Cheque issued as security for repayment of loan

In Sampelly Satyanarayana Rao v. India Renewable Energy Development Agency Limited, [28] the Supreme Court has pronounced that any post-dated cheque which has been marked as a security in a loan agreement, is presented before the bank for repayment of the loan and is dishonoured, then the liability would arise under Section 138 of the N.I. Act, 1881. The term ‘security’ here refers to the cheques signed for the purpose of repayment of the loans. When the instalment of the cheque is delayed or remains due then the repayment of the loan also becomes due. 

Death of party

Death of the complainant 

  • When the original complainant dies, the proceedings would not stop and the case would be his son who would be continuing with the complaint filed taking cognizance of the offence. [39] 
  • In case if the complainant died at the time of producing evidence in court in order to defend himself, it would be his heirs who would be continuing with the prosecution. [40] 

Death of the accused

In case of death of the accused, the legal heirs would not be allowed to continue the prosecution. [41] 

Successive presentation of cheques 

A payee is allowed to present cheques any number of times in the court of law. Every time he presents a cheque and it gets dishonoured he would have the fresh right favouring him. Although, the payee would not have the right to course of action every time he presents the cheque and it gets dishonoured. So, the can choose to produce cheques again and again before the court during the validity period if that cheque without going for any peremptory action under Section 138(b) of the N.I. Act.

Showing intent

Earlier an offender in case of dishonouring of cheques could not be held liable unless the element of mens rea was involved in the commission of the offence, as per the requirement under Section 415 and 420 of the Indian Penal Code, 1860. It was only after the Banking, Public Financial Institutions and Negotiable Instrument Laws (Amendment) Act, 1988, Chapter XVII, dealing with dishonouring of cheques, incorporated under Section 138-142 were established in the Act of 1981. 

In Mayuri Pulse Mills and Ors. v. Union of India and Ors. [33] the High Court of Bombay had said that the element of men rea is not a necessary element to constitute a crime under Section 138 of the Negotiable Instruments Act, 1881. Although the Latin maxim actus non facit reum nisi mens sit rea, (which means, the commission of the crime is complete when bad intention is complemented with wrongful conduct on the part of the offender of the crime), is the essence of constituting an offence under the Indian Penal Code, 1860, the same is not required in case of dishonouring of cheques. The court under the case pronounced that in some cases it is not necessary for the element of mens rea to be present in the commission of the crime. In such situations, the legislature can impose either strict or absolute liability on the offender of the crime. 

The decision made in the given case implies that mere offence pf dishonouring of the cheque would constitute an offence under Section 138 of the N.I. Act, 1881.

In B. Mohan Krishna v. Union of India [34] the court had laid down that the offender of the crime shall not willingly absent from instituting the element of mens rea while committing the crime. If he does so then he would be violating Article 14 of the Constitution of India.

The line “such person shall be deemed to have committed an offence” [35] under Section 138 of the N.I. Act, implies that the given section calls for strict liability in case of the cases of dishonouring of the cheques. If the offence is committed out of any other grounds other than what has been mentioned in Section 138 of the N.I. Act, 1881, then the case would not involve the application of Section 138 of the N.I. Act. 

Conclusion

The cheque bounce cases had seen tremendous rise with as much as 40 lakhs cases pending before the courts as said by the Supreme Court of India. But, after the amendments made in 2015 and 2018 which came with a promise to dispose of the cases at the earliest and also ensure that the victims get relief,  has brought transparency in the system by preventing the people from defaulting on their payments. Therefore, the process under Section 138 has helped in facilitating commercial transactions, as people now feel more secure. This has also helped in keeping up with the modern banking system. 

References

  1. (1883) 9 AC 95, 107: 50 LT 457: 6 Digest 115, 773.
  2. (1922) 1 AC 1, 12: 91 LJKB 1: 125 LT 737: 66 SJ 9: 38 TLR 30
  3. Supra note 1.
  4. 1994 79 Comp Cas 150 (SC)
  5. 1920 Mad 1011: 43 Mad 816; AIR 1967 AP 126
  6. Bhashyam & Adiga, The Negotiable Instruments Act, pg. 118 17th ed. (Bharat Law House, New Delhi, 2003)
  7. (1854) 9 Moore PC 46, 54, 69. 
  8. (2004) 8 SCC 774
  9. Crl. Revision Application No. 435 of 2011 on 2013
  10. Supra note 6 at 724
  11. 2014
  12. 1st July, 2013
  13. 10th July, 2009
  14. 19th April, 2007
  15. 1984 A.I.R. 1824, 1985 SCR (1) 719
  16. Criminal Appeal No. 1731 of 2017
  17. 17th October, 2017
  18. Supra note 16.
  19. 13th September, 2017
  20. 2nd July, 2018
  21. 1987 A.I.R. 1603, 1987 SCR (2) 1138
  22. 1996 86 CompCas 265 Mad
  23. Supra note 14.
  24. 6th May, 2015.
  25. (2002) 7 SCC 655
  26. 2008 CriLJ 1221
  27. Crl. Rev. Pet. No. 2016 of 2003
  28. 19th September, 2016
  29. (Criminal Appeal No. 1465 of 2009)
  30. 11th January, 2008
  31. 11th May, 2010
  32. Supra note 11.
  33. (1994) 96 BOMLR 953, 1996 86 CompCas 121 Bom
  34. 1995 (1) ALT 468, 1995 (1) ALT Cri 332, 1996 86 CompCas 487 AP, 1996 CriLJ 636
  35. Section 138, the Negotiable Instruments Act, 1881
  36. Bhashyam & Adiga, The Negotiable Instruments Act, pg. 117 (Bharat Law House, New Delhi, 2003)
  37. 14th March, 2018
  38. https://www.business-standard.com/article/opinion/the-negotiable-instruments-amendment-bill-2015-115080900761_1.html 
  39. {Source: A.I.R. 2007 (DOC) 271 (A.P.); 2006 (3) CIVIL COURT CASES 294}
  40.  {Source: A.I.R. 2007 (DOC) 222 (RAJ); 2007 (1) RAJ L W 4}
  41. {Source: A.I.R. 2007 (DOC) 222 (RAJ); 2007 (1) RAJ L W 4}
  42. Bhashyam & Adiga, The Negotiable Instruments Act, pg. 117 (Bharat Law House, New Delhi, 2003)

 

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White Collar Crimes in India

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This article is written by Aayushi Swaroop, a student of National University of Study and Research in Law, Ranchi. In this article, she has written about what white collar crimes are, its various types and how it is growing at a faster rate and impacting our society.

Introduction

The practitioners of evil, hoarders, the profiteers, the black marketeers, and speculators are the worst enemy of our society. They have to be dealt with sternly. However well placed important and influential they maybe, if we acquiesce in wrongdoing, people will lose faith in us.”                                                                   -Dr. S. Radhakrishnan 

The most influential criminologist of the 20th century and also a sociologist, Edwin Hardin Sutherland, for the first time in 1939, defined white collar crimes as “crimes committed by people who enjoy the high social status, great repute, and respectability in their occupation”. The five attributes of the given definition are:

  • It is a crime.
  • That is committed by an important person of the company.
  • Who enjoys a high social status in the company.
  • And has committed it in the course of his profession or occupation.
  • There may be a violation of trust.

Related to the corporate sector, white collar crimes are defined as non-violent crimes, generally committed by businessmen and government professionals. In simple words, crimes committed by people who acquire important positions in a company are called white collar crimes. 

White collar crime in India

Corruption, fraud, and bribery are some of the most common white collar crimes in India as well as all over the world. The Business Standard on 22.11.2016 published a report titled ‘The changing dynamics of white collar crime in India’ stating that in the last 10 years, the Central Bureau of Investigation (CBI) has found a total of 6,533 cases of corruption out of which 517 cases were registered in the past two years.

Statistics showed that 4,000 crores worth of trading was carried out using fake or duplicate PAN cards. Maharashtra showed a rapid increase in the number of online cases with 999 cases being registered. The report also mentioned that around 3.2 million people suffered a loss because of the stealing of their card details from the YES Bank ATMs which were administered by Hitachi Payment Services. 

Advancement in commerce and technology has invited unprecedented growth in one of the types of white collar crimes, known as cybercrime. Cybercrimes are increasing because there is only a little risk of being caught or apprehended. India’s rank on Transparency International’s corruption perception index (CPI) has improved over the years.

In 2014, India was ranked 85th which subsequently improved to 76th position in 2015 because of several measures to tackle white collar crimes. In 2018, as per the report of The Economic Times, India was placed at 78th position, showing an improvement of three points from 2017, out of the list of 180 countries.

India is a developing country and white collar crimes are becoming a major cause for its under development along with poverty, health, etc. The trend of white collar crimes in India poses a threat to the economic development of the country. These crimes require immediate intervention by the government by not only making strict laws but also ensuring its proper implementation.

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Reasons for the growth of white collar crimes in India

Greed, competition and lack of proper laws to prevent such crimes are the major reasons behind the growth of white collar crimes in India. 

Greed

The father of modern political philosophy, Machiavelli, strongly believed that men by nature are greedy. He said that a man can sooner and easily forget the death of his father than the loss of his inheritance. The same is true in the case of commission of white collar crimes. Why will a man of high social status and importance, who is financially secure, commit such crimes if not out of greed?

Easy, swift and prolong effect

The rapid growing technology, business, and political pressure has introduced the criminals to newer ways of committing white collar crimes. Technology has also made it easier and swifter to inflict harm or cause loss to the other person. Also, the cost of such crimes is much more than other crimes like murder, robbery or burglary, and so the victim would take time to recover from it. This would cut down the competition. 

Competition

Herbert Spencer after reading ‘On the Origin of Species’ by Darwin, coined a phrase that evolution means ‘survival of the fittest’. This implies that there will always be a competition between the species, and the best person to adapt himself to the circumstances and conditions should survive. 

Lack of stringent laws

Since most of these crimes are facilitated by the internet and digital methods of transfer payments, laws seem reluctant to pursue these cases as investigating and tracking becomes a difficult and complicated job. Why it becomes difficult to track it is because they are usually committed in the privacy of a home or office thereby providing no eyewitness for it.

Lack of awareness

The nature of white collar crimes is different from the conventional nature of crimes. Most people are not aware of it and fail to understand that they are the worst victims of crime.

Necessity

People also commit white collar crimes to meet their own needs and the needs of their family. But the most important thing that the people of high social status want to feed their ego.

The reasons behind white collar criminals going unpunished are:

  • Legislators and the people implementing the laws belong to the same class to which these occupational criminals belong.
  • The police put in less effort in the investigation as they find the process exhausting and hard, and often these baffling searches fail to promise favourable results. 
  • Laws are such that it only favours  occupational criminals.
  • The judiciary has always been criticised for its delayed judgement. Sometimes it so happens that by the time court delivers the judgement, the accused has already expired. This makes criminals loose in committing crimes. While white collar crimes are increasing at a faster rate, the judiciary must increase its pace of delivering judgements.

Chronological Background

Popularly known as the Carrier’s case, it was the first case of white collar crimes which was documented in the year 1473 in England. In this particular case, the agent was entrusted with the responsibility of the principal to transport wool from one place to another. The agent was found guilty of stealing some of this wool. The English Court after this case adopted the doctrine of ‘breaking the bulk’ which means that the bailee who was given the possession of goods tried to break it open and misappropriate the contents. 

However, the growth of industrial capitalism has taken criminality to the next level. The bourgeois institution dwells into committing such crimes out of greed and misery to have and to be able to attain more. In 1890 in America, the Sherman Antitrust Act was passed, which made monopolistic practices illegal. The penalties imposed on offenders of white collar crimes in Great Britain and the adoption of competition or antitrust laws by other countries were not as sweeping as the Sherman Act.

In the late 18th and early 19th century, a group of journalist rose the sentiments in the mass seeking reforms. By 1914, Congress was seen making great efforts in strengthening the sentiments laid down by the Sherman Act. This Act proved out to be more stringent in comparison to the Sherman Act in dealing with the monopolistic illegal practices. 

Historical background

Edwin Sutherland’s Definition. It was in 1939 when for the first time Edwin Sutherland, an American sociologist, defined white collar crimes. He described it to be crimes committed by a person of high social status and respectability who commits such crimes during the course of their occupation. 

Criticism

Coleman and Moynihan pointed out that Edwin Sutherland’s definition had certain ambiguous terms, like:

  • It has not laid down any criteria for who these ‘persons of responsibility and status’ would be.
  • Also ‘person of high social status’ is not clear. It is perplexing as the meaning of the phrase in law could be different from its general definition.
  • Sutherland’s definition did not take the socio-economic condition of the person into consideration. It only showed the dependency of white collar crimes on its type and the circumstances in which it was committed.
  • Mens rea, i.e. guilty mind and actus reus, i.e., wrongful conduct are two essential elements to constitute a crime. However, Sutherland’s definition implies that according to him white collar crimes does not necessarily require mens rea. 

Morris’s Comments. In 1934, Albert Morris advanced that, the illegal activities that people of high social status involved in during the course of their occupation, must be brought with the category of crime under which their illegal activity falls. He also asserted that it should be made punishable.

E.H. Sutherland’s demarcation. Sutherland again came into the picture and clarified that the crimes which would be committed by people belonging to high socio-economic groups, during the course of their occupation, would be termed as ‘white collar crimes’. And further said that the traditional crimes would be denoted as ‘blue collar crime’.

So he drew a distinction between white collar crimes, i.e. corruption, bribery, fraud, and blue-collar crimes, i.e., traditional crimes like robbery, theft, etc. After this, criminology in the year 1941 finally recognized the concept of ‘white collar crimes’.

Difference between white collar crime and blue-collar crime

The term ‘blue collar crime’ came into existence some time in the 1920s. The term was then used to refer to Americans who performed manual labor. They often preferred clothes of darker shade so as to stains less visible. Some used to wear clothes with a blue collar. These worked for a low wage on an hourly basis. White collar crimes have been prevalent since centuries and it is not new to all types of businesses, professions and industries. 

The difference between ‘blue collar crimes’, which are crime of a general nature, and ‘white collar crimes’ was laid down by the Supreme Court of India in the case of State of Gujarat v. Mohanlal Jitamalji Porwal and Anr[2]. Justice Thakker elucidated that one person can murder another person in the heat of the moment, but causing financial loss or say committing economic offences requires planning. It involves calculations and strategy making in order to derive personal profits.

Here are the characteristics of white collar crimes which distinguish it from other crimes of general nature:

Meaning

Blue-collar crimes refer to people who work physically, using their hands, whereas white collar crimes refer to knowledgeable works, who use their knowledge to commit crimes.

New v/s Traditional 

Where blue-collar crimes refer to traditional crimes that have been committed since ages, the concept of white collar crimes has recently developed. It’s a new species of crime. 

Mens rea

To constitute a crime element of mens rea and actus reus is must. Where mens rea is an essential element of blue collar crimes, its involvement in white collar crimes is not necessary. 

Independent of social and personal conditions

White collar crimes have no relation with the social conditions, like poverty, or personal conditions of the offender albeit it matters in the conventional nature of crimes.

Direct access to the targets

Since the offenders who commit white collar crimes are people at a higher position in a company they have easy, direct and valid access to their targets. The case is different with blue-collar crimes. For example, if Jhethalal decides to commit theft in the house of Babitaji, he will first have to break the door or make a passage of entrance to get inside Babitaji’s house and thereafter commit theft.

So, before actually committing theft, Jhethalal will first have to get access to Babitaji’s house. Whereas in white collar crimes, one can have direct access to their target making use of one’s higher position and power.

Veiled offenders

In the case of white collar crimes, one does not have to come face to face with the victim and so their identity remains veiled. Whereas in case of blue collar crimes, one has to come face to face in order to inflict injury upon others. 

Involvement of politicians

In many cases it has been found that the offenders have strong connections with politicians and sometimes, politicians are also involved in committing the crime thus making it difficult for the victims to take action against such offenders.

Greater harm

The harm caused by white collar crimes are much more difficult to bear than those inflicted by blue collar crimes. Also, the harm caused by white collar crimes could cause great harm, not only to the public, but to the other institutions and organizations as well.

Effects of white collar crime

  • Effect on the company

White collar crimes causes huge loss to companies. In order to recover the loss, these companies eventually raise the cost of their product which decreases the number of customers for that product. This works according to the law  of demand states that, other things being equal, when the price of a commodity rises, it’s demand would fall and when the price lowers, its demand would increase.

In short, the price of the commodity is inversely proportional to its demand. Since the company is in loss, the salaries of the employees are lessened. Sometimes the company cut down the jobs of several employees. The investors of that company and its employees finds it difficult to repay their loans. Also, it becomes hard for people to obtain their credits.

For example, a US-based IT cognizant landed up paying 178 crore rupees to settle the charges levied on it under the Foreign Corrupt Practices Act by the Securities and Exchange Commission. The company had bribed an Indian Government Official from Tamil Nadu to allow the building of a 2.7 million square feet campus in Chennai. Apart from loss in paying 2 million dollar bribery amount, the company also had to bear extra charges of 25 million dollars to get free from the charges. 

  • Effect on the employees

White collar crimes endanger employees. They become conscious of their working conditions, whether it is safe anymore or not. They start doubting if they are safe and that they can still be given in their trust to the company.

  • Effect on customers

The most important concern of the customers is whether the products which they are using is safe or not. This doubt rise to see the rate at which white collar crimes have been increasing.

  • Effect on society

White collar crimes are harmful to the society for those people who should be cited as a moral example and who must behave responsibly are one committing such crimes. The society thus becomes polluted.

When the former director of Andhra Bank and the directors of a Gujarat based pharma company, Sterling Biotech, were arrested for their involvement in 5000 crore fraud case. They used to withdraw money from bank accounts of several benami companies. This was one big scam which put the people in fear.

Also in 2018 the Punjab National Bank (PNB) found that fraudulent transactions of value 11, 346 crore rupees have been taking place in its Mumbai branch. “The Staff there used to fake LoU ( Letter of Understanding) for the buyer’s credit to the company of Nirav modi and Gitanjali Group”, as published in the Business World. 

  • Loss of confidence

Stock fraud or trading scandals, like that happened in the U.S. in the 1980s, makes people lose faith in the stock market. Barry Minkow, a teenager and the owner of the business of carpet cleaning built a million dollar corporation in the 1980s. But, he was able to achieve this only through forgery and theft.

He managed to create more than 10,000 counterfeiting documents and sales receipts without coming to someone’s notice. His company although created through fraud was able to make market capitalization of 200 million dollars and leased 4 million dollars of land. Later, he was sentenced to 25 years of imprisonment. 

Eron was the seventh largest energy trading company, based on revenue, in U.S. Forgery made them waive off hundreds of millions of debts out of their book. The investors thought that the performance of the company was really good and stable. But later on it as found that the incredible numbers on revenue records were fictitious. The famous Eron scandal where all the retirement accounts were wiped out it was found that people had loss their normality, their power and public confidence. 

  • Effect on offenders

The authorities have shown no consensus on the definition of white collar crimes. There are no accurate statistics available to analyse the causes and effects of such crimes and therefore government fails to take exact measures to prevent them. Also, though these crimes are on the rise, they are generally not reported.

These crimes have no eyewitnesses as they are committed in camera, which means that the offenders commit these crimes while sitting in  a closed room or in their personal space using their computers, and nobody could know about what they are doing on their computer.

This makes it difficult to track the offenders. All these loopholes becomes an incentive for the offenders to fearlessly commit such crimes because the punishment is also for  a short term unlike in blue-collar crimes. Offenders are mostly seen roaming freely which poses a danger to the society.

  • Effects on the temperament of the affected person

The target of the offenders are generally elderly people with little access to liquid assets and their cognitive ability is less than that of younger people. So they become an easy target for the offenders. The victims of such crimes often undergo depression and are seen to have suicidal tendencies, because sometimes the loss incurred is unbearable. 

The renowned startup founder, Vijay Shekhar Sharma, the person who founded the widely used app for transaction namely Paytm, became a victim of blackmailing by his personal secretary Sonia Dhawan. She along with others stole his personal data along with sensitive business plans, to extort money from him. Also, Sharma received regular calls stating that his personal information would be revealed to the public if he doesn’t give the required amount to them. Sharma was put under a lot of pressure.

 Project report on white collar crime in India 

Various committees were formed to look into white collar crimes and set up rules and regulations to prevent them and ultimately eliminate them.

  • The Report on the Commission on the Prevention of Corruption, 1964

On the recommendations by the Committee on Prevention of Corruption, headed by Shri K. Santhanam, the Central Vigilance Commission was created in 1964. The Central Vigilance Commission is now the apex institution for vigilance, independent of any executive authority. Its function is to address corruption in government offices and to monitor all vigilance under the Central Government. This organization seeks its advice in planning, executing and reviewing their vigilance work. 

The role that the Central Vigilance Commission plays is:

  1. To supervise the work of Delhi Special Police Establishment in only those matters which relate to the offences which have been committed under the Prevention of Corruption Act, 1988.
  2. To direct the Delhi Special Police Establishment in discharging their responsibility given to them under sub-section (1) of section 4 of the Delhi Special Police Establishment Act, 1964 .
  • The Report on the Commission of Inquiry on the Administration of Dalmia Jain Companies, 1963

In the 1930s Dalmia Group run by brothers, Ramkrishna Dalmia and Jaidayal Dalmia, merged with Sahu Jain Family to form Dalmia-Jain Group. This business was ultimately split between the two families and again between the two brothers in 1948. On the allegations of corruption against the group, Vivian Bose Commission of Inquiry into the affairs of Damila-Jain group of companies was set up in 1963.

The committee said that because of the group’s collection of black money, undisclosed assets and undetermined income tax liabilities, the dissolution or split had become so complicated that it could not be officially said that the groups had split. The Commission headed by Justice S.R. Tendulkar and after his death by Justice Vivian Bose, sentenced Ramkrishna Damia on charges of tax evasion, perjury and criminal misappropriation of funds in 1962.

  • The Report on L.I.C. Mundra affairs

It was in the 1950s when, Haridas Mundhra, a stock speculator was arrested and imprisoned in the case of the first big financial scandal of newly independent India. At that time, Jawaharlal Nehru was the Prime Minister of India. His daughter Indira Nehru was married to Feroze Gandhi, who was also a Member of Parliament. Feroze Gandhi was the driving force behind the anti-corruption movement which led to the imprisonment of Ramkrishna Dalmia.

When Feroze Gandhi finally came to power he questioned whether the newly established Life Insurance Corporation had used premiums from the policyholders. Ultimately a committee was set up which was headed by the retired judge of the Bombay High Court, Justice M.C. Chagla which came to the conclusion that Mundhra be sent to jail on the ground of, as many as 124 prosecutions against him and 113 of them resulting in convictions.

  • Das Commission Report, 1964

In the case of R.P. Kapoor v/s Pratap Singh Kairon [3], Pratap Singh Kairon, who was the Chief Minister of Punjab was accused of using wealth to boast his high status of and also of his family at public expense. The Commission exempted him on the ground that a father could not be held liable for actions of his grown-up children. The Commission clarified that a son cannot be stopped from carrying out a business of his choice except that the son cannot use his father’s political position and power to exploit others. The petition was therefore dismissed by the court.

  • Administrative Reforms Commission on Reports

Administrative Reforms Commission’s 4th report titled ‘Ethics in Governance’ had made amendments and included new provisions in order to reduce the number of white collar crimes in India. 

  1. The report introduced a new provision stating that partial funding by the state is allowed in elections so as to avoid illegitimate and unnecessary expenditures by the political parties.
  2. It suggested an amendment to section 8 of the Representation of the People Act, 1951, keeping people facing charges in case of a grave or heinous crimes and corruption out of participating in elections. 
  3. The report on the election of the Chief Election Commissioner and other Election Commissioners decided to form a collegium in order to select them. The collegium would consist of the Prime Minister of India, the Speaker of Lok Sabha, the Law Minister and the Deputy Chairman of the Rajya Sabha as its members. This would prevent in wrongful exercise of power and prevent manipulation by the authorities enjoying dominance.
  4. It was proposed that an office of ‘Ethics Commissioner’ be formed by each House of the Parliament. This office would be regulated by the Speaker or the Chairman to follow the code of ethics, to advise the body whenever required and maintain records of the office. 
  5. Most importantly the Commission asked the Government to recognize ‘collusive bribery’ as a special offence. The Commission advanced that section 7 of the Prevention of Corruption Act needs an amendment for the inclusion of ‘collusive bribery’ as an offence. This would prevent the public servants from performing such acts which leads to loss to the public. 
  6. The Commission also recommended to take immediate measures for the implementation of Benami Transactions (Prohibition) Act, 1988.
  7. The Commission gave protection to whistleblowers on the grounds of confidentiality. And also made harassment and retaliation against them a punishable offence.
  8. The Commission said that the media should have their Code of Conduct and self regulating mechanism to avert from wrongful actions and government be allowed to disclose the cases of corruption to media in order to help them fight against corruption in the country. 
  9. The Commission made an important decision stating that the head of the office should be given the responsibility to take proactive vigilance on corruption. 

There are other provisions that were presented by the Commission before the Government thereby assisting the Government in their fight against corruption and other malpractices by the people at higher positions in the authority. 

  • Law Commission 47th Report

In its 47th report, the Law Commission said that since a corporation does not have a physical body, no pain can be inflicted upon them as a punishment. A corporation does not have a mind that can be accused of guilty intent and therefore new penalties should be created to punish them for their illegal and wrongful acts.

The Commission found that the real penalty for the corporation would be to experience a curtailment in their reputation. And that they be called a disgrace. The commission said that not only the directors or managers should be punished but the corporation as well. The people should be able to link the offence with the name of the corporation also. 

The Commission recommended the inclusion of the following provisions in the Indian Penal Code, 1860:

  1. In every one of those cases where the offence has been committed by the corporation and the punishment includes imprisonment or fine and imprisonment both, the court will have the power to impose on these offender fine only.
  2. In every one of those cases where the offender is the corporation and the punishment for his offence can be either imprisonment and any other punishment other than fine, than in that case the court shall have the power to impose on such offenders fine only. 
  3. In this section, ‘corporation’ should mean an incorporated company or other body corporate. It would also include firms and other association of individuals.

Like the above mentioned provisions, the Commission in its report has mentioned the punishment the offender corporation or company would be subjected to.

  • The Report by Santhanam Committee

The Santhanam Committee was the first body to recognize the intensity of the crimes committed by the people of high social standards, which was acknowledged by the 29th report of the Law Commission released in 1972. Santhanam Committee in its report on the Prevention of Corruption has talked about the reasons behind the prevalence of white collar crimes in India.

The technological advancement and development in scientific temperament has been assigned as the major reason behind the growth of white collar crimes. These large numbers with advanced disposition is being regulated by only a handful of elite who form the monopoly. The need of this technologically and scientifically advanced era is to make these masses adhere to the rules laid down by the elites to conduct them. Those who fail to do so land up becoming the offender of white collar crimes. 

The committee showed its concern regarding the great damage that these crime can cause to the public morals. The case of white collar crimes are so complex and since people are not much aware about it, it is only the experts who can recognize such crimes and protect themselves from becoming a victim of it.  

Types of  white collar crime in India

The ambit of white collar crimes is varied. Some of the white collar crimes that have been reported in India are:

  • Blackmail

Section 503 of the Indian Penal Code, 1860 defines blackmailing or criminal intimidation as, making a demand for money or any other consideration by imposition of threat to cause physical injury, or to cause damage to ones property, or to accuse one of a crime, or to expose somebody’ secret. The threat can be induced in the following ways:

  1. By revealing a secret of the person which the offenders knows if revealed will cause great embarrassment to the victim. For example, if A, the Managing Director of the company XYZ, knows that B, a female employee of the same company, was bearing the child of somebody other than her husband. A asked B to commit forgery on the account papers so that he could embezzle 20 lakhs rupees from the company without anybody knowing about it, or else he would reveal her secret which would cause great embarrassment not only to her but her family as well. 
  2. By revealing those matters of the victim which are sensitive enough to cause financial loss to him. For example, if X knows that the property Y owns has been fraudulently been taken over from Y’s parents by deceitfully taking their signatures on the will. The X, a senior manager of  a law firm, asks Y, a junior employee of the same company, to take out the file containing the personal details of the chief secretary of the company from the storehouse of the company. When Y refuses to do so, X threatens to reveal her secret of forgery to the police. X is said to be blackmailing B. 
  3. By doing acts which could falsely accuse the other person of a crime, thereby affecting his life in many ways. For example, when X, an officer at senior most post asks her secretary to marry his son else he would falsely accuse her of embezzlement of 10 lakhs rupees from the company, which actually has been done by X. This is blackmailing as a white collar crime.
  4. By revealing a report which shows that person’s involvement in a crime. For example, M, the lawyer of N, and an old enemy of his, which N has no idea about, in a murder case, asks him to pay him double the amount else he would give the court the recordings in which M has confessed that he had murdered the person and the manner in which he has committed the same. This is blackmailing. 

When does blackmailing become a white collar crime

For blackmailing to be considered under the ambit of white collar crime, it should be committed by or show an involvement by someone enjoying higher social status in an occupation.

  • Credit card frauds

These frauds are committed when one person uses the credit card of another person unauthorizedly to obtain goods of value, he is said to have committed credit card fraud against the other person. For example, in 2003 in Mumbai, Amit Tiwari, a 21 years old engineering student was arrested for using too many names, for having too many bank accounts and too many clients, all false managed to defraud a Mumbai-based credit card company, CC Avenue, of around 9 lakhs rupees.

This case brought to the notice of the authorities that credit card frauds have not been recognized by the Information Technology Act, 2000. The loophole in the law has caused a great loss to the company. 

As per the report released by the Economic Times, it was found that over 900 cases of credit/debit cards and internet banking have been registered during the period of April-September, 2018. All these cases involved an amount of 1 lakh rupees and above. Minister of State for Electronics and IT (2018), S.S. Ahluwalia, informed that the Reserve Bank of India by 30th September, 2018 had registered a total of 921 cases of credit/debit card fraud. 

In 2017 a Metropolitan Magistrate became a victim of credit/debit card where the victim received two messages for two transactions done from his debit card, not in India, but abroad. The victim claimed that those transactions did not have his consent. A complaint of cheating under Section 420 of the Indian Penal Code, 21860 was filed. 

  • Currency Schemes 

These schemes basically refers to the practice of determining the value of the currency in the near future. The determining of the value is not based on any firm evidence though.

According to a report, ‘Trend and Progress of Banking in India’ released by the Reserve Bank of India, published by the Financial Express in January, 2019, it was alleged that the banks have lost 41,168 crore rupees in the financial year of 2018 which shows a 72% rise from what was in 2017. The reason behind this rise is the fraud against currency schemes. The report cited that fraud have turned out to be a major concern with a 90% rise of such cases in the credit portfolio of banks with the major chunk of fraud being concentrated in off-balance sheet operations, foreign exchange transactions, deposit accounts and cyber-security. 

Common types of currency schemes in India

  • Schemes involving advance payment of fees 

In these cases the victims are asked to make an advance payment of the sum. They would be promised to be receiving just the double of what they have invested. But one the money has been given, no track of the offenders can be found. In these cases, the scammers target those people who have already lost much amount somewhere. An appeal is made to their sentiment that the amount they are investing would be doubled and they would be able to recover the loss caused from the last transaction done by them.

The commission of this type of fraud had originated from nigeria. The first case of ‘Nigeria 419’ in India was registered in August in 2003 where Piyush Kankaria, a Howrah-Kolkata based businessman filed a multi-million fraud case under Section 420 of the Indian Penal Code, 1860. Piyush, out of financial crises, had become a victim to this fraud where he had to claim 7.5 million dollars from an account in return for 3 million dollar and for which Piyush had already advanced a mobile handset as a gift.

  • Scams in the boiler room 

Boiler room refers to the office which are frequently changed, that is, the office which is not stable and shifts regularly. In these cases, the scammer creates a website giving all fake or false information. The address given on the website would be a temporary one, the toll-free number would be invalid, though all will appear legitimate on the screen. By the time one realizes that they have been defrauded, the scammer moves on to another similar scam at some other place. 

It was recently in 2019 itself when a person by the name of Rohit Soni, from Rajasthan, who was a B.com. Graduate created a fake Amazon website similar to the original website. How Rohit made a profit out of it was by providing the customers with a link which gave access to an app named ‘4Fun’, and for every download he received a sum of 6 rupees.

Exempt securities scam

Exempt securities scam refers to the selling of securities by a company without filing a prospectus. This offence is committed against wealthy people who are persuaded to invest in a business. The offenders pitch a fraudulent investment as ‘exempt ‘ securities. A fake promise is made to the victim that the business would go public. These scams involves a great risk and make you lose all your investments. 

It was in 1992 when an Indian stockbroker, Harshad Mehta, was held guilty with as much as 27 charges released against him for having committed various financial crimes under the securities scam of 1992. Harshad had been accumulating huge wealth through massive stock manipulation facilitated by the use of fake or worthless bank receipts.

The Bombay High Court, as well as the Supreme Court of India, held him guilty for being a part of a huge financial scandal involving 4999 crore rupees. This scandal had taken place against the biggest stock market that is the Bombay Stock Exchange (BSE). After having lived in jail for 9 years Harshad Mehta dies in 2001.

Scams in the foreign exchange market

In the foreign exchange market, investors buy and sell currencies depending upon its exchange rate. These markets are often dominated by large and developed banks that have plentiful resources at hand. The staff in such organizations are well skilled and trained in using the advanced technology and therefore it becomes difficult to beat these professionals.

In the foreign exchange market, it is not new to see people becoming prey to the illegal or fraudulent schemes known as forex schemes. Since these schemes are often carried online  from another country, the chance of losing your money is high as one is likely to buy services from those firms which are not legitimately set up can market their services ultra vires. It is easy to fake things online. The result of these scams could be that the money one invests might get stolen and one might lose everything that he had invested.

As per the report published by the Times of india in 2017, the Central Bureau of Investigation has held a total of 13 private companies responsible for sending unknown foreign remittances which hold the value of 2,253 crore rupees under bogus imports of goods during 2015-2016. 

Similarly in 2015, as published by the Times of India, the Bank of Baroda was alleged to have been involved in forex scam worth rupees 6,172 crore. This money was sent from India to Hong Kong for importing cashew nuts, pulses and rice. However, at a later stage it was found that nothing was imported and instead all this money went into 59 different bank accounts of several companies. 

Similarly, in 2015-16, the Directors of a Mumbai-based company called M/s Stelkon Infratel Pvt. Ltd., Manish Prakash Shyamdasani and Mungaram Hakmaram Dewasi, were held liable for their indulgence in large scale illegal foreign remittances under fraudulent imports of goods 2015-16. 

 Offshore investing scams

These scams induces a person to send their money ‘offshore’ to some other  country to get more money in return than invested. These scams mostly aim at exempting a person from paying taxes. But the ultimate result of it is that people land up paying money in back taxes, and penalties. 

The major risk involved in these scams is that the victim in cases of foreign investment are not able to seek remedy from the civil court and thus one is not able to recover the invested money.

It was in 2008 when Ketan Parekh, a stockbroker from Mumbai, and the Director of the Madhavpura Mercantile Co-operative Bank,  was convicted for his involvement in the scam that happened between 1998 to 2001 in the Indian Stock Market. Parekh was held responsible for rigging price artificallicy of securities.

He had been able to do this by borrowing money from various banks including his own bank which he was the Director. What parekh used to do was, at first place, he purchased large stakes from small market capitalization companies. He continued to do so unless a large sum of money has been accumulated and then jacked up the prices via circular trading with other traders, collusion with other companies as well as with the large institutional investors. This led to a huge rise in the prices of the shares. For example, the price of the shares of Zee telefilms rose from 127 rupees to 10,000 rupees. These stocks were referred to as the ‘K-10’ stocks and Parekh was given the name of ‘Pentafour’.

For the purpose of looking into such a scam, Joint Parliamentary Committee was set up which found Parekh guilty of circular trading of money and rigging the prices of 10 companies from 1995 to 2001, on a false pretext. 

Scam against the pension of a retired person

Older people have their retirement accounts where they keep their savings for the period after retirement from their services. Usually, money from these accounts can be withdrawn only after the attainment of a certain age, and only a certain sum of money can be withdrawn in a year, and also some tax is imposed on the money withdrawn. 

Some company can fake such accounts. It can ask the person to invest in their bank where they would be able to keep their savings safely. The bakers asks the person to buy the shares of the company from their savings which would be repaid by granting 60-70% loan from the invested money and the rest would be kept by the bank as a fee. These promises turns out to be fake and the investment made, worthless. There is a high possibility to lose one’s retirement savings in totality to such scams. 

It was in 2009 when India Today published a report on pension scams in India. The report said that in Uttar pradesh, a huge amount of money which was supposed to be used for giving pension to the 60-years-old people, who were Below the Poverty line (BPL) and used to earn 300 rupees per month were being given to younger people.

The scheme was basically meant for the older people from the lower strata of the society. The divesting of the money to young people was assisted by the Uttar pradesh Government by issuing fake BPL cards and certificates showing false age. This helped each beneficiary of the scheme to earn 3,600 rupees annually, half of which was given as a commission to the official who has helped the very person in forging the documents. 

Double dip scam

The person who has already been a victim of a scam is likely to become a victim again. And when it happens, it is called a double dip scam. The offender in the first instance can store the information of the victims and pass on to other such offenders, thereby assisting them in making money fraudulently.   

The case might also be that the first offender calls you again and you spill out your grudge from the first fraud that you have become  a victim of. The scammer then offers you to recover your money in return for a small fee. One would again lose one’s money in this way. 

Unveiling the double dip scam taking place within political parties, the India Today has published a report back in 2016 when  politicians were found to have converted back money into white money for 40% commission. The political parties were found double-dipping as brokers for undeclared wealth. There politicians used to do the business of converting black money into white in near to their offices in Ghaziabad, Noida and Delhi. 

Such types of situation where politicians indulge in wrong practices have been very common for the politicians enjoy powerful position which comes with various powers, they tend to manipulate things and make illegal profits, which are basically the money supposed to be used for public welfare. And ultimately it is the common people who suffers the most. 

Scam by building a relationship

In such cases the offender targets a group of people, or organizations or communities. The offender in cases are somebody close that the victim. He builds a relationship of trust with the victim, or become a member of the same religious community against whom he has committed fraud, and then misusing the faith people have planted in him, he gains profit by cheating those people. These scams are also called affinity scams.

Ponzi scam

Ponzi scam, also known as pyramid scam is a type of affinity scam where the scammer would through emails and advertisements offer one to earn huge profits by sitting at the comfort of their living room, only by investing a certain amount of money. They also keep exciting offers like early birds would be able to make more profits. After investing their money in such schemes people land up having nothing in their hand, as the scammer runs away with the money leaving behind no clue of their existence so as to track them.

The cases of ponzi scheme in India are:
  1. In November, 2018, Gaylen Rust of Utah was accused by the Government for running ponzi scheme and generating huge wealth, like that if 25-40% per year,which is about 47 to 200 million of money. It was found that more than 200 people had become a victim of this scheme.
  2.  In the same year when Gaylen ruth was found guilty, in the month of September, a person by the name of Claud R. ‘Rick’ Koerber, from Utah itself, was found guilty of running a ponzi scheme. Under this the investors in the property had suffered a loss of 100 million.
  3. In 2017, Michael Scronic from New York, was held levied with civil and criminal charges, causing a loss of 27,000 million dollars to the investors.

Pump and dump scam

A company who owns a large amount in a low-priced stock, which is actually an illegitimate business, will find potential investors and persuade them to invest in their stock. As more people would invest, the price of the stock would increase and when it reaches its peak the scammers would sell all the shares, earn profit and run away, taking with him all your money.

It was in 2015 when Rakesh Jhunjhunwala was said to have raised his wealth by purchasing 2,50,000 odd shares because of which though his shares of the ‘Surana Solar’ experienced an 18% rise, but after the dump-sum scam was discovered, the prices quashed. That is how a loophole in the system was also discovered.

The happening of such scams reveals that there is no proper system to check the authenticity of the information being supplied. And taking the advantage of such a  loophole, the Surana Solar made namesake deals easily with the investors causing them great loss. 

Scams by way of sending spam emails

Often the scammer sends spam mails making fake offers and promises. In the year 2017, a record of 7.5 million cases of spam mails was discovered. Once you reply to such emails you get caught in the trap as these mails are fraudulent. Most of these mails are regarding microcap stock where investments are highly risky when compared to other stocks.

The customers of the ICICI Bank became a victim of such scam where certain group of people representing themselves to be an official of the bank, asked for sensitive information about tye bank account and defrauded them. The fraud was finally discovered by the manager of the bank when a few of the customers who had received such spam mails filed a complaint. Such a scam in the IT Act is defined as ‘phishing’. 

 The act of embezzlement 

When a person who has been entrusted with money or property to use it for his own use and benefits starts using it any manner other than what it has been given for in an illegal manner then the person would be liable for embezzlement. The act of embezzlement may be characterised as criminal breach of trust which has been defined in section 405 of the Indian Penal Code, 1860.

It defines criminal breach of trust as an act where a person who has been entrusted with a property misappropriated it or falsely converted it to his own use or dispose of it without any law allowing him to do so. Embezzlement is a misappropriation of someone’s property where a person has an intent to cause loss to the other person and criminal misappropriation is an offence under Section 403 of the Indian Penal Code, 1860.

The essential elements that constitute the crime of embezzlement are as follows.

  1. The two parties must share a fiduciary relationship, that is, a relationship based on trust.
  2. It is important that the defendant receives a certain amount of money or asset by making wrongful use of this relationship.
  3. The defendant while embezzling the asset or money should act like he is the owner of that goods or he owns the money  which he is giving to another person
  4. There should be an intention to deceive on the part of the offender. 

Some examples of embezzlement and the respective sector in which they are committed as a white collar crime are:

  1. In Banking sector the bank tellers, who are people directly dealing with the customers gives them access to the funds of the bank for work.
  2. The clerks or the cashiers in stores gives the customers or any person access to the till money kept in the store. Till money refers to the money which the bank keeps with it to meet everyday requirements for cash money.
  3. It is often found that the company provides a car to its senior employees for official work. But these cars are seen to be used for purposes other than official duties which amount to embezzlement.
  4. Many big companies, in order to make their employees technologically sounds provide them with electronic gazettes which are either sold in the market for a certain amount of money or used for some other purpose different than what the company has assigned.

Fraud with the insurance company 

Sometimes the case may be that people use false documents to obtain insurance from the insurance company. For example, a person can fake the price of her property by raising its value on the fake documents and obtain insurance for that fake amount. They make the papers in such a way that it seems legitimate and insurance company get defrauded.

The case can also be that the consumer deliberately stage an accident, theft, injury or any other damage which comes under insurance policy. Or they sometimes exaggerate the damage caused. They even go on to omit or provide false documents or application or information to claim insurance. Also insurance fraud can be committed by an insurance company, agent or consumer where they deliberately deceive the other person for illegitimate financial gain. 

Two officials of the Life Insurance Corporation of India were arrested for falsely extracting 3 crore rupees as death claims from the company. The officials forged documents they manipulated around 190 insurance policies with the account numbers of their acquaintances in place of the real nominee. Though the origin policy holders were alive they could not make out the fraud that has been made to them. 

Relevant Legal provisions under the Indian Penal Code, 1860

  • Section 205 which deals with false personation in suit or in a proceeding
  • Section 420 that deals in cheating and inducing someone to deliver property with dishonest intentions.
  • Section 464 which talks about making false documents

The kick-back fraud 

A kickback fraud is one in which one person bribes another with something of value in order to convince the other to take a favourable decision. For example, a contractor in order to get the approval for building complex bribes the government official with a promise to give a small art of the land to him. In another example, a biomedical company offers a doctor to advertise his products by advising it to his patients and in return, the company would provide him with free travelling for the next 5 years.

Abhishek Verma, the youngest billionaire at the age of 28 in 1997, known as the ‘Lord of War’, was arrested for his involvement in the Scorpene submarines deal case, AgustaWestland VVIP helicopter bribery scandal and Navy War room leak case. He was accused of having received kickbacks for a total sum of 200 million dollars. 

Racketeering

It refers to a wrongful act or says criminal act of a person where he indulges in illegal business with a profit motive.

The number of cases of racketeering has experienced a rise in the recent times. According to a report published in India Today in February, 2019, Raju alias Hakla was arrested for his involvement in 113 cases of murder, dacoity and robbery.  A kidney racket case was revealed in 2019 where a businessman from Gujarat, Brijkishore Jaiswal, was about to undergo an illegal kidney transplant. This happened in Powai’s Hiranandani hospital. When the wrongful practice was unveiled, the CEO of the hospital, Sujit Chatterjee and 5 other people were taken under arrest.

Fraud in buying and purchasing of securities

When the broker of  a company wrongfully shows the inflated price of stocks in order to make people invest in his stock, it is called securities fraud.

In 2019, pursuant to the report published by News18, Anilesh Ahija, known to the public as Neil, CEO and Chief Investment Officer of Premium Point Investments LP (PPI), an investment firm that managed hedge funds along with Jeremy Shor, former PPI trader, was arrested on the charge of securities fraud.

They collectively participated in a scheme to inflate the net asset value for hedge funds by more than USD 100 million. They started manipulating the funds by raising the value of the securities and thereafter obtained inflated quotes for the PPI which helped them raise USD 100 million. This kept the real value hidden and got the people into the trap by showing the inflated value of the securities of the PPI.

Fraud over calls

Commonly known as telemarketing fraud, these frauds are made over the phone calls. Here, a person is approached to make an investment for building a charitable organization, or asks for their bank account details to obtain a certain amount for charitable purposes. The amount received is then used for any other purpose other than the one it has been taken for. 

Paul Witt, a Supervisory Data Analyst at Federal Trade Commission provided an information for its consumer stating that, according to a report on the number of cases of fraud, it has been found that people have lost 1.48 billion in 2018 which shows a rise of 38% from what was in 2017.

Fraud in welfare activities

Welfare fraud is committed when a person tries to seek profit from the State or the Federal Government by deriving benefits from its activities like public assistance, food stamps, or medical facilities, etc.

For example, Abdul Karim Telgi, was accused in the stamp paper case in India where he appointed 350 fake agents to spread the scam around 12 States. This business included selling stamp papers to banks, insurance companies, and those firms which dealt in stock brokerage. He was able to club around 200 billion rupees. 

Using wrong weights 

The Consumer Forums are flooded with cases where shopkeepers use false weight to sell their goods. The people who become victims of these frauds are the ones who are illiterate. The illiterate could not make out if their are being defrauded by the seller. This sort of crime was prevalent at a very large scale in the early times. Now that digital weighing machines are used, the rate of these crimes have reduced. Also, since the literacy has gone up over a period of time, sellers face a difficulty in befooling their customers.

In Emperor v. Kanayalal Mohanlal Gujar [13] Sawkar, the accused, bought certain quantity of hirda from the vendor, Savleram. ‘Adholis’ which are primitive methods of measuring weights was used to measure the hirda. Despite warning from the  patil of the village to not use these weights as they didn’t give accurate measures, Sawkar agreed to use them and later on seize the adholis and filed the suit. Sawkar said that false weight have been used to measure hirda but the court said that since he had agreed to the same and also Savleram didn’t had bad intent, Savleram would not be held liable for fraud.  

Common types of white collar crime in India

Bank fraud

Bank fraud is a criminal act where a person, by illegal means, withdraws either money or assets from the bank. The fraud can also occur when a person falsely represents himself to be a bank or financial institution and withdraws money or assets from the people. 

Therefore we conclude that bank fraud can be committed in two ways:

  1. By using illegal means to withdraw money or assets from the bank or any financial institution.
  2. By falsely representing oneself to be a bank or any financial institution, the person extracts money or assets from people.

Bank frauds are punishable in India under the Indian Penal Code, 1860. Various sections like Section 403 which deals with criminal misappropriation of property, section 405 which deals with criminal breach of trust, section 415 which deals with cheating, section 463 deals with forgery and section 489A deals with counterfeiting of currency, deals with the crime of fraud in banks. 

Types of bank fraud 

  • Imitating a financial institution

When one person falsely representing himself to be a financial institution, either by establishing a fake company or by creating a fake website in a manner that it would attract people and make them invest in that bank, then that person is said to have committed bank fraud.

The Times of India reported that two men were arrested for creating a fake website of State Bank of India and running a racket therein. They have been able to defraud people for rupees 1 crore. The two men were Sahil Verma and Monu from Haryana. They were alleged to have cheated against any people and made fraudulent use of the computer resources. 

  • Defrauding by means of checks

Offenders in this case obtains a job whereby they could have access to the company’s post offices, mail boxes, corporate payrolls, etc. Once they gain access, they steal the checks and thereafter deposit it in a fake account created by them.

The timesnownews.com had published a news asking people to beware of fake emails being said to them in the name of RBI (Reserve Bank of India) lottery. The email contained the logo of RBI along with the address its head office in Delhi. Although RBI had circulated a warning against it, the id again came into circulation taking into its grip many innocent citizens. 

  • Falsely getting loans approved

Sometimes the person who is applying for a loan fakes information on the loan application and provides wrong documents to show himself as eligible for the loan. An individual can also wrongfully claim to be bankrupt, after obtaining a loan from the bank. This would also amount to bank fraud.

Anuj Pandey was arrested by the M.P. Nagar police for producing false documents and obtaining loans from the bank.

  • Bank fraud using internet

People often become a victim of internet fraud. A person may create a fake website representing itself as a financial institution and advertising in such a way the it lures people to invest in that bank. 

Three persons from West Bengal and Orissa were alleged for creating a fake website named, ‘Rail Vikas Nigam Limited’. The website made fake representation to people regarding job opportunities. The accused who were arrested were, Narayan Patra and Govind Sinha. The victims complained that any information regarding working of the company, its achievements, and other advertisements were being reported on the official website but no recruitments were taking place.  

There has been an unprecedented rise in the number of bank fraud cases as reported by livemint.com. According to a report by the Reserve Bank of India (RBI), a total of 5,916 cases of bank fraud has been reported in 2017-18 involving a sum of 41,167.03 crores. This included high profile fraud cases like that of Nirav Modi and Vijay Mallya.

  • Bribery 

Bribery is a white collar crime where a person asks for money, or a favor, or something of value in order to get the other person’s work done. For example, if an electoral officer asks a person to offer him wine and only then will he be allowed to give vote, it would amount to bribery.

The punishment for bribery has been provided under Section 171E of the Indian Penal Code, 1860 which says that any person who commits such an offence would be imprisoned for a term which may extend to 1 year or with fine or both. Also, Section 13 of the Prevention of Corruption Act, 1988 has penalised acts constituting an offence under this head, being engaged in by public officials. 

Types of bribery

  • Where public official bribes or is bribed

If any public official demands, or exchanges something in return for performing his duty which he is bound to perform within the power of his office, then he would be held liable for bribery under the Prevention of Corruption (Amendment) Act, 1988. ‘

Also, if a person attempts to bribe a public officer for his own advantage or for getting his work done, then that person, along with the public official, will be held liable.

  • Where a witness bribes or is bribed

When any witness demands, exchanges, or receives bribery in any form to give false testimony, or for bringing in a fake witness in the court, then he would be held liable under the crime of bribery.

  • Where a foreign official bribes or is bribed

It is illegal to bribe a foreign government official with money or gift. Government officials often indulge in this type of white collar crime to maintain important business contacts. 

  • Bribing bank officials

It is illegal to bribe a bank official, director, manager, etc.with either meals, entertainment, or any other way, either for employment, or wages or hike in salaries. 

  • Where a sporting official bribes or is bribed

A sporting official may ask for a bribe to ‘fix’ a match. In this case the one briefing and the one who received the bribe, both will eventually be held liable for committing a crime. 

  • Bribing in an industry 

Kickbacks are often associated with industries like, health industry, or in pension plans, etc. For example, one pension provider bribes the broker of a company to convince that company, to accept his pension offer and not offers made by other pension providers. 

cyber crime
Image Source: https://bit.ly/2L7HCUY
  • Cybercrime

As the use of computer and internet is increasing, so is the crime related to it. The crimes which involves the use of computer, coupled with the use of internet are called cybercrime. It is where the computer is used as the object of the crime or as a tool to commit an offence.

The only legislation which deals with the offences related to cybercrime is Information Technology Act, 2000. The exact definition of cybercrime hasn’t been provided in any of the acts or laws as it is not possible to define such a nature of crime where computer and internet is involved. 

Categories of cybercrime

  • Property 

This sort is similar to a real-life instance where a person illegally possess someone’s bank account or credit card details. Here the hacker intrudes into the personal details related to the account or credit card to gain access to the funds, to make purchases or to run phishing scams. Also by using malicious software one gains access to the confidential information. 

  • Individual

Where a person illegally distributes that information which the law prohibits from publishing, like, distributing pornography. This sort also includes trafficking and stalking.

  • Government

A crime against the government is called cyber terrorism. This includes crimes like hacking government websites, military websites or distributing propaganda. These criminals are usually terrorists or enemies from different nations. This crime is the most serious one, and its rate is presently very low in India.

The major types of cyber crimes prevalent in India are as follows:

It is the publishing and distributing of obscene material of children in electronic form. Child pornography is a heinous crime that occurs. It has led to various other crimes such as sex tourism, sexual abuse of the child, etc. 

The rates of this crime have increased over the years because of the access to internet being so easy. According to a report published in the Times of India in 2019, there has been a total of 10% rise in the cases of child pornography, inclusing offences like rape and molestation, in 2018 as registered under teh Protection od Children from sexual Ofeences Act (POCSO).

Mumbai police presented a report stating that between January 2015 and May 2019, a total of 4,551 such cases have been reported in Mumbai. The POCSO Act which includes crimes like rape, sexual assault, sexual harassment, child pornography comprises 33% off the total crime being committed against children. The maximum crimes under POCSO Act was recorded in Uttar Pradesh.

Relevant provisions under POCSO Act

After the amendment in the POCSO Act in 2012 several provisions have been amended to bring in stringent punishment agaisnt child pornography.

  1. Section 4 and 5 have made penlities more stringent and has included death penalty as punishment for crimes like sexual assult of  achidl or performing penetrative sexual assualt with a with.
  2. Section 9 of the Act provides protection to children in time of natural calamities and where the children are made subject to injection of hormones or any other chemical substance to attain sexual maturity earlier than their age permits. This is doen for teh puprse of erforming penetrative sex assault.
  3. Section 14 and 15 impose penalties on those offenders who refrain from deleting or destroying those pornographic contents or reports which involves a child. They post it intentionally and then share it with others committing a crime against that child. 

The growth in online sexual harassment has seen an increase in India. The harassment faced by women online, is the mirror image of the harassment faced by them in the real world. A survey conducted by Feminism in India states that 50% of women in major cities of India have faced online abuse. What is more shocking is that the instances of cyber stalking against men also show an increase. Experts have found the ratio of stalking of women and men to be 50:50. 

Terrorism can be defined as, “the unlawful use or threatened use of force or violence by a person or an organized group against people or property with the intention of intimidating or coercing societies or governments, often for ideological or political reasons.

Mark M. Pollitt defines cyber terrorism as, “the premeditated, politically motivated attack against information, computer systems, computer programs, and data which results in violence against noncombatant targets by sub national groups or clandestine agents.

To have a clear definition of cyber terrorism is difficult as the scope of cybercrime is very broad, and sometimes involve more factors than just a computer hack.

Characteristics of Cyber Terrorism:
  • Attack is predefined and the victims are specifically targeted.
  • The attack made has an objective, to destroy or damage specific targets such as political, economic, energy, civil, and military structure.
  • Attack may have an intention of opposing any religious group’s information infrastructure to insight religious racket.
  • Destroy enemy’s capabilities to further operate within their own arena.

Major cases relating to cyber terrorism

  • Case 1

The website of the Bhabha Atomic Research Centre (BARC) at Trombay was hacked in 1998. The hacker’s gained access to the BARC’s computer system and pulled out virtual data.

  • Case 2

In 2002, numerous prominent Indian web sites, notably that of the Cyber Crime Investigation Cell of Mumbai were defaced. Messages relating to the Kashmir issue were left on the home pages of these web sites.

  • Case 3 

In the Purulia arms drop case, the main players used the internet extensively for international communication, planning and logistics.

  • Case 4

In 2007, the two Indian doctors involved in the Glasgow airport attack used computers for terrorists’ activities.

  • Case 5

Former Indian President, Dr. A.P.J. Abdul Kalam has expressed concern over the free availability of sensitive spatial pictures of nations on the internet. He pointed out that the internet could be utilized effectively for gathering information about the groupings of terrorists. According to him, earth observation by “Google Earth” was a security risk to the nation. 

  • Money laundering 

When a person, the launderer, converts his illegal money into legitimate money, and thereby succeeds at hiding his illegally earned money, is said to have committed the crime of money laundering. In India “Hawala transaction” is the name given to the crime of money laundering. Money laundering has been defined under Section 3 of the Money Laundering Act, 2002.

They money launderers do their job in such a manner that not even the investigating agencies are able to trace the real source of the money. This is how people who invest their black money in capital market succeed at converting the black money into legitimate wealth. 

The three major steps involved in money laundering are:

  • Investment

As the first step, the launderers invest their illegal money into the black market via agent or banks in the form of cash. This is done either through formal or informal agreements.

  • Manipulating the details

The second step is to hide the details of the real income of the launderer. In order to do so, the launderers, often deposits their money in the form of bonds, stocks, etc. into  a foreign bank.They prefer to invest in those bank that does not reveal the identity or the details of the account holder. This helps in manipulating the information of the owner of the money and the details regarding the source of the money. 

  • Making what is illegal, legal

The final step is where the black money introduced into the market is finally converted into legitimate money and introduced into the financial world.

Cases of money laundering in India

  1. BCCI (Board of Control for Cricket in India) was alleged to have laundered dollar 23 billion by introducing itself into the market of arms and drug smuggling. 
  2. In the case of Anosh Ekka v. Central Bureau of Investigation,[4] Anosh Ekka was alleged to have been involved in money laundering as, after becoming the minister acquired a huge amount of movable and immovable assets in his name and in the name of his family within a short span of 3 years. The Supreme Court held the accused liable for looting and laundering huge amount of public wealth. He delayed the judgement and also manipulated the evidence against him. He was also accused of abusing the lawmaking process and contempted on the justice delivery system.
  3. In Arun Kumar Mishra v. Directorate of Enforcement, [5] five people created a fake account in the Punjab National Bank (PNB), and thereby collected money as personal gains and caused huge loss to PNB. The money laundering case was not held in this case as the offence did not fall under any provision of the Prevention of Corruption Act.  And under Article 20(1) of the Constitution of India, it has been said that ex-post facto laws have no effect. Under the said Article it is a fundamental right to not be prosecuted by a law that did not exist at the time of commission of the offence. However, the court said that once money laundering has been fully established against the petitioner, the Enforcement Directorate can initiate a fresh proceeding against him under the law which in force thereafter.

tax evasion

  • Tax evasion

Tax evasion is when a person deliberately forges his state of affairs in order for the authorities to levy less amount of tax. This can either be done by an individual, a corporation or a trust. It is a false means of escaping government taxes. In simple terms, Tax evasion and avoidance both is an offence which is used to reduce one’s tax burden. The offence of tax evasion is punishable under Chapter XXII of the Income-tax Act, 1961, which can impose heavy amount of fine or even send you to jail.

 

Tax evasion= (amount of income that has to be reported) – (the actual amount reported)

 

Situations where one could be penalised for tax evasion

  • Failure to file income tax returns

If a person fails to fulfil the requirement of filing the income tax returns as laid down under Section 139 (1) of the Income Tax Act, 1961, then a fine of rupees 5,000 or more could be imposed.

Parbodh Anand sold his flat which was registered in his own name. The buyer of the flat gave the amount in the name of both, Anand and his wife. Since the flat was registered only in Anand’s name therefore the capital gains that his wife had becomes taxable, which they did not pay and therefore landed up receiving a tax notice. 

  • Not providing a PAN card or giving a fake one 

If a person does not provide a PAN (Permanent Account Number) to his employer, at the time of employment or provides a fake PAN number, then, he would be subject to a penalty of rupees 10,000.

The Economic Times had published a report stating that 4 men were arrested for running 6 fake firms who were in the racket of GST evasion amount to a total of 60 crore rupees. They were alleged to have used various fake documents, including fake PAN (Personal Account Number) cards. These fake firms have been able to generate 615 crore rupees which led to causing huge loss to the general public.

  • Giving false information under form 26AS

Under Section 203AA of the income Tax Act, 1961 one is required to fill in Form 26AS. It is very important to look into the information which has been provided because any wrong information would lead to severe punishment. Similarly, one would be punished even if he/she has provided wrong information regarding income, expenses or investment.

Pursuant to the report published by the Economic Times it was found that around 15,000 crore rupees was tax exempted by the employers regarding the medical bills If an employee desirese tax-exempt reimbursements he is given Leave Travel Allowance and HRA by his employer. Those who have the bills or receipts of the same can only pay the sum. But those who didn’t have the bills or receipts tend to use fake documents to get reimbursements. 

  • Punishment for not paying self-assessment tax

If a person fails to pay, either the entire sum or partial amount, self-assessment tax then under Section 140A (1) of the Income Tax Act, 1961, he would be considered as a defaulter. If not provided with a justified reason for the delay in payment, the assessing officer under Section 221(1) of the Income Tax Act, 1961, may impose a penalty.

In Galaxy Nirmaan Pvt. Ltd. v. Acit, new Delhi [12] The assessing officer had levied a penalty on the appellant in the case for non-payment of the self-assessment tax in the year 2010-11. A penalty of 1,09,71,691 rupees was imposed under Section 140A(3) of the Income Tax Act, 1961.  

  • Giving a wrong account of income to escape tax payment

Section 271(c) of the Income Tax Act, 1961 states that if a person conceals his real income in order to reduce the amount of taxes, he would be liable to 100% to 300% of the amount of the tax evaded by him. Section 271AAB lays down the different situations where the penalty would apply.

The article published on livemint talks about a case where a resident of Haryana was arrested for running racket where about 90 firms presented bogus invoices to evade taxes. The Directorate General of GST Intelligence (DGGSTI) found a total of 110 debit cards and blank cheque books linked to 173 bank account.

  • Keeping silence on the income tax notice

The assessing officer, under Section 142(1) or 143(2), can issue a notice, asking the person to either file the return of income or asking the person to give all the details in writing, in case the person has failed to comply with the notice given to him by the Income Tax Department. 

A Times of India report stated that: “Mridul stood shivering outside the magistrate court in Mumbai for he could have been given rigorous punishment for having defaulted on the notice given by the Income Tax Department for 30 days. The Notice was for not having deposited TDS which she had collected from the employee’s salary. 

  • Cellular phone fraud

The Cellular phone fraud refers to tampering, manipulating or making an unauthorized use of cellular phones or service. The offender in this case would make a fake account in your name and get an access to your bank account details, credit card details, and make payments without your consent. The offender may even sell your cell phone to other criminals to use it in commission of illegal acts.

The use of the IMEI number of a mobile phone without taking the permission of the person who owns it is punishable with imprisonment for a maximum term of 3 years as laid down in the Mobile Device Equipment Identification Number, Rules, 2017. This provision has been made in combination of Section 7 and Section 25 of the Indian Telegraph Act, 1885. Where section 7 gives the DoT (Department of Telecom) the power to make rules for the conduction of telegraph and telecom services, section 25 says that any damages if caused to the telegraph lines, machines or any such equipment will be imprisoned for up to 3 years or fine or both. 

According to an article published in the Business Standard the social media frauds, where crooks use stolen identities and credit card details to obtain illegal gains, have increased by 43% in 2018. Using mobile applications, mostly whatsapp, facebook and instagram, to defraud people have seen a rise of 680% between 2015 and 2018.

This pose a threat to the online social media users and they need to be conscious and careful while using it. This calls for taking proper protection of one’s account and credit card details while providing it online on a website.

  • Computer fraud

When a computer is used to gain profits by defrauding people, it is called computer fraud. It is punishable under section 43 of the Information Technology Act, 2000. It penalizes the offender by asking him to pay compensation. It can be done via the internet, internet devices or internet services. The following activities amount to illegal use of computer- phishing, social engineering, DDoS, viruses, etc. 

The various types of computer fraud are

  • When a mail becomes widely circulated, ie. hoax mail, and thereafter is used by the crooks for illegal activities via computer.
  • When a person tries to access or secure access to another’s computer, computer system or computer network without his/her permission.
  • Where the computer is used to download or copy or extract any data or computer database or information from a computer or its system or its network. The information or data under this head includes those data as well which is stored in the ‘recycle bin’ folder.
  • When a person tries to damage or cause disruption to a computer, or the computer system or the computer network.
  • Where a person tries to stop a person who has legal or authorized access to a computer from using a computer, or computer system or a computer network.
  • Where a person assists another person in gaining access to another person to operate a computer or a computer system or a computer network.
  • Whereby manipulating or tampering any computer, computer system or computer network., charges another person for the services availed.
  • Where a person diminishes the value of the data by tampering or manipulating the computer, computer system or computer network.
  • Where a person steals, conceals, destroys or alters or causes any person to steal, conceal, destroy or alter any computer source code used for a computer resource with an intention to cause damage.
  • There can be computers in a company which can be accessed only by a few technical team members. If an employee who is not authorized to use it, uses it for personal gains by illegal means and he would be said to have committed a crime.
  • When a person having complete knowledge of how the system of a computer works, tries to set patterns in data set without being authorized to do so by introducing in the system any spyware or malware he is said to have committed a white collar crime.
  • The news of accounts getting hacked is very common. Hackers often hack account to gain access to personal information of the user and then using that information to do an illegal act.
  • It is no big deal for computer experts to introduce in the system any virus that would disrupt its working and cause loss of data to the user.
  • Counterfeiting

Counterfeiting is a criminal act defined under section 28 of the Indian Penal Code, 1860, where the imitation of something authentic takes place in order to steal, destroy or replace somebody’s original work. This facilitates gaining profits from illegal transactions and deceiving a person who believes that the representation is made to him is true and the imitated work is of more value. 

The crime of using counterfeiting is generally related to coins and currencies and is punishable under section 489B of the Indian Penal Code, 1860. In some cases, it also relates to imitating of products like clothes, bags, shoes, watches, art, toys, etc. Counterfeit products carry fake logos and brand names and in some products, harmful chemicals have also been found leading to the death of the person using it. 

The cases of counterfeiting coins have experienced a serious rise in India. On 4th July 2019, three people were caught by the Special Task Force of Kolkata upon finding fake Indian rupees with them whose total face value was rupees 6,50,000. In Rajkot, two people were caught recently with 1,080 counterfeit currency notes having a face value of 21.60 lakh, as per the Times of India report.

extortion

  • Extortion 

Extortion is a crime under section 383 of the Indian Penal Code, 1860. When one party coerces another party for payment of money, or property or services, he is said to have committed the crime of extortion. It is called a white collar crime because an officer may use his official right and make use of his higher position in the company to threaten another person for giving money, or transferring property, or for providing services.

The important elements which constitute the crime of extortion as laid down in the case of People v. Fort [6] are:

  • There should be a communication of demands by one party to another
  • In order for the fulfilment of the demands, the other party or his family should be threatened to cause some injury
  • There should be an intent to extort money from the other party for some advantage. The other party should be threatened to do or not to do something.

For example, David Letterman, an American television host, was extorted for a sum of $2 million in case of involvement in sexual relationships with female employees. The suspect, Robert Halderman, was later caught and punished.

In another case, a famous actress and model, Cindy Crawford and her husband became a victim of dollar 100,00 extortion case where their daughter’s picture in which she was tied and gagged was to be revealed in the public if the couple did not adhere to the demands of the suspect.

  • Fake employment placement rackets

There have been many cases where a student or a person looking for a job has been deceived by offenders who claim to provide placement or jobs to them and later on run away with the money they have taken as an advance to provide them with employment. Section 66D of the Information Technology Act, 2000 states the penalties to be imposed on a person for cheating on another person through personation using computer resources. 

For example, Ajay Kolla, the CEO of Wisdom Jobs was arrested along with 13 other staffs in January, 2019 on the charge of false recruitment. Wisdom Jobs was an award-winning recruitment firm which was established in the year 2009. Since then, Ajay Kolla had duped around 1.04 people, earning nearly 70 crore rupees out of fake placement promises as reported by the Economic Times. 

  • Forgery 

Forgery, as defined under Section 464 of the Indian Penal Code, 1860, refers to the counterfeiting of checks or securities with the intention of defrauding the other person. It is very common in the accounting section of the company where the clerks or the staffs make false records and run away with company’s money thereby causing loss to that company.

For example, in 2019, Ravi Prakash, CEO of TV9 News Channel, was removed from his post on the charge of forgery. Based on the ABCPL press note, NDTV in its report said that, Ravi Prakash in order to misguide the Registrar of companies, had forged the signature of the secretary of the company. It was also alleged that Ravi Prakash moved by self interest and bad intention, had filed false cases against the new directors. He convinced the third parties to file false cases against the company, thereby, preventing the directors from carrying out their work.

White collar crime in other professions

  • White collar crime in medical profession 

The problem of the relationship between the doctor and the patient had been recognized long back by the penologists. Manu said that the ones indulging in false practices, for example, where a doctor makes false diagnosis report, heavy fine would be levied on him. Removing of immature fetus was considered to be a heinous crime and such person was called to be subject to severe punishment.

There have happened many cases where the medical practitioner have had no license to practice medical profession. The doctor treating the patient had turned out to be a fake doctor who has only deceive the patients by not treating them properly and running away with their money.

Examples of white collar crime in medical profession could be- issuing fake medical certificates, facilitating illegal abortions, selling sample drugs and medicines directly to the patients or to the chemists in India. Sometimes, the professionals in the medical field are seen giving advice to criminals of how to escape the allegations using medical grounds.

In Karnataka, two doctors, K.H. Jnanendrappa and K.M. Channakeshava, were charged with making fake medical certification for Abdul Karim Telgi, who was involved in a multicrore stamp paper racket in order to help him get bail on the ground of health issues . Therefore, under the Prevention of Corruption Act, 1988 they both were held liable with 7 years imprisonment and with a fine of 14 lakh rupees each

  • White collar crime in legal profession

Legal practitioners often for money or other services by their clients, present false evidence, fake witnesses in the court. Legal practitioners with the ministerial support involves in wrongful practices and violate all their ethical standards for some amount of money. Manipulating evidences and faking witnesses by bringing in professional witnesses, gives the case another turn, because of which many times the real accused is left free and the innocent is sent behind the bars.

It was in 2006 when D.K. Gandhi, a resident of Delhi filed a case against the wrong practices of his lawyer. Gandhi had appointed the lawyer for a certain amount of money. The lawyer was supposed to dispose off the case as early as was possible. The case was settled in the first hearing itself and Gandhi was to receive the compensation amount. However, the lawyer refrained from giving the amount to is client, Mr. Gandhi, unless an extra sum of 5,000 rupees was paid to him.

So in the case of D.K. Gandhi v. M. Mathias [10] when referring to the what the Supreme Court had said in Jacob Mathew v. State of Punjab [11], held the appeal and left the matter to be decided by the State Commission based upon the law.

In the case of Jacob Mathews, the Supreme Court had said that: in law of negligence, the professionals from different professions like, legal, medical, or architecture, or any other would be held liable for negligence in practicing their profession if that either of the two given conditions are satisfied: a. He did not have the required skill that was needed to be professed and, b. Even if he has the required skills to be professed, he did not exercise the same. 

  • White collar crime in the engineering profession

Engineers, like mining engineers, are often found to be involved in malpractices like providing substandard works and materials and also not maintaining the records or maintaining bogus records. These types of scandals are often reported on new channels and cause huge losses to the company.

In April 2019, India Today reported that an assistant engineer by the name of S.F. Kakulte was arrested for negligence because of which a bridge had collapsed. Along with Kakulte four other engineers and the chief engineers of Bombay Municipal Corporation were involved in the project. The Structural Auditor, Neeraj Desai, was also arrested for negligence in the report. He claimed that beams, pillars, metal fixtures were audited but the concrete slabs were not mentioned in the inventory given to him for the audit as a result 6 people had died and 35 were seriously injured

  • White collar crime in education

Many private educational institutions involve themselves in false practices like using fictitious documents to and fake details in order to obtain grants from the government to run their institutions. The teachers and staff are often seen to be working at very low wages than what was the signing amount. These false practices help the institution raise the high sum of illegal money.

It was in 2019 when the New India Express had reported that a senior railway ticket checking staff was arrested by the Central Crime Branch, for leaking out the questions papers of the exams for the post of constables and sub-inspectors in return for money. 

It was in 2013 when the Time of India published an article stating that the Gujarat Technological College had been appointing engineers for lecturership were not even qualified with a B. Tech degree. Yogesh Patel, who was a lecturer of Civil Engineering at S.R. Patel Engineering College which is affiliated to Gujarat Technological university, had not even cleared his Bachelor’s degree.

He had failed in some subjects like the applied mechanical and earthquake engineering. And he even went for checking papers and also received a remuneration for his work. An inquiry into how a person who is not eligible for the post of ad hoc, that is temporary, lectureship was appointed for teaching purposes. 

Causes of white collar crime in India

India is a country that are faced with various problems on a serious level, like that of starvation, illiteracy and health issues on a large scale. Moreover, India is the second largest populated country in the world, and administration of the mass becomes a problem. Despite having stringent laws, the administration often fails in implementing them, as keeping control such a large number of people becomes difficult. In such circumstances it is very likely for white collar crimes to flourish. The various other causes for the growth of white collar crimes in India are as follows:

  1. The white collar crimes are committed by people who are financially secure and perform such illegal acts for satisfying their wants. These crimes are generally moved by the greed of the people.
  2. Poverty is considered as a major cause for underdevelopment in India. Poverty is a cause for financial and physical duress among the major chunk of population. Since people are so much in need of money, they easily get attracted by the false representations made to them. They forget to look into the veracity of the representations being made to them.
  3. The gravity of white collar crimes are more intense than other traditional crimes. White collar crimes causes one great loss at all levels, i.e. financial, emotional, etc. Corporate mishaps, like false pharmaceutical tests, costs more lives than the crime of murder.
  4. With the advancement in technology, faster growth rate of industries and business, and political pressure have introduced the offenders to newer, easier and swifter methods of committing such crimes.
  5. With the introduction of the people to the internet and digital world, where big transactions takes place within seconds and where reaching out people from all over the world is a matter of few minutes, criminals have got an incentive to commit more crimes and hide anywhere in the world.
  6. Our law enforcement agency also become reluctant to deal with such crimes as these cases are very complicated and tracing a suspect is a difficult job. The investigation in case of white collar crimes is much more consuming than that in traditional crimes.
  7. Even when the offender of the white collar crime has been caught, the judiciary fails to punish them. The major reasons behind the failure to hold these criminals accountable for their wrongful acts are:
  • The legislators and the ones implementing the laws belongs to the same group or class to which the offender belongs and therefore land up assisting these criminals instead of taking actions against them.
  • The investigating officers put in less effort in doing their job as they are not able to connect the small evidences that they get. And despite efforts they don’t get major evidences in such cases as everything is done online and tracing things or person becomes difficult.
  • We don’t have laws on such types of crime and therefore offenders are left free. In many cases due to loopholes in law, it becomes favourable to the offenders.
  • The existing laws do not provide stringent punishment that would prevent people from being involved in such types of crimes. The suspects do not have any incentive to not participate in these types of crime.

It is disappointing to know that despite white collar crimes being prevalent in the society and many people getting under its grip, no measures are being taken to prevent the commission of such crimes. The reason behind this is that white collar crimes are committed by influential people who enjoy higher social status.

The emergence of white collar crime in India

white collar crime in the ancient time

It is said that crimes have been taking place since the time human beings started living together. There are various crimes which have swept away with times and there are some which have found different dimensions to them with the society becoming modern. The ancient Vedic text says that the concept of white collar crime has existed in society from the very beginning. 

bribery
Image Source – https://bit.ly/2Ov0noE

The crime of bribery

  • The concept of bribery is not a new concept in Indian society. References to these crimes can be found in the various sacred book. 
  • Narada had once said that if a man gives something out of fear, anger, lust, grief, in jest or by mistake or through a fraudulent act by a minor, or in an intoxicated state would be considered as a bribe. 
  • Yagnavalkya once had proposed that the king, the supreme authority, should kill the dishonest officer and reward the honest ones. He further adds that those people who will try to extort a person, their property would be confiscated and then transported. 
  • Kautilya in his Arthashastra has claimed that the functions of the ones in power will be monitored and in case of any negligence, they would be charged.

Health

The health of the people has always been a matter of concern for the people. In the ancient time also, to prevent an epidemic from breaking out, selling of dog’s meat was made punishable. Yajnavalkya, Vijnaneswara and Kautilya proposed the different kinds of punishment one could be subject to if they get involved in the sale and purchase of dog’s meat. 

It was Ashoka who established hospitals for human beings and animals taking into consideration the health of the mass. In his edicts, Ashoka, warns people to not use meat as a food material and abstain from killing birds for food. 

Using of false weights in stores

To keep the economy on the right track it is essential to refrain from wrongful market tactics. In ancient times, the shopkeeper often used false weights and measures to make profits. Kautilya said that in order to avoid such wrongful market practices by the shopkeeper there should be a supervising officer who would look into the transactions happening in the market. Kautilya along with Yajnavalkya had suggested the imposition of a fine in case one is caught practising wrongful tactics in the market. 

Section 8(3) of the Legal Metrology Act, 2009 defines such offences which involve the use of false measures or weights other than the standard measure or weights required. Section 25 of the Legal Metrology Act, 2009 penalises the offenders with fine with may extend up to 25,000 rupees and for subsequent offences, the punishment shall imprisonment which may extend to a period of 6 months or with fine or both. 

Counterfeit coins

The Indian economy was the first economy where coins were used as a medium of exchange. In ancient times it was the guild who was in charge in monetary matters. Coins were minted in silver, gold and copper which were manufactured under the control of the State authority. Kautilya introduced a rule which said that the one who counterfeits the coins would be penalised. He used the word ‘Nanaka’ for counterfeit coins and the ones who manufactured it was called ‘Kutarupa Kara’.

Growth in the modern era

In India rapid industrialization after the First World War (1914 to 1919) led to a class divide. There existed two classes of people, the capitalist, the class owing the major means of production, or say the bourgeois institution and the proletariats or the working class. The extreme business condition with the fast growing economy led to the social exclusion of the proletariat class.

The high level of competitiveness and greed for enjoying monopoly led to the growth of criminalist behaviour. The seed of white collar crimes was planted by this time. Where the nation was busy in the freedom movement, and fighting war, these criminal acts grew up posing a threat to the growth of the Indian economy.

Courts and white collar crime in India

The white collar crimes have not been defined anywhere in the law, but there exists various legislations which imply the existence of such crimes. In the recent years with the emergence of new technologies and advancement in different sectors, like the industrial sector, business sector, etc., these crimes have experienced a rapid growth.

We are well aware of the fact that more than 3 crore cases are pending before the Indian judiciary. In this case, it would be very difficult to dispose of the cases of white collar crimes as early as possible.

In order for faster disposal of the cases of white collar crimes, it is important that fast track courts and tribunals are set up in the country. Also, once the case would be decided as final by the tribunal or the fast track court, then, that decision would be binding on the parties. The parties would not be allowed to raise the same issues, in the same case again before another court.

 White collar crime investigation

  • White collar crime investigation process

There has been a recent growth in the investigation process of white collar crimes in India. With the increase in the number of anti-corruption marches, the companies are experiencing an increase in a time-to-time investigation. These internal investigations acts as a watchdog against any unwanted activity. This further prevents the company from embarrassing raids. In India, there is no strict procedure which needs to be followed while conducting these internal investigation relating to the white collar crimes. 

With the breakout of the #MeToo movement, companies have got an incentive to fasten their investigations in sexual harassment cases. 

For example

  1.  When the CEO of ICICI Bank, Chanda Kochhar was facing charges of fraud, the bank resorted to internal investigation by Reserve Bank of India, Securities and Exchange Board of India and Central Bureau of investigation. To look into the matter an independent committee was set up which was headed by retired supreme court judge, Justice B.N. Srikrishna.
  2. When Binny Bansal, Co-founder and group chief executive of Flipkart, was alleged for serious misconduct, the bank decided for an independent investigation which would be carried out on behalf of Flipkart and Walmart.
  • White collar crime investigation techniques

There are a few basic techniques for the investigation of white collar crimes, and they are:

  1. There should be an informant in the team who would give the first hand information about a white collar crime taking place or had taken place in a company and keeps the investigating officers updated with all that was, is or will be going on in the company. Unless and until somebody informs the police about the crime, no investigation can take place. Therefore, the role of informants become important.
  2. Involvement of undercover agents. The presence of undercover agents are important as they help in tracing those evidence which are not prima facie evidence. They also help in giving information regarding people who go underground and then commit serious offences. Since tracking such people is not possible by the police officers, they appoint undercover agents who without any hint to the accused gets all the details about him.
  3. Introducing the examination of the physical evidence in the laboratory is very crucial for deciding a case. The medical evidences play a key role in giving a direction to a case. If not manipulated, then the medical tests are very efficient in determining who the accused would be in cases of serious offences, like rape.
  4. Police officers are often seen conducting physical surveillance through dogs and electronic surveillance through CCTVs, or tracking call records, etc. These surveillance helps in tracking down even the smallest of evidence against the suspect. 
  5. Interrogation is that tool in the hands of the police which helps in taking out those information from the suspects which they would not have otherwise given.
  6. Wiretapping where the law permits to do it helps in proving the guilt by way of producing call record in the court. In some cases, call records are sufficient evidence to hold a person guilty of an offence. 

Legislation against white collar crime in India 

There are several provision that exists for identifying white collar crime. Government in order to ensure that the criminal committing white collar crime be punished has brought in the following legislations-

  1. The Companies Act, 1960
  2. The Income Tax Act, 1961
  3. Indian Penal Code, 1860
  4. The Commodities Act, 1955
  5. The Prevention of Corruption Act, 1988
  6. The Negotiable Instrument Act, 1881
  7. The Prevention of Money laundering Act, 2002
  8. The Information Technology Act, 2005
  9. The Imports and Exports (control) Act, 1950
  10. The Special Court (Trial of offences relation to Transactions in Securities) Act, 1992
  11. The Central Vigilance Commission Act, 2003

Penalties for white collar crimes

Sentencing in white collar crime in India

Punishment for fraud

Section 447 of the Companies Act, 2013 provides punishment against the commission of fraud. It states that in case a person is found guilty of an offence of fraud he would be imprisoned for a period not less than 6 months and which extend to 10 years. And he will also be subject to fine which should not in any case be less than the amount involved in fraud and which may extend to 3 times the amount involved in the fraud. In case the fraud has been committed against the interest of the general public than the term of imprisonment would not be less than 3 years.

Punishment for false statement

Section 448 of the Companies Act, 2013 states that: if a person deliberately makes a false statement, knowing it to be false or deliberately omits any material fact, knowing it to be material than he would be held liable for his wrongful act. This false statement can be made either through return, report, certificate, financial statement, prospectus, statement or any other documents required for the purpose mentioned under this Act or any rules made under it. 

Punishment for furnishing false evidence

Section 449 of the Companies Act, 2013 provides for punishment for furnishing false evidence. It states that if any person gives a false evidence in a court of law:

  • Either upon an examination on oath or solemn affirmation; or
  • When any company is about to dissolve or otherwise also in case of any matter arising under this Act, in any affidavit, deposition or solemn affirmation,
  • He shall be punished with imprisonment and fine both. The imprisonment will not be less than 3 years and may extend to 7 years and fine may extend to 10 lakh rupees.

Punishment when no specific punishment or penalty has been provided

Section 450 of the Companies Act, 2013 states that in case a punishment or penalty for  a crime, which has been committed either by an officer of a company or by any other person who contravenes any of the provisions of this act, then under this section he would be penalized with a fine which may extend to 10 lakh rupees. In case the contravention continues the person would be asked to pay a fine which may extend to 1,000 rupees everyday till the intervention continues. 

Punishment when the default has been repeated

Section 451 of the Companies Act, 2013 lays down that, when a company or any officer of that company commits an offence for which he has already been penalized and has also faced imprisonment, in case commits the same offence again within a period of 3 years, than that company and every one of those officers involved in the commission of the offence for the second time shall be punished with twice the amount of fine, in addition to the term of imprisonment provided in the act for that offence. But, in case the offence was committed after a period of 3 years of commission of the offence for the first time then this rule would not be applicable.  

Appointment of adjudicating officers

Section 454 of the Companies Act, 2013 says that the Central Government, by an order stated in the official gazette, has the power to appoint an adjudicating officer who will have the right to adjudicate penalty under the provisions of this act. The Central Government will also decide the jurisdiction for the officers.

The adjudicating officer can impose a penalty on the company or its officers on the grounds of noncompliance with the given provision under the Act. In case an officer who has been penalised by the adjudicating officer is dissatisfied with his action, he could file an appeal to the regional director would be having jurisdiction in that matter. 

Implications of white collar crime in India

The rate at which white collar crimes are increasing has become a matter of concern globally. It has been found that the detriment that white collar crimes cause to society is much more than other forms of crime. Moreover, India is a developing nation and so an unprecedented increase in white collar crime hampers its image along with being a hazard in the growth of its economy.

Moreover, white collar crimes cause emotional traumas, not only to the victims of the crime but to the society at large. Where the victim is not able to bear the expenses of white collar crime that he had evidence, the society starts losing faith in the authorities. If the authorities at higher positions, who have enormous powers, start using it in a wrongful way, then who else will the citizens trust. 

Also, as these crimes are flourishing all over the country, people don’t find themselves secure anywhere, neither in the physical world nor in the virtual world. Where people were introduced to the digital world to avoid tiring jobs like standing in the queue to deposit or withdraw money from the bank and reduce other sorts of physical labour, it has not become the biggest platform for the commission of white collar crimes. Nowhere does the people find themselves safe.

Above all, despite several movements against the white collar crimes and instituting several rules and regulations via enchantments, the government has not been able to do much for the victims of the white collar crime. The complicated nature of the method of committing such crimes makes it difficult for the authority to find evidence. That is why many criminals move freely and this has become the main reason for the crime to flourish. The criminals don’t find any incentive to commit such crimes which helps them make easy money.

Also one of the major reasons for such crimes to flourish is that media coverage of very few cases takes place in case of white collar crime. Often the media person and the offenders fall under the same group or class and stars favouring them instead of showing their reality to the people.

Moreover, people sitting at a higher position, who commits such crimes, buy the media persons or threaten them to close their channel, in order to stop the media coverage of their wrongful or illegal acts which they commit or have committed during the course of their occupation.

Recent white collar crime cases in India

SEBI v. Burman Plantation and Others [7]

Before the High Court of Allahabad, the learned counsel on behalf of SEBI claimed that the company is being wrongly accused as the company was not in a position to pay its debts, including payments to its investors. When the advertisement by the company was put to question, the council said that the advertisement was given in 2003 while the order was passed in 2004, when the company was not in a position to payback its debts.

Moreover, the sum of money which the investors were claiming was nowhere cited. The main claim of the counsel made the legislatures raise the punishment from 1 year to 10 years and also increased the fine which may now extend to 25 crores by amending the laws under section 24(1) of the SEBI Act. At last, Ravi Arora, the accused, was held liable.

Abhay Singh Chautala v. C.B.I. [8]

There were two appellants in the present case against whom a charge sheet was filed for committing an offence under Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988 read with Section 109 of the Indian Penal Code, 1860 in separate trials. It was alleged that both the accused had accumulated disproportionate wealth as per their income when they were they members of the Legislative Assembly.

When the Central Bureau of Investigation (CBI) initiated its investigation it was found that the father of the appellant had acquired huge properties and same as the case with the appellants. The High Court held that the appellant had provided a totally different office(s) of the accused than they were actually holding at that time. Thus the sanction under Section 19 of the Prevention of Corruption Act, 1988 was held to be without any merit. 

Binod Kumar v. State of Jharkhand & Others [9]

This case was filed against several ministers of the State of Jharkhand along with the Chief Minister for having the possession of unaccountable money. The High Court had requested the Central Government to transfer the case from Enforcement Directorate to CBI by way of power given to it under Section 45 (1A).

It was alleged that the ministers were in possession of hefty amounts of money and though no evidence was found to charge them with money laundering case, a strict investigation was proposed.

The ministers were said to be the owners of property not only in India but abroad as well. Therefore, the court asked for an investigation to determine this wealth was acquired by making use of the official position. It was to be clarified if a white crime has been committed under the Prevention of Corruption Act, 1988 and under the Indian Penal Code, 1860.

The CBI started its investigation under Prevention of Corruption Act, 1988 and the Indian Penal Code, 1860 as the power to carry on investigation under Prevention of Money Laundering Act was only with the Enforcement Directorate, which is of course subjected to the power given to the Central Government under Section 45 (1-A) of the Prevention of Money-laundering act.

Measures to curb white collar crimes

The measures that can be adopted to prevent the commission of white collar crimes are:

  1. The top investigating agencies of the country like the Central Bureau of Investigation, the Enforcement Directorate, the Income-tax Department, The Directorate of Revenue Intelligence and the Customs Department, needs strengthening, by way of implementing strong regulating policies. The Central Vigilance Commission should monitor the working of the officials sitting at top positions and also cross-check their works, so as to ensure transparency in the system.
  2. As the method of commission of such white collar crimes is advancing, so should the training of the investigating officials. It often happens that ageing officers are well experienced to understand the nature and techniques, but are not able to utilise the technology for tracking the suspect. This happens due to lack of training. So, every investigating officer must be trained in such a manner that, no matter how complicated the case is, they would be able to easily resolve it.
  3. To uproot the existence of such crimes, it is very important to include strict laws into the system. Less amount of fine and shorter period of imprisonment makes it very casual for the offenders to commit such crimes. 
  4. Fast track courts and tribunals should be set in all the parts of the country for the early disposal of these cases. The tribunal should be provided with the power to fine or imprison someone who has been held guilty. Such measures would lower the rates of occurrence of white collar crimes.
  5. The electronic and print media should be utilized in the right way to spread awareness about white collar crimes. The general people need to be aware of such crimes and that they are taking place everywhere, from a small cafe to big multinational companies. Also, they need to be aware of the remedies they could seek in case they become victim to such crimes.
  6. Stringent laws and hefty fine and long term imprisonment should be given to the offenders for committing such crimes. And for this to happen, the Indian Penal Code, 1860 should be amended and include provisions for the white collar crimes. For example, the IPC could have a separate chapter dealing with white collar crimes.
  7. The government may establish a separate body which would look into the matter of crimes and criminality prevailing in the country. The independent body could be named as the National Crime Commission. Since their entire work would be related only to the crimes and would be an independent body, it could work more efficiently towards reducing criminality in the country.

Conclusion

white collar crimes have two surprising features, first, that they are non-violent crimes, though the criminals have the tendency to gain control or have a sense of entitlement, and, second, that they are committed by people in the higher profession.

However, these crimes are also committed by poorly paid underlings, although the mastermind behind the commission of such crime could be a rich person enjoying a higher social status in his occupation. white collar crimes are often committed because of peer pressure or are dependent on the culture of the company.

As our society is growing towards modernity and the world is experiencing new technological advancement, the rate of crime is also increasing at a faster rate. Particularly the growth in white collar crimes has been enormous. From the medical profession to educational institutions, these crimes are being committed everywhere.

The cases of online fraud are also increasing at an alarming rate. India, as a developing nation, has faced difficulties in leading its economy towards growth because of these crimes in general and corruption in particular. 

The investigating officials are in need of training where they could acquire the skill to trace these criminals, otherwise tracking of whom is  difficult, complicated and tiresome job. The investigating officials’s work should be scrutinized to ensure transparency in the work as the white collar crimes are committed by people enjoying higher social status in their occupation.

The government must make laws that are strict enough to reduce the commission of such crimes. And the system should be such that not only there exist laws giving strict punishment to the accused but also dispose off maximum cases in a short while. If not done so then people will soon lose complete faith in the system, as these crimes are committed by people who should act as a role model for the society. 

The media has a key role to play in reducing the rate of increasing white collar crimes. It has been noted that most of the white collar crimes go unreported. So, if the media becomes more active towards publishing frauds and scams at higher levels and revealing how do the people at higher position in a company use their powers arbitrarily, and also make efforts in making people aware about the white collar crimes, and avoid corrupt practices, then this would definitely help in reducing the rate at which the white collar crimes are being committed.

References

    1. https://shodhganga.inflibnet.ac.in/bitstream/10603/43935/8/08_chapter%202.pdf
    2. Para 4; A.I.R. 1987 SC 1321
    3. 1964 A.I.R. 295 SCR (4) 224
    4. Anosh Ekka v. Central Bureau of Investigation
    5. Arun Kumar Mishra v. Directorate of Enforcement 
    6. People v. Fort , 138 Mich. App. 322 (Mich. Ct. App. 1984)
    7. SEBI v. Burman Plantation and Others, (2013) 
    8. Abhay Singh Chautala v. C.B.I., (2011) 
    9. Binod Kumar v. State of Jharkhand and Others, (2011) 
    10. D.K. Gandhi v. M. Mathias, 6th August, 2007 
    11. Jacob Mathew v. State of Punjab, (2005) 6 SCC 1 (para 18) 
    12. Galaxy Nirmaan Pvt. Ltd. v. Acit, new Delhi, 19th May, 2017
    13. Emperor v. Kanayalal Mohanlal Gujar, (1939) 41 BOMLR 977 

 

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All about Payment Banks

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This article is written by Soma-mohanty of KIIT School of Law, Bhubaneswar. In this article she has mentioned about the establishment of Payment Banks, how it has helped economically backward people, about the advantages and objectives of the Payments Bank and the list of Payments Bank working in India so that people can access them easily. 

 Payment Banks

The concepts of payment banks are brought forward by the Reserve Bank of India. This concept was brought forward by the Committee on Comprehensive Financial Services for Small Business and Low Income Households. Then the Reserve Bank of India framed the guidelines for the payments of the bank.

The notice for the application was given and after the submission of the list of all 41 applicants who had applied, the list was published after which an external advisory committee was set up to look into the licence application and to make the evaluation. Consequently, 11 entities out of 41 applicants were selected and were given “in-principle” licence. This licence had the validity of 18 months and within the period the entities had to fulfil all the requirements and failure would be led to lapse of licence.

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What is payment banks?

Payment bank is a type of bank which is not involved in any type of credit risk. This type of banks provides credit to smaller units such as Low-income household, migrant labour workforce, small business units and unorganized sectors. It has no provision of issuing credit cards or advance loans to the customers. 

The services provided by the payments bank are as follows.

  1. Remittance service
  2. Automated Teller Machine Service
  3. Debit cards for money transaction
  4. Net banking service
  5. Bill payments service
  6. Mobile banking service
  7. Third-party fund transfer

The objective of payment banks

The main objectives of the payment banks are to provide financial inclusion to the following sections.

  1. Low-income household
  2. Migrant labour workforce
  3. Small business
  4. Unorganized sector

It aims to provide saving accounts to those who are not able to create a savings account as they are afraid to pay heavy maintenance.

Importance of payment banks

Aid to the poor in India

  • Earlier days poor people used to face a lot of problems in the matter of money transactions. We have seen that most of the poor people leave their village and settle in towns to earn money. The people belonging to this migrating class face hurdles in sending money to their families back in the village.
  • Thus the payment bank provides them with a saving account, which can be opened by them easily and it has tie-ups with commercial banks which provide ATM. Thus making money transfer easy and smooth for poor people.
  • Earlier maintaining a savings account used to cost a lot and if the person fails to maintain the mentioned amount, they are fined. Thus poor people were not able to open a savings account.
  • But payment banks provided scope for the poor to save their hard-earned money.
  • Payment banks provide a higher rate of interest than other commercial banks. Thus it increases the amount of savings.
Banks
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Alternative of traditional banks

  • Rural areas have always been neglected and thus the people of rural areas face a lot of problems. Village people need to travel to cities to get their money transactions done. This is because traditional banks do not open branches in small villages.
  • Opening a traditional bank in every part of India puts an effect on the economy, thus it is not possible to open more branches in areas with less population. But it is not mandatory for the payments bank to open branches in every part as they can operate through mobile phones.
  • The people just need to complete their KYC and link their Aadhaar card to their number and they can easily send and accept money in their account through online transfer.
  • Payments bank provide interest on small amounts even, thus it increases the savings.
payment banks meaning
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Guidelines for licencing of payment banks

Following are the guidelines for licencing of payment banks.

Scope of activities

  • The payments bank are allowed to accept demand deposits which include current deposit as well as saving bank deposits. This deposits can be done by the small business unit, individual, and other organisation who are eligible. The Deposit Insurance and Credit Guarantee Corporation of India (DICGC) scheme permits the payments bank to get the deposits covered under this deposit insurance scheme.
  • Though the payments bank are provided to carry on payments and remittance services and demand deposit products to small businesses and low-income households, a maximum limit is put forward. Every customer is entitled to deposit a maximum of Rs. 1,00,000.  The Reserve Bank of India has the authority to increase the maximum limit but it depends on the performance of the banks.
  • The payments and remittance services are performed by the payments bank by Automated Teller Machines (ATMs), Business Correspondents (BCs) and mobile internet banking. When funds are accepted through payments or remittance service at one endpoint, it can be done through Business Correspondent, branches and various channels. And payments at the other end can be done through Automated Teller Machines (ATMs), Business Correspondents (BCs). if the instruction is issued under the PSS Act, then cash-out at Point-of-sale terminal is allowed.  The payments bank has been authorised by the PSS Act to be the part of any network regarding card payment.
  • Payment banks do not have the authority to issue credit cards but they have the right to distribute ATM as well as Debit Card.
  • The payments bank are provided with the right to provide internet banking service to the customers. The objective behind the setting up of the payments bank is to provide well skilled and developed technology to lessen the cost of banking solution. While offering internet banking service the payments bank should ensure that the system running consists of business partners, third party service providers and risk management systems and control management. The payments bank should run there internet banking service in accordance with the guidelines provided by the Reserve Bank of India in the matter of cyber crime, information security, electronic banking and technology risk management.
  • The payments bank has the right to choose any bank of its choice to establish a Business Correspondent relationship with. But this relationship should be established according to the provisions of Business Correspondent laid down by the Reserve Bank of India.
  • All the transactions regarding the remittance or settlement can be done by payments bank. The payments bank has the authority to accept the remittance that is to be sent and receive remittance from multiple banks. But these transactions should be done by the approval of the Reserve Bank of India through authorised payment method such as RTGS, NEFT, IMPS.
  • Payments bank are permitted to undergo cross border settlement transaction and its transactions can be made by personal payments as well as settlement through the current account. The Reserve Bank of India has the right to allow the payments bank to undertake foreign exchange transactions.
  • Payment banks after fulfilling the requirement of the provision mentioned in the sectoral regulators of products with the permission of the Reserve Bank of India can be granted to undertake non-risk sharing simple financial services.
  • There is a provision of bill payments of the customer provided by the payments bank. The payments bank complete the utility bill payment, etc.
  • If the promoter is involved in any financial or non-financial activity, then the activity should be performed differently. There should be no association of the financial and non-financial service activity with the services of payments bank such as banking as well as financial services.
  • The payments bank should be differentiated from all other banks. Thus, it is mandatory for the payments bank to add “Payments Bank” to their name.

Deployment of funds

  • The payments bank are not authorised to get involved in lending activities. Its is mandatory for the payments bank to maintain Cash Reserve Ratio (CRR) with the Reserve Bank of India. The payments bank has to invest at least 75% of its demand deposit balance in the Government security or Treasury Bills and it should have the maturity up to one year with the eligibility security maintenance of Statutory Liquidity Ratio and for the purpose of liquidity management as well as operational functions it should be having 25% in current or fixed deposit in association with other scheduled commercial banks.
  • When the payments bank issues the balance outstanding under PPIs, there should be flexible investment between Statutory Liquidity Ratio of eligible Government securities or Treasury Bills and bank deposit, so that it is done with compliance to CRR AND SLR on its “overall outside demand and time liabilities” including its deposit balances and outstanding balances in PPIs issued.
  • It is essential for the payment banks to manage their liquidity, so it is required for them to get involved in the payment and settlement system which enables them to get access to the inter-bank uncollateralised call money and the collateralized repo and CBLO market.

Capital requirement

  • The payment banks are more subjected to operational risk than to credit as well as market risk. For the operation, payment banks are required to invest in technological infrastructure and to get a shield against the operational risk the payment bank requires capital. A minimum amount has been fixed for equity capital of the payment bank. It is mandatory for the payment banks to maintain a minimum capital adequacy ratio which is 15% of its risk-weighted assets, uniformly and the ratio can be changed according to the rules of the Reserve Bank of India.

 

 

Tier capital

Percentage 

1.

Tier I capital

7.5% of risk weighted assets

2.

Tier II capital

100% of total Tier I capital

 

  • As the payments bank will not have significant risk-weighted assets, its compliance with a minimum capital adequacy ratio of 15 per cent would not reflect the true risk. Therefore, as a backstop measure, the payments bank should have a leverage ratio of not less than 3 per cent, i.e., its outside liabilities should not exceed 33.33 times its net worth (paid-up capital and reserves).
  • But the capital adequacy ratio of the payment banks would be computed under the Basel Committee’s standardised approaches as they are not permitted to deal with sophisticated products.

Foreign shareholding

  • The total paid-up capital should be below 10% and aggregate limit should not exceed 24% of the total paid-up capital in the matter of Foreign Institutional Investors (FIIs) / Foreign Portfolio Investors (FPIs), individual FII / FPI holding. But if the Board of Directors passes a resolution followed by the special resolution to that effect by its General Body, then the total paid-up capital can be increased by 49% by the bank.
  • In payment banks, the foreign shareholdings are processed and regulated according to the amendments and rules of Foreign Direct Investment policy. The policy laid down by Foreign Direct Investment policy for private sector banks is the same as for the payment of banks even. 
  • According to the existing regulation of Foreign Direct Investment policy, 74% of the paid-up capital from foreign investment is allowed in both the private sectors as well as the payment of banks.
  • Out of the 74% of the paid-up capital invested, 26% of capital should be held by the residents.
  • The individual holding in the matter of Non-resident Indian (NRI) is hindered to 5% of total paid-up capital on both repatriations as well as non-repatriation basis.
  • The aggregate limit for Non-resident Indian (NRI) should not exceed more than 10% of total paid-up capital on both repatriations as well as non-repatriation basis.
  • When a special resolution is passed by the banking company in association with the General Body then the Non-resident Indian (NRI) are allowed up to 24% of total paid-up capital on both repatriations as well as non-repatriation basis.

Voting rights

  • A shareholder has the certain right of voting according to the Bank regulation Act,1949, in private sector banks but these rules are not applied to the payment banks.

Prudential norms

  • The prudential norms are regulations of RBI which are not applicable for the payment banks as they do not have the provision to provide loans and provide advances. But the payment banks are open to establishing a robust operational risk management system, which enables them to get exposed to operational risk. The payment banks have more possibility to liquidity risk but if they work according to the provisions of RBI’s liquidity risk management, their application would be extended.

Promoters’ contribution

There is no provision laid down for limiting the shareholdings of promoters. But in case of the promoters of the payment bank are entitled to hold at least 40% of its paid-up equity capital for the first five years, which is from the commencement of its business. 

Business plan

  • To get payment banks to licence it is mandatory for applicants to submit their report of business plans as well as projects report attached to the application.
  • It is necessary to mention the strategies for setting up a payment bank, in the business plan.
  • Following are the requirements needed to be present in the business plan
  1. Business model
  2. The access points of the bank in rural and semi-urban areas
  3. Control policy of customer grievance redressal
  4. Joint venture partnership with a scheduled commercial bank
  • The business plans submitted should be transparent.
  • The applicants with business plans aiming to set up access points in the under-banked States/ Districts, North-East, East and Central zone of India would be given more preference.
  • To increase the effectiveness of network access points in remote or rural areas by setting up their ATMs or using another network branch.
  • The main objective of the payment banks should be to lower the costs of setting up networks and to extend the. 

Corporate governance

  • The payment banks have a board consisting of a majority of independent directors.
  • The corporate governance formulates the guidelines for the payment banks. It consists of certain criteria for directors as per the rules of RBI and it is regulated from time to time.

Other conditions

  • BCs, ATMs and other networks are the instruments required to be operated in remote areas by the payment banks. It is not mandatory for the payment banks to open 25% of branches in unbranched rural areas but it is required to operate at least 25% of the physical access point in the rural centres. It is also mandatory to establish a controlling office to look into the running of all the access points, it controls the various outlets in the rural areas and also looks after the customer grievance redressal to satisfy the customers. The operations of the payment banks should be done in accordance with the norms as laid down by the Reserve Bank of India. New innovations are also accepted but the payment banks need to get their plans approved by the Reserve Bank of India and can execute accordingly.
  • The payment banks ought to have an organised and technical Customer Grievances Cell to look into the complaints of the customers. 
  • The payment banks should work according to the provisions provided by the Reserve Bank of India. If they divert from the provisions and do not follow the conditions, then it would lead to cancellation of the licence

Procedure for application

  • The application for the payment banks shall be submitted according to  Rule 11 of the Banking Regulation (Companies) Rules, 1949. In the format of form III of Rule 11 of the Banking Regulation (Companies) Rules, 1949
  • The business plan attached to the application should be according to the paragraph 11 of Rule 11 of the Banking Regulation (Companies) Rules, 1949
  •  Other required information should be provided according to the Annex. 

Procedure for RBI decision

  • The submitted application for the request of setting up a payment bank would be screened by the Reserve Bank of India to check the eligibility of the applicant. The Reserve Bank of India has the right to add up some more criteria according to the “fit and proper” to enhance the development.
  • There is a committee which is formed to evaluate the application for setting up payment banks and the committee is known as the External Advisory Committee (EAC). it consists of skilled professionals like bankers, chartered accountants, finance professionals, etc. 
  • The applicants can be called to give more information required to the External Advisory Committee and it has been vested with the right to get clarification regarding any information provided by the applicant in the application form. Then the External Advisory Committee submits the recommendation to Reserve Bank of India for consideration. And after looking into the matter the  outcome for setting up a payment bank would be given by the Reserve Bank of India and its decision would be final.
  • Then the Reserve Bank of India provides in-principle approval to set up the payment bank with the validity of eighteen months. And if the applicant can’t set up the payment bank within the stipulated time, then it lapses automatically. Thus the applicants are needed to set up the payment bank in the given time.
  • After the Reserve Bank of India issues the in-principal approval to the applicants for setting up the payment bank and it is seen that the promotors or the companies/entities are involved with 
  • The names of the applicants for the licence of payment banks as well as the names of applicants whose application was approved are provided in the website of Reserve Bank of India, to provide transparency.
  • Payment banking is highly investment business thus it is required to put forward a selective basis to get the licence of payment bank and those criteria are
  1. An applicant who fits in the given requirement
  2. Applicant having faultless record track
  3. Applicant providing organised and efficient customer service

 Small finance banks and payment banks

 

Basis

Small finance banks

Payment banks

Meaning 

Small finance banks are niche category banks that provide banking service of accepting and depositing of money for the section of people who are not eligible for.

Payment bank is a type of bank which is not involved in any type of credit risk. This type of banks provides credit to smaller units such as Low-income household, migrant labour workforce, small business units and unorganized sectors. It has no provision of issuing credit cards or advance loans to the customers. 

Scope of activities

  • Small finance banks accept the deposits and lend money to small business units, farmers with marginal earning, small business earning unit and unorganised sectors.
  • There are no restrictions provided in the field of operations of the small finance banks.
  • The payments bank can issue ATMs or Debit cards.
  • The payments bank can’t issue credit card
  • The payments bank provides channels for payments as well as remittance service through Automated Teller Machines (ATMs), Business Correspondents (BCs).
  • The payments bank provides internet banking service to the customers.

Facilities provided

  • Small finance banks can provide forex to their customers
  • Small finance banks have provision to sell mutual funds, insurance and pensions.
  • Small finance banks are not restricted to convert themselves into a full-fledged bank.
  • Payment banks provide internet banking service for customers.
  • Payment banks provide mobile banking services.
  • Payment banks provide forex at minimal charges as compared to other banks.
  • The customers can proceed their bill payments through payment banks.

Facilities excluded

  • Small finance banks can’t provide a large sum of loan to their customers.
  • Small finance banks do not have the provision to indicate the shares available to be sold or bought by general investing of public.
  • Small finance banks cannot deal with equity flow, number of folios, etc.
  • Payment banks do not have the right to provide credit cards to their customers.
  • Payment banks have the provision for extension of loans.
  • Payment banks accept the deposit of NRI.

Eligible promoters

  • Resident individuals or professionals having banking and finance experience of 10years
  • Non-banking Finance Companies (NBFCs)
  • Micro Finance Institution (MFIs)
  • Local Areas Banks (LABs)
  • Non-banking Finance Companies (NBFCs)
  • Corporate houses
  • Telecom companies
  • Business correspondents

Examples 

  • Equitas Small Finance Bank
  • Utkarsh Small Finance Bank
  • ESAF Small Finance Bank
  • Capital Lab Small Finance Bank
  • Fincare Small Finance Bank
  • Suryoday Small Finance Bank
  • Janalakshmi Small Finance Bank
  • Ujjivan Small Finance Bank
  • A U Small Finance Bank
  • Aditya Birla Payments Bank
  • Airtel Payments Bank
  • Paytm Payments Bank
  • Fino Payments Bank
  • India Post Payments Bank
  • NSDL Payments Bank

Best payment banks in India

Best payment banks in India in 2019

 

RANK

PAYMENT BANKS NAME

1.

Aditya Birla Payment Bank

2.

Paytm Payment Bank

3.

Airtel Payments Bank

4.

India Payments Bank

5.

Jio Payment Bank

6.

NSDL Payments Bank

7.

Vodafone m-Pesa Payments Bank

8.

Fino Payment Bank

Payment bank list in India

There was an application of 41 organisations to get the approval for provisional payments bank but Reserve Bank of India approved only 11 out of the 41 applicants. The lists of the approved applicants are as follows.

 

Sl. no

List 

1.

Aditya Birla Nuvo Limited

2.

Airtel M

3.

Cholamandalam Distribution Services Limited

4.

India Department of Posts

5.

Fino PayTech Limited

6.

National Securities Depository Limited

7.

Reliance Industries Limited

8.

Shri Dilip Shantilal Shanghvi

9.

Paytm Payments Bank Limited

10.

Tech Mahindra Limited

11.

Vodafone m-Pesa Limited

 

List of active payment banks

 

Sl no.

List of active banks

1.

Aditya Birla Payment Bank

2.

Airtel Payment Bank

3.

Indian Post Payment Bank

4.

Fino Payment Bank

5.

Jio Paytm Payment Bank

6.

Paytm Payment Bank

7.

NSDL Payment Bank

Latest payment banks in India

Out of 41 applicants, only 11 entities were given the licence for the payments bank in India. But out of the 11 entities, only 4 of them are functional till date and rest 7 payments bank are not functioning anymore.

List of those 4 payments bank functioning is as follows:

  1. Airtel Payments Bank
  2. India Post Payments Bank
  3. Fino Payments Bank
  4. Paytm Payments Bank

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Guarantee Contract

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This article is written by Soma Mohanty of KIIT School of Law, Bhubaneswar. In this article she has mentioned about the essentials, conditions,revocation process in the guarantee contract.

Contract of Guarantee

  • A “contract of guarantee” in Section 126 of Indian Contract Act, 1872  is defined as a contract, in which a person promises to perform an act or discharge the liability of a third person in case of his default.
  • Contract of guarantee involves three parties.
  1. Surety
  2. Principal Debtor
  3. Creditor 
  • The guarantee may be in written form or oral form.

Surety

  • A person who gives a guarantee in a contract is called surety according to Section 126 of the Indian Contract Act, 1872.
  • The surety is the person who is responsible to pay when the person.
  • Example:  “A” takes a loan from “B”, and “C” promises to pay back the amount if “A” fails to pay it on time. In this case, “C” is said to be a surety.

Principal Debtor

  • A person for whom the guarantee to pay back the amount on his default is given in a contract of guarantee is said to be the principal debtor according to Section 126 of the Indian Contract Act, 1872.
  • Example:  “A” takes a loan from “B”, and “C” promises to pay back the amount if “A” fails to pay it on time. In this case, “A” is said to be the principal debtor.

Creditor

  • The creditor is the person to whom the guarantee is given by the surety to pay the amount back on default of the principal debtor according to Section 126 of the Indian Contract Act, 1872.
  • Example:  “A” takes a loan from “B”, and “C” promises to pay back the amount if “A” fails to pay it on time. In this case, “B” is said to be the creditor.

Contract of Indemnity

  • According to Section 124 of the Indian Contract Act, 1872, when a party contracts with the other party and promises to bear the loss suffered by the other party, while executing the duty.
  • Example:  “A” enters into a contract with “B”. “A” promises to indemnify “B” if it enters into a deal with “C”. Then “B” entered into a deal with “C” and suffered loss. In this case, “A” is liable to pay for the loss suffered by “B”.

Essentials

  • There should be a valid contract.
  • The loss should be suffered by the indemnity holder.
  • The loss suffered should be the consequence of the conduct of the indemnifier.

Differentiation between contract of indemnity and contract of guarantee

Contract of Indemnity

Contract of Guarantee

In this type of contract, one party promises the other party to pay for the losses suffered to him due to the conduct of the promisor or another person.

In this type of contract, one party promises the other party to be liable for the default of a third party.

Two parties are involved in this contract.

  1. Indemnifier
  2. Indemnity holder 

Three parties are involved in this contract:

  1. Surety
  2. Principal debtor
  3. Creditor 

The promisor is the person who is primarily liable.

In this case, the principal debtor is primarily liable and the surety is secondarily liable.

The promisee is to be liable for loss suffered.

The promisee is to be liable in the case of default.

There is only one agreement existing between the indemnifier and indemnity holder.

There exist three agreements;

  1. Between surety and principal debtor.
  2. Between surety and creditor.
  3. Between creditor and principal debtor.

Surety’s Liability

  • Surety’s liability is coextensive to the liability of debtors according to the Section 128 of the Indian Contract Act, 1872 
  • Example – “B” the principal debtor is not paying back the sum of money borrowed and also the interest to  “c” who is the creditor. In this case, “A” who is the surety would be liable to pay on the default of “B”. 
  • In the above illustration, the surety has the right to recover the sum of money from the debtor.
  • The surety has the right to limited liability.
  • Example – “B” has taken a loan of amount rs 20,000 form “C”. Here “A” who is the surety, state that he would be liable on default of Rs 10,000. So in this case, “A” acted to be the surety for the limited amount as stated.
  • Surety’s liability towards the creditor comes to play as soon as the debtor is found in the state of default.
  • If the contract between the creditor and the debtor is found to be void then the surety would be considered to be primarily liable.
  • Example – “B” is a minor who enters into the contract. “B” took a loan of a certain amount from “C”. in this case, “A” who is the surety would be primarily liable as he has given a guarantee to the contract.

Kinds of Guarantees

There are two types of Guarantee:

Specific Guarantee

Continuing Guarantee

When a guarantee is given only for a specific/ particular transaction is called a specific guarantee.

When a guarantee is given on a series of the transaction then it is called continuing transaction.

Example 

“A” guarantees the payment to be made by “B” to “C”, on the transfer of goods for july month. After the end of the july month, “C”  again send goods to “B”. in this case “A” would be liable for the default by “B” incurred in the month of july only.

Example 

“A” guarantees payment to “B”, for selling pens of Rs.1000 at the end of every month to “C”. so “B” started supplying pens to “C” on payment at Rs. 1000. But after somedays “B” started supplying the pens at Rs. 2000 to “C”. it was seen that “C” was not able to pay for it. In this case, “A” would be liable for the payment of Rs. 1000 as per the contract.

Revocation of Guarantee

In the case of a continuing guarantee, revocation can be made under certain circumstances.

  1. According to Section 130 Indian Contract Act, 1872, a continuing guarantee can be revoked any time but there should be a notice given to the creditor by the surety.
  • Illustration: “A” guarantees payment of Rs. 10000 to “B” on purchase of coal to be made by “C”. Then “B” supplied the coal of Rs. 5000 to “C”, “A” gives a notice to “B” coal dealer not to supply coals to “B” further. In this case, A is liable for the payment of supply of coal worth Rs. 5000. But “A” won’t be liable for any further supply made after the notice of revocation.
  1. According to Section 131 Indian Contract Act, 1872, revocation of continuing contract takes place on the death of the surety. There is no requirement of notice under these circumstances.

Discharge of a surety

Sections 

Provision 

Section 130

Revocation by notice.

Section 131

Revocation on surety’s death.

Section 133

A surety can be discharged when there is variation in the contract between the debtor and creditor, and he was not made aware of it.

Section 134

A surety can be discharged, when the debtor is discharged by the creditor.

Section 135

  • A surety can be discharged, when a debtor enters into a contract with the creditor without the consent of the surety.
  • When the contract is to extend the time for the debtor to pay a debt or a promise not to sue the debtor.

Section 136

A surety can be discharged, when the creditor enters into a contract to extend the time for payment of the debt by the principal debtor with a third party.

Section 137

A surety can be discharged, when the creditor fails to take any legal action on the principal debtor against the default.

Section 139

When a creditor omits to do an act, which infringes his duty towards the surety, then surety would be discharged.

Section 140

When a surety pays the default amount of the debtor, he is liable to get all the securities of the debtor that the creditor has against the debt.

Section 141

Surety has the right to get benefit from the creditor’s securities.

What is the Contract of Guaranteee?

  • A “contract of guarantee” in Section 126 of the Indian Contract Act, 1872  is defined as a contract, in which a person promises to perform an act or discharge the liability of a third person in case of his default.
  • There are three parties in Contract of Guarantee:
  1. Surety 
  2. Principal debtor
  3. Creditor 
  • There are two kinds of guarantee:
  1. Specific guarantee
  2. Continuing guarantee

Essentials of a Contract of Guarantee

  • There should be an agreement between all the parties in the contract. i.e,
  1. Between surety and principal debtor.
  2. Between surety and creditor.
  3. Between creditor and principal debtor.
  • In this, the principal debtor is primarily liable and surety is secondarily liable.
  • The contract made can be in written or oral form.
  • It should be a valid contract with free consent.
  • The creditor should not hide any facts that would affect the surety’s liability.
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Period of Limitation

  • The  limitation period for enforcing a guarantee is 3 years from the date of issue of the letter of guarantee.

Rights of a Surety

Against the Creditor

  • According to Section 141 of the Indian Contract Act, 1872, the surety has the right over the security of the debtor, which was kept in the form of security by the creditor against the debt.
  • Exception: Even if the surety is not aware of the security which the creditors have kept, he would be liable to get it after the discharge of his obligation.

Against the Principal Debtor

  • According to Section 140 of the Indian Contract Act, 1872, when a surety discharges his obligation towards the creditor on default, then the principal debtor is liable to pay the amount back to the surety. Thus he holds the status of the creditor in this case. This is known as the right of subrogation.
  • According to Section 145 of the Indian Contract Act, 1872, the principal debtor promises to indemnify the surety. In this situation, the surety has the right to recover the sum of money he has paid under the guarantee.

Against co-sureties

  • When a surety discharges his obligation towards the creditor and pays more on behalf of co-sureties then, he would be liable for the payment of extra sum from the co-sureties.

Rights of a Surety

  • Surety’s liability is coextensive to that of the debtor’s liability. It means that in the case of default of the debtor, the degree of liability of the debtor towards the creditor is the same as the liability of surety towards the creditor.
  • Example – When “B” borrowed money from “C”, with “A” as the surety, then it was found that “B” was in default. In this case, “A” is bound to pay for the principal amount as well as the interest to be paid.

Short Notes on Continuing Guarantee

  • Continuing guarantee under Section 129 of the Indian Contract Act, 1872, is defined as a guarantee which is given on a series of transactions.
  • Illustration – “A” guarantees payment to “B”, for selling pens of Rs.1000 at the end of every month to “C”. so “B” started supplying pens to “C” on payment at Rs. 1000. But after somedays “B” started supplying the pens at Rs. 2000 to “C”. it was seen that “C” was not able to pay for it. In this case, “A” would be liable for the payment of Rs. 1000 as per the contract.

Features of continuing guarantee 

  • The guarantee must be ancillary and subsidiary.
  • A contract of guarantee is not one uberrimae fidei (insurance contracts) but a contract of strictissima (strictest letter of the law).
  • The continuing guarantee can be revoked under certain circumstances.

Revocation of Continuing Guarantee

Revocation by Notice

  • According to Section 130 Indian Contract Act, 1872, a continuing guarantee can be revoked any time but there should be a notice to the creditor by the surety.
  • Illustration: “A” guarantees payment of Rs. 10000 to “B” on purchase of coal to be made by “C”. Then “B” supplied the coal of Rs. 5000 to “C”, “A” gives a notice to “B” coal dealer not to supply coals to “B” further. In this case, A is liable for the payment of supply of coal worth Rs. 5000. But “A” won’t be liable for any further supply made after the notice of revocation.

Death

According to Section 131 Indian Contract Act, 1872, revocation of continuing contract takes place on the death of the surety. There is no requirement of notice under these circumstances.

    

 

 

    

 

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Delegated legislation in India

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This article is written by Amanat Raza, a student of faculty of law, Aligarh Muslim University. In this article article, he has discussed the concept of delegated legislation, What are its advantages, types and reasons for its growth.

Introduction

In the realm of legal theory, delegated legislation is one of the most debatable issues because of its various implications. Indian democracy is said to rest on the acclaimed four pillars and these are the legislature, the executive, the judiciary, and the press. These pillars are empowered by the constitution not to interfere in the matters of others. As per the Constitution, the legislative has legislative powers and the Executive has the power to execute the laws. Similarly, the Judiciary has the power to resolve dispute and to met out justice. But we have to keep in mind that there are multifarious functions that have to be performed by the Legislature in welfare states and it is not an easy task for the legislature to look after every matter.

In contrast to this increasing legislative activity, the legislatures are not able to find adequate time to legislate on every minute detail. They have limited themselves to policy matters and have left a large volume of area to the Executive to make rules to carry out the purposes of the Legislature. In such types of situation, the system of delegated legislation comes to our mind. Therefore, the need for delegation is necessary and is sought to be justified on the ground of flexibility, adaptability and speed. This delegation is also known as ‘secondary legislation’ or ‘subordinate legislation’. The Act that gives the executive the power to legislate is called the ‘Enabling Statute’ or ‘Parent Act’. The standard of rule of the majority has made authoritative controls inadequate. The term delegated legislation is hard to characterize. 

Meaning of delegated legislation

Delegation’ has been defined by Black’s Law Dictionary as an act of entrusting a person with the power or empowering him to act on behalf of that person who has given him that power or to act as his agent or representative. Delegated legislation’ means exercising of legislative power by an agent who is lower in rank to the Legislature, or who is subordinate to the Legislature. Delegated legislation, additionally alluded to as an auxiliary legislation, is an enactment made by an individual or body other than Parliament. Parliament, through an Act of Parliament, can allow someone else or some body to make enactment. An Act of Parliament makes the system of a specific or particular law and tends to contain an outline of the purpose for the Act. By delegating the legislation by Parliament to the Executive or any subordinate, it empowers different people or bodies to integrate more details to an Act of Parliament. Parliament along these lines, through essential enactment (for example an Act of Parliament), licenses others to make laws and guidelines through delegated legislation. The enactment made by authorize person must be made as per the reason set down in the Act of Parliament.

According to Sir John Salmond, “Subordinate legislation is that which proceeds from any authority other than the sovereign power.

Justice P.B Mukherjee also observed about delegated legislation that it was an expression which covered a multitude of confusion. He viewed it as an excuse for the Legislature, a shield for Executors and a provocation to the Constitutional Jurist.

According to M.P Jain, this term can be used in two senses:[1]

  • Exercise by subordinate agency or agency that is lower in rank to legislature delegated to it by the Legislature.
  • The Subsidiary rules made by the Subordinate Authority in the execution of the power bestowed on it by the Legislature.

Delegated legislation is, referred to as Subordinate, Ancillary, Administrative legislation, and Quasi-Legislation.

History of delegated legislation in India

The historical backdrop of the delegation of power can be followed from the Charter Act of 1833 when the East India Company was recapturing political impact in India. The Charter Act of 1833 vested the administrative powers only in the hands of the Governor-General-in Council, which was an official body. He was enabled to make laws and guidelines for revoking, correcting or modifying any laws or guidelines, which were for all people regardless of their nationality. In 1935 the Government of India Ac, 1935 was passed which contained a serious plan of delegation. The report of the Committee of Ministers’ Powers was submitted and affirmed which completely settled the case for assignment of forces and appointment of enactment that was viewed as inescapable in India.

However, our Constitution depended on the separation of power; a total partition of forces was unrealistic henceforth it kept up the holiness of the tenet in the cutting edge sense. The Indian Constitution does not deny the assignment of forces. Then again there are a few arrangements where the official had been conceded with the administrative forces. For instance, the administrative forces of the President under the Indian Constitution are prominent. The problem of the delegation of legislation in India originated under the British rule when the controversy on the problem in the West was in full swing. In independent India, the conflict of settling the problem of the delegation of legislative power was prima facie to a conflict between the English and American type of solution.

The Constitution of India comprises of more than four hundred Articles and it had not been surprised if the Constitution makers include some solution for it. But why these provisions were incorporated in the Constitution? This is because the politicians in the Constituent Assembly tended to multiply legal formulations. These issues were of minor importance on which legal formulation was made in comparison to other greater constitutional issues that were by-passed by the Assembly that were left to future accord or judicial interpretation. In the case of Queen v. Burah[2], nature and extent of Legislature power and the feasibility of its delegation was considered by the Privy Council. The Privy Council, in this case, held that Councils of Governor-General was supreme Legislature and has ample number of powers and who are entitled to transfer certain powers to provincial executors. At the time of passing of New Delhi Act of 1912, the Privy Council accepted the transfer of Legislature power to the Executive. 

Delegated legislation under the Constitution of India

Although the concept of delegated legislation was not mentioned specifically in the Indian Constitution it can be understood by interpreting Article 312 of the given Constitution. This Article gives right to the Rajya Sabha to open a new branch of All India Service with a majority of two-thirds majority vote. This means that some powers of legislation will be delegated to the new recruiter of All India Service. There are many cases through which delegated legislation under the constitution of India can be understood. These are:

D.S. Grewal v.The State of Punjab [3]

Facts: This case questions the constitutionality of All India Service Act, 1951. The appellant was appointed to All India Service and posted to the State of Punjab. He held the charge of Superintendent of Police in various districts but was reverted or return to the post of Assistant Superintendent of Police in August 1957 and was posted to Dharamsala in March in the year 1958. In the same month, he was informed that an action has been taken against him under Rule 5 of the All India Services (Discipline and Appeal) Rules, 1955. An enquiry committee was set up against him under the leadership of Shri K. L. Bhudiraja. He then immediately made an application under Article 226 of the Indian Constitution before the Punjab High Court challenging the constitutionality of the Act and legality of the enquiry against him. Six contentions were made by the appellant lawyer.

Judgment: K.N. Wanchu, Justice of the Supreme Court at that time, dealing with the power of delegated legislation under Article 312 of the Indian Constitution. As the case has been very serious the appellant can be removed or compulsorily dismissed from the post by the Central Government and therefore Central Government has instituted enquiry against him. There is nothing mentioned in Article 312 of the Indian Constitution that takes away the power of delegation.

  • The delegation power of India and America is that the Congress doesn’t have much power of delegation but it is different from the English in which the parliament is supreme has an excess of delegating power.

Panama Refining Co. v. Rayan[4]

Facts: Section 9(c) of the National Industrial Recovery Act, 1933 authorizes the President of the United States with some powers under which he can make any order and violation of that order may lead to panel provision. The President issued the prohibition made by the above act through the executive and authorized the Security of Interior to exercise all the powers vested in the President under section 9(c) of the Act. The Security of Interior issued a regulation to accomplish the President’s order(s). The Section mentioned above was challenged on the ground that it was an unconstitutional delegation of legislative power by the Congress.

Judgment: It was held by the Supreme Court of the United States that delegation of legislative power given by President is void. The court held that Congress can delegate power to the Executive only on  two conditions. Firstly, the Statute laid down these policies. Secondly, one has to establish the standards and give the administration the power of making the subordinate rule within the given limit.

Sikkim v. Surendra Sharma[5]

Facts: After Sikkim became the State of the Union Of India, the Directorate of Survey and Settlement of Government of Sikkim created and advertised for certain temporary posts. Like other people, the respondent has also applied for the post. They got selected and were appointed in different capacities. After the survey work got completed some of the employees got terminated from the job. In 1982, some of the employees, who were ‘not locals’, filed a writ petition in the High Court of Sikkim challenging the decision of the Government asking why it has fired the employees from the service on the ground that they were not locals.

Judgment: The judge held that the termination of the employees solely on the ground that he is not local is impermissible under Article 14 and 16 of the Indian Constitution. It was held that all rules and legislations created under the power which is granted under sub-clause (k) of the Article 371F constituted subordinate legislation. This article was added to the Constitution through the 36th Constitutional Amendment.

Types of Delegated Legislation

Delegated legislation means giving power or authority to someone lower than his rank to make laws. So there can be many ways in which this excess of power can be given to subsidiary rank people or an Executive. These types are as follows:

  • Orders in Councils: This type of Delegated legislation can be given by Queens or the Privy Councils. This Delegated legislation allows the Parliament to make laws without going through the Parliamentary proceedings. Today, its main use is that it gives legal effect to European directives. When the order issued under the privilege of the Queen or the Crown such order is subject to review by the courts. But order issued by the Parliament may or may not be subject to review by the courts as it is made within the prescribed limits Act of Parliament. In both the case the question can arises that if this legislation is the same as the Executive legislative. The answer to this question is yes, it is equivalent to executive legislative. There is no major difference between these orders and Executive legislative almost they both are same. The meeting of Privy council in such case could simply means a meeting of some Privy Councillors which includes three or four ministers, President, Councils and Clerk of Privy Councils. This shows that this order is issued by the Executive who exercises powers of the Council. 
  • Rules of the Supreme Court and the County Courts: The Parliament by statutes bestow some persons or authority with the power to make laws for a specific purpose. But it is different in England where a Court has been given wide power to make laws. This task of making law has been entrusted upon the Rules Committee of the Supreme Court and the County Courts. Entrusting Judicial branch to control its Procedural law to a great extent has an advantage as it is given to that authority who knows better about it than any person. Procedure and cost that are drawn by Rules Committee of County Courts deals by the County Courts itself. Such rules are not subject to the control of Parliament. When these rules used to come into force? It comes into force when the Lord Chancellors with the consent of the Rules Committee of the Supreme Court confirms it.
  • Departmental or Executive instructions or regulations: When the power of legislature directly delegated to the administration such as a Board, Ministers or a Committee, then the exercise of that given power results in delegation through Departmental or Executional Instructions or Regulations. Sometimes very wide powers are given to the administration or the delegated person. But this wide delegation of legislation is not accepted by the judiciary as it is difficult for them to control administrative action. There is extensive use of this delegated legislation in today’s world. Nowadays only the broad line of making legislation is in the hands of Parliament and the rest power is given to the Administrator. 
  1. Delegated legislation by laws: It can be given in two ways, firstly, it can be given by laws of autonomous bodies, e.g., Corporation and secondly, it can be given by-laws of a local authority.
    • By-laws of autonomous bodies: These autonomous bodies have got the power to pass by-laws on matters affecting them and other people in that locality or people residing in a particular area. For example, they can make laws as public utility authorities for light, water, etc. Usually, these authorities are given the power to make rules for regulating their working. Such by-laws are subject to judicial review. It can be reviewed to check that it must not be ultra vires the Parent Statute. These autonomous bodies have the power to frame rules for themselves. One more example of this autonomous body is an association of Employers. The rules of these association are termed as voluntary but this is not so in reality. It is fictitious as in its effect these rules are binding upon members like other rules such as rules of a professional association, industrial organisation, etc.
  • By-laws of the local authority: Parliament has the power to make new local bodies or it can alter the existing body. It empowers such body with powers to make by-laws for themselves for specific purposes. These authority exercises excess power for public health, safety, and for good rule and governance. These by-laws incur a penalty on its breach.

Reasons for growth of Delegated Legislation

Many factors are responsible for the rapid growth of delegated legislation in today’s time. Because of the radical change in the governance of a country from ‘police state’ to the ‘welfare state’ the function and the need of delegated legislation have increased. These factors and reasons for growth of delegated legislation can be seen as follows:

  • Pressure upon time of Parliament: The area, scope, or horizon of state activities are expanding day by day and it is difficult for the Parliament to make laws on each and every matter as they are having a lot  of work to do and they also have to make legislation on various matters. The Parliament is so much occupied with matters concerning foreign policy and political issues that it has not much time to enact the laws in detail. So it only frames the broad part of the rule and outline of the legislation and gives that legislation to the executive or some of its subordinates to fill the full detail following the necessary rules and regulations. It is like they have given the only skeleton and the subordinate have to fill flesh and blood to the skeleton to make it alive. The committee on Ministers’ Power has observed that if the parliament is not willing to delegate law making power to the subordinate then he will unable to pass the quality of rules and regulations that a person needs to live a happy life or legislation which a modern public requires.[6] 
  • Technicality in the matters: With the progress and advancement in society, things have become more twisted, complicated and technical. So to understand the technicality of each and every topic, legislature needs the expert of that particular topic who is well aware of  each and every detail of that matter. Over the years it has been observed that some legislature only know politics and some might have knowledge about one or two topics. Therefore, after framing policies by the parliament on any topic, that topic is given to the government department or any particular person who knows about the technicalities of that particular topic and given the power to lay down the details.
  • Flexibility: Parliamentary amendment is very slow and it requires a process to make any type of law but by the tool of delegated legislation it can be made expeditiously with the help of the executives, e.g., police regulation, bank rate, import and export, foreign exchange, etc. Also, Parliament cannot foresee the contingency while enacting a law so to make it foresee the workload is being given to the executives. So it is necessary to give work to lower body to have that work in a smooth and better manner. 
  • Emergency: In any type of emergency one should know how to deal with it quickly without any delay. The legislature is not equipped with the skills of providing an urgent solution to meet the situation of emergency. Delegated legislation is the only way to meet that situation. Therefore, in times of emergency and war, an executive is given wide power to deal with that situation. Some examples of delegation in England during the First and Second World War are the Defence of the Realm Act 1914-15, the Emergency Power Act, 1920, etc. Similarly, in the case of inflation, flood, epidemic, economic depression, etc immediate remedial actions are necessary.
  • Experiment: The practise of delegated legislation enables the Executive to experiment. As every work is new for the legislative and he has to experiment that either this law is working in perfect condition or not. This method or approach permits the utilization of experience and implementation of the necessary changes in the application of the provision made by the Parliament. For example, in traffic matters of the road an experiment method can be conducted and in the wake of its application necessary changes can be made in the provisions. The advantages of such a course is that it allows the delegated authority to consult the interest of people at the ground level that what type of law is affecting them and then he makes an experiment by altering the provisions.
  • Complexity of modern administration: Modern administration used to take added responsibilities when it came to upraise the condition of the citizens such as looking after their employment, health, education, regulating trade, etc. Therefore, the complexity in modern administration and expansion of states’ function to the social sphere and economic have allowed the formation of a new form of legislation and to give wide powers to various authorities on various occasions. It is important that an administration should give an excess of power to activate socio-economic policies. In a country like Bangladesh where control over private trade, business or property may be required to be imposed, it is necessary that the administration should hand over the excess amount of power to implement such policy.

Therefore, we can say that there is a rapid growth of this delegated legislation and also it is necessary for a country to run smoothly.

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Constitutionality of delegated legislation

It basically means the limits that are permissible within a Constitution of a country through which Legislature with all his right can delegate its power of rule making to other agencies of administration. The aim of extending the power of the government is to handle socio-economic problem.

  • Position in USA: Delegated legislation is not allowed theoretically in the constitution of the USA because of the two reasons. These are, “Separation of Power” and “Delegatus non potest delegare”. There is no reference of text has been given in the Constitution of the USA which shows that it delegates its power from Legislature to the Executive. Congress was itself a delegatee then how can it delegate its powers. The political theory that was propagated by philosophers like John Locke and Montesquieu were imbued on the framers of the American Constitution. John Locke has said that a legislative cannot delegate his powers of lawmaking to any person or cannot place it anywhere. He further stated that there should be separate Legislature and Executive because if the power of law making and execution of that laws go in one hand it can be misused and these people use that power to exempt them from that law and use it for their private advantage. So the doctrine of ‘delegatus non potest delegare’ has been given by John Locke it means the same as what we have explained above.

Another philosopher, Montesquieu has given the concept of ‘Separation of Powers’. According to Montesquieu, one person cannot exercise all the three powers of the government i.e., the Judiciary, the Legislature, and the Executive. The Legislature should make laws and should not enforce or administer it. Similarly Executive should not interfere in the work of Judiciary and Legislature and Judiciary should be free from Executive and Legislature. All should do their work separately. In America, the power to make legislation has been given to the Congress, executive powers given to the President of the USA, and the judiciary power of the United States is vested in the hands of Supreme Court and also it might be given to lower court from time to time on the ordain of the Congress.

Due to the adoption of separation of power by the United States, the legislative power can be vested only in the hand of Congress and no organs of the government. Further, it has argued that the power to the Congress itself has been delegated by the American Constitution so it cannot further delegate its power. In case of Field v. Clarke,[7] it has been observed by the Supreme Court of America that the power entrusted to one department should only be exercised by that department without interfering in the power or area of another person. But in some other cases of Supreme Court of America, it was observed that in non-legislative power such as rule-making power or quasi-legislative powers can be delegated by Legislature to the Executive. In Wagman v. Southard,[8] Chief Justice Marshall observed that the line has been not drawn between those subjects which were important and, therefore, regulated by the Legislature itself and those subjects of lower interest which were given to the Executive for filling the details in the structure of that legislation.

So to conclude about the delegated legislation in America it can be said that it has not been accepted in principle but in practice, the Legislature has entrusted the power of law-making to the Executive.

  • Position in England: The doctrine of parliamentary sovereignty is the core element of the UK Constitution. In England the Parliament is supreme and there is no limitation by the Constitution on the Parliament. Also, Parliament in England has wide powers of delegating its legislative power to the Executive or other subordinate bodies. Committee on Ministers’ Powers also refers to as Donoughmore Committee released a report in which a famous lawyer of England, Sir Cecil Carr has quoted about three parts of legislation. These are as follows:
  • The first and the very smallest part is made by the Crown under her prerogative powers.
  • The second and the weightiest part is made by the King in the Parliament and it consists of Acts of Parliament.
  • The third and the bulkiest part is made by such body whom the King entrust the power of legislation in the Parliament.

Sir Cecil Carr has also observed that the truth is that if the parliament is not willing to delegate the law-making power, the Parliament is unable to provide quality and kind of legislation the modern public wants.

  • Position in India: The position and Constitutionality of delegated legislation in India can be seen in various cases. It is divided into two phases i.e., before independence or we can say it as pre-independence and post-independence.
  • Pre Independence: In Queen v. Burah, only Conditional Legislation has been validated by the Privy Council and therefore delegated legislation is not permitted as per its reasoning. The administration of civil and criminal justice of a territory can be vested in the hands of those officers who were appointed by the Lieutenant-Governor from time to time.

The Privy Council has stated that it is better to take help from the subordinate agency in framing the rules and regulations that are going to be the part of the law and giving another body the essential legislative features that has only given to the Legislature through the Constitution. He also stated about the essential legislative function that included in determining the legislation policy.

In King v. Benori Lal Sharma, Condition legislative was again applied by the Privy Council, the same as in the case of Queen v. Burah. In this case the validity of the Emergency Ordinance given by Governor-General of India was challenged inter alia. It was challenged on the ground that he is taking the power of the Provincial Government. He was setting up special criminal courts for particular kind of offences but for the settling of any court, power has been given only to the Provincial Government. The judicial committee held that this is not delegated legislation. Privy Council also held that it is an example of an uncommon legislative power by which the local application of the provision of State determined by the local administrative body when it is necessary.

  • Post Independence: The Constitution of India does not provide the same position as the prominent British Parliament provide to the delegation of legislative powers and also how far delegation is permissible has got to be confirmed in India as a matter of construction from the express provisions of the Indian Constitution. It cannot be said that an exhaustible right of delegation is inherited in the legislative power itself.

In the case of Raj Narain Singh v. Chairman, Patna Administration Committee Air,[9] the Supreme Court of India upheld the delegation of power given to the executive by the legislature.

Lachmi Narain v. Union of India[10]

Facts: The Central Government exercising the power that it has got from Section 2 of the Part State (Laws) Act, 1950, which extended the Bengal Finances (Sales Tax) Act, 1941 to the Part State of Delhi with certain modification in Section 6 through a notification. By various notifications, the granted sales tax on various commodities was exempted but subsequently, the exemption was withdrawn by another notification. Dealers who are indulging in those commodities, challenges the validity of that withdrawal.

Judgment: It was held in this case that the notification issued by the Central Government is beyond its power conferred on it by Section 2 of the Union Territories (Laws) Act,1950 and in consequence of any type of notification issued by the Central Government is invalid and ineffective.

Advantages of delegated legislation

There are many advantages of delegated legislation as it is essential for a democratic country to flourish or make laws according to its public. These advantages are as follows:

  • Reduce the workload of Parliament: The Parliament has to pass several legislation within a short span of its life. It has to take such type of intensive work that it can hardly enact the law provisions in detail. If the Parliament devotes its time in laying down minor and subsidiary detail of each and every legislation by making all the rules required for that legislation then it will take too much time and in that time it can only deal with a small amount of Act in detail. It is lengthy, time consuming process and also it is expensive to operate Parliament process. It cannot cope up with the growing needs of legislation. So there arises the need to overcome that load and it can be possible only through delegating ones legislative authority to the subsidiary ones or the executives. Delegated authorities which an expert resides are more appropriate to make laws and to meet the needs of the community. It saves ample amount of time of the Parliament because it gives the members a chance to create or to make rapid changes in small items.
  • Technical Expertise: Today’s world has become very technical and complicated by the introduction of modern means and advancement in technology. So it is necessary for the members of parliament to know each and every field but one cannot be the master of all fields. Therefore, it is difficult for the members of Parliament to have all knowledge needed for making laws in various fields like on controlling technology, ensuring environmental safety, dealing with various industrial problems which need basic knowledge. Also, Parliament is not a forum which can make laws on administrative and technical details but it is more concerned with social issues and the rule of law. Therefore, it is thought that it is better for the parliament to debate on the broad topic or the main topic and leave the rest detail for the fulfilment by the expert of that particular field. Thus, delegates authorities with extra skills, experience, and knowledge are more suitable for making law.
  • Decentralized decision making: The local councils are more suited to make laws for their constituencies as they better know the condition of their constituencies than any other. These local bodies can make better laws for their area that a Parliament cannot do so because they knew their locals need, whats they want? And it is very essential to know a person for whom we are making laws. The Parliament makes the laws for broad principle while its delegate handles the local principle. This separation of power helps in the smooth running of the legislature.
  • Emergencies: Delegated Legislation allows for rapid action in case of an emergency  but Parliament take too much time in taking any decision. It has to call for a session then the Parliamentarian discusses the emergency topic. And after that, if they all conclude then only that act would have passed. In some cases, the Parliament have not enough time to accurately make a piece of legislation and a quick and safety legislation is required for the safety of a nation. For example, in the UK, the Prevention of Terrorism Act was created as delegated legislation and now this act has added a new prohibited group to the terrorism. Therefore, it is more appropriate for the delegate authorities to make legislation and deal with it.
  • Enables flexibility: In delegated legislation, Parliament makes law in broader skeletal form and the executive had to fill the minor details. So these minor details can be changed immediately without making any amendment in the Parliament. Therefore, it is flexible and the legislation made by this can be best for the needs of modern public.
  • Seeing the interest of affected person: To make  legislation effective it is important to know the need and interest of that person who is going to be affected by that law or legislation. Only sitting in big houses and making a decision for the affected person is easy but knowing their interests and their needs by living with them in the same condition in which they are living is tough and then making law for them will surely benefit that affected person. Therefore, it is necessary to delegate the rights of legislation by the Parliament to the Executive. The Executive knows the condition of the affected person better than the Legislature.
  • Experimental basis: It can be used as an experimental basis. It allows in quick lawmaking. If a law made for some circumstances and it does not fulfill the condition for which it has made then it can be changed and a new law can be made at the place of the older one. And if this law gets fitted according to the situation then this law will prevail in that area. In this way, it is an advantage in the view of modern public.

Judicial control over delegated legislation

The delegated legislation can be challenged in India in the courts of law as being unconstitutional, excessive and arbitrary. It can be controlled by the Judiciary on two grounds i.e., firstly, it should be on the ground of substantial ultra vires and secondly, it should be on the ground of procedural ultra vires. The criteria on which the law made by the executive can be considered as void and null by the court is that it should not be considered inconsistent by the constitution or ultra vires the parent act from which it has got the power of making law. The power of examining the delegated legislation in India has been given to the Supreme Court and the High Court and they play an active role in controlling the delegated legislation.

Judicial control over delegated legislative is exercise at the following two levels:

  1. Challenging the delegation as unconstitutional
  2. Improperly exercise of Statutory power.

No delegated legislation can survive clashing with the provisions granting Fundamental Rights. If any Acts violate the fundamental rights then the rules, regulations, and by-laws framed under it cannot survive. In India as well as in America the judicial control over the delegated legislation is based on the doctrine of ultra vires. Also, there are various methods through which judiciary in America exercises control over delegated legislation. 

The two main approaches taken by the judiciary in America for justifying the delegation of legislative power to the executive are:

  1. Filling up the details approach.
  2. Intelligible principle approach.

In the first approach, the Congress should lay down the standard policy for the guidance of executives and the executives have to fill the further details and carry out the policy of legislation according to the standard laid down by the Congress.

In the second approach, the court will review the delegated legislation if ultra vires the enabling statutes or it is not in accordance with the provisions mentioned in enabling statutes.

Cases that illustrate the Judicial control over the executives

  • Kruse v. Johnson:[11] The court laid down in the case that by-laws would be unreasonable on the following ground.
  • It should not be partial or unequal
  • It should not be manifestly unjust
  • It should not disclose bad faith
  • It should not involve oppressive interference with the right of the people that it could find no justification in the mind of the reasonable person.
  • Delhi Law Act Case:[12] In this case the power is given to the Central Government through an act to repeal the pre-existing law held to be ultra vires.
  • Chintaman Rao’s Case:[13] Prohibition of making bidis in the agriculture season by the Deputy Commissioner is violative of Article 19(1)(g) of the Indian Constitution.
  • Chandran v. R: It was held in this case that if the power of by-laws entrusted in the hands of the Legislature, then it must be within the limits of the Legislature and if it exceeds the limit then this by-laws can be struck down.

Effectiveness of Parliamentary control over delegated legislation

It is on the parliament to confer on anyone its power of legislation whom it likes, but at the same time, it has to see that if the power that has been conferred to the person is using that power for the public or not. If that person is misusing that power the Parliament can take that power back. It must ensure that there should be no misuse of that conferred power.

In Avinder Singh v. State of Punjab, Krishna Iyer J. appropriately expressed that parliamentary authority over designated enactment should be a living continuity as a protected need. The authoritative command over the organization in parliamentary nations like India is more hypothetical than practical. In truth, the control of the Parliament is not that much effective as it needs to be.

Jain and Jain stated about the control of the legislature over the delegated legislation that “It is the function of the legislature to legislate in a parliamentary democracy. If it seeks to delegate its legislative powers to the government due to a few motives, it is not the right of the legislature, but additionally its duty, as predominant, to look how its agent i.e. the executive carries out or maintain the company entrusted to it.”[14] Since it is the legislature which delegates legislative power to the executive, so it is its primary duty to check whether the entrusted the power is working properly or not and also it has power to supervise and control the actual exercise of this power. In the U.S.A., the government is not responsible to the Legislature and Congressional control of delegated regulation is in most cases indirect. However, the Congress can also direct administrative groups to put up the periodical and unique reports or to give an account of their activities. In the USA, Congress has no effective control over delegated regulation due to the fact the President of the USA is not accountable to the Legislature.

However, in India, there is a Parliamentary form of Government and the Prime Minister is accountable to the Legislature. So in India Parliament can exercise direct control over the Government. In India committees regarding control of delegated rules are formulated through Parliament for both houses every year. The principal characteristic of each committee is to scrutinize the statutory regulations, to make legal guidelines for the public, etc. made with the aid of any administrative frame and reports to the residence whether or not the delegated power has been exercised nicely within the limits provided underneath the Parent Act or the Constitution. However, in America no such type of powers are given to Legislature and also Legislature has no power to exercise direct control over delegated legislation made by the Executive. So it is essential to keep concord between Legislature and Executive in a democratic society and also there needs to be a powerful system of management of the Legislature over the Executive so that government cannot misuse their powers while making delegated rules.

Case laws

Facts: In this case, under the authority of the Local Government Act 1888, the Kent County Council made a by-laws. This law states that nobody could play music or sing a song within 50 yards of dwelling house in public place or highway after being requested to stop by a constable. The claimant was singing a hymn within 50 yards of the dwelling house and had refused to stop after the constable had told him to do so. He was given a penalty. He sought for judicial review to declare that the by-law was void.

Judgment: Lord Russell CJ, giving the courts leading judgment, held the by-law became valid on the ground that it becomes no longer unreasonable, due to the fact that it does not have a discriminatory impact on the population.

Facts: Section 3 and 4 of the Central Province and Berar Regulation of Manufacture of Beedis Act, 1948 grants power to the Deputy Commissioner to fix the period of agriculture season with respect to a certain village where the Act applies. The Deputy Commissioner has the power to prohibit the manufacturing of bidis and no person is authorized to manufacture bidis.

On 13th June 1950, an order was issued via the Deputy Commissioner of Sagar prohibiting the people in certain villages to manufacture bidis. When the case is dealt by the Hon’ble Supreme Court, the period cited within the order expired and another order covering the agricultural period from 8th October 1950 to 18th November 1950 was issued and the same order was questioned in the present case. Does the question arise whether the impugned Act is falling within the saving clause or excess of its provisions?

Judgment: It has been held in this case that prohibition of making bidis in the agriculture season by the Deputy Commissioner is violative of Article 19 1(g) of the Indian Constitution.

Criticism on delegated legislation

Following are the criticism of delegated legislation:

  1. Delegated legislation results in overlapping of functioning  as the delegated authorities get work to amend the legislation that is the function of the legislators.
  2. It has been a matter of question that if the Legislature control has come down after the arrival of the delegated legislation.
  3. Unelected people cannot make much delegated legislation as it would be against the spirit of democracy.
  4. After getting too much power from the Legislature, the Executive has encroached upon the domain of legislature by making rules and regulations.
  5. The enactment subject that was appointed to less Parliamentary scrutiny than essential enactment. Parliament, along these lines, has an absence of authority over appointed enactment, and this can prompt irregularities in laws. Appointed enactment, in this way, can possibly be utilized in manners which Parliament had not foreseen when it was given the power through the Act of Parliament.
  6. Delegated legislation makes laws without much discussion. So, it may or may not be better for the public.
  7. Designated legislation by and large experiences an absence of exposure. Since the law made by a statutory authority not informed to general society. Then again, the laws of the Parliament are generally broadcasted. The purpose of the absence of exposure is the enormous degree of enactment that is being assigned. There has likewise been concern communicated that an excess of law is made through appointed enactment.
  8. It can possibly be misused for political gain. The executive makes law according to what the political parties. Hence, it results in the misuse of the legislation made by the Executive by the ruling party.
  9. Executives become too powerful as it already has the power of executing any laws and legislation and now the Legislature is delegating its legislative power to the Executive. So, both the power are in the hands of the executives now he can use this power in whatever way he wants to use it.
  10. It is against the theory of the power of separation which has been given by the famous political thinker Montesquieu.

Conclusion

Delegated or subordinate legislation means rules of law made under the skilled person of the Act of Parliament. In spite of the fact that lawmaking is within the capacity of the lawmaking body, it might, by a resolution, delegate its capacity to different bodies or people. The resolution which delegates such power is known as the Enabling Act. By Enabling Act the council sets out the wide rules and nitty-gritty principles are instituted by the delegated authority.

If in India the control of Parliament over the delegated legislation has to be made a living continuity, then it is important that the job of the advisory groups of the Parliament must be fortified and a different law like the Statutory Instruments Act, accommodating uniform standards of laying and production, must be passed. The board of trustees might be enhanced by a specific authority body to make the watchfulness of assigned enactment progressively successful. Other than the different measures mentioned above, it should be taken to reinforce the control of Parliament over designated enactment. The tenets and standards created by the Legal Executive should be connected by the necessities of the advanced age. In spite of the fact that there are no express arrangements in the Constitution of India to allow the appointment of authoritative power, the legal pattern saw in regard of assigned enactment is as per the aim of establishing fathers our Constitution whose principal concern was the flexibility of the Constitution with changing needs of the time. If you want to make certain that the power of delegated law in the arms of the government is not misuse, it is vital to adopt powerful modes of control as applicable in the USA which India has now not integrated yet. 

Reference

  1. https://www.jstor.org/stable/43951254?read-now=1&seq=3#metadata_info_tab_contents
  2. Queen v. Burah,  [1878] UKPC 26
  3. D.S. Grewal v.The State of Punjab, 1959 AIR 512
  4. Panama Refining Co. v. Ryan, 293 U.S. 388
  5. State Of Sikkim vs Surendra Prasad Sharma, 1994 AIR 2342
  6. https://rajyasabha.nic.in/rsnew/practice_procedure/book13.asp
  7. Field v. Clarke, 143 U.S. 649 (1892)
  8. Wagman v. Southard, 23 U.S. 10 Wheat. 1 1 (1825)
  9. Raj Narain Singh v. Chairman, Patna Administration Committee Air, 1954 AIR 569
  10. Lachmi Narain v. Union of India, Air 1976 Sc 714
  11. Kruse v. johnson, [1898] 2 QB 91
  12. In Re The Delhi Laws Act, 1951 AIR 332
  13. Chintaman Rao and Ors. v. State of Madhya Pradesh, 1951 AIR 118
  14. Jain, M.P. & Jain, S.N.; (2007) Principles of Administrative Law, 6th Ed., Vol. II, Wadhwa Nagpur.

 

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