This article is written by Soma-Mohanty of KIIT School of Law, Bhubaneswar. In this article she has explained about punishments, essentials of bigamy, the provision of bigamy in Hindu laws, the provision of polygamy in Muslim religion and about fraudulent marriages.

Introduction

• • The previous definition of bigamy consisted of these stated words “having a husband or wife”, but these words become vague once the first marriage ceases to be legal after separation.
  • Thus the definition of bigamy under Section 494 of IPC was suggested to be redrafted.
  • According to Section 5 of the Hindu Marriage Act,1995 the conditions necessary at the time of marriage is that both the partners getting married should not be having a living spouse.
  • But there is an exception provided by Section 494 of IPC, it states that either of the partners can contract a second marriage after the long absence of her partner for a period of seven years.

Essentials of Section 494 of IPC

• The first marriage should be according to the law i.e, it should be legal
• Second marriage should have taken place
• The first marriage should be existing
• The spouse must be alive
• Both marriages should be valid

Classification of offence

• It is a non-cognizable offence.
• It is a bailable offence 

Who can file a complaint

• Any person who has been deceived by their partner can file the complaint.
• In the case of a wife, her father, mother, brother, sister or any person related to her by blood, with the leave of the court can file a complaint on her behalf.
• In the case of the husband, only he is permitted to file the complaint.

Compoundable offence

• Offences under bigamy are compoundable only if there is a consent of the wife and if the competent court permits.

Bigamist meaning 

 When a person is already married and the marriage is still valid, then contracts another marriage with another person is called bigamy and the person committing this is called bigamist.

Example: “A” was married to “B” who is his wife and due to some fights she left her in-laws place and went to her parental home. Then after some days, her husband married another woman. In this case, “A” is to be called as a bigamist.

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Bigamy vs polygamy 

Muslim polygamy

Origin 

• After the Battle of Uhud, it was seen that may Muslims died fighting for the Prophet as well as Islam.
• Many women were left without a husband and their children were left behind as orphans.

Thus Allah was concerned about the suffering and thus polygamy was introduced as follows.

• According to Muslim Marriage Law, a husband can have up to four wives only.
• Muslim polygamy is not abolished in India.
• According to Muslim Personal Law, a Muslim male is permitted to marry again in the presence of the validity of his previous marriage.
• The validity of polygamy comes from Chapter 4 of the Quran.
• In most of the places, Muslim polygamy is practised without the wife’s consent.
• Thus, Pakistan in 1961 passed the Muslim Family Laws Ordinance in which a husband needs to seek permission from the  Chairman of the Union Council, who is an elected local government body.
• This rule prohibits the man to get married secretly.
• Muslim Law permits a man for polygamy but it restricts the man to force his first wife to stay with him. [3]

Hindu polygamy in Modern India

• The Hindu Marriage Act, 1995 prohibits polygamy. According to this Act marriage arising out of polygamy is not void in nature any person not abiding by the law would be punished under Sections 494 and 495 of IPC.
• Section 5 of The Hindu Marriage Act, 1995 states that to consider a marriage to be valid the main essential should be that both of the parties have no surviving spouse.
• In the case of Sarla Mudgal v. Union Of India, it was held that the marriage had taken place according to The Hindu Marriage Act, 1995 and it would only dissolve with the provisions of this Act. The man converting himself to other religions won’t provide him immune to escape from the punishment.

Christian polygamy 

• According to the Old, Testament polygamy is explicitly forbidden.
• Minister of Religion of a Church and the Marriage Registrar are the authorities who administer Christian marriage.
• According to the provision, there are two criteria for marriage

• The person should be marrying for the first time.
• The person getting married should not be having a living spouse.

• But there is no scope for existing marriage.
• And the person who takes the false oath and hides the fact of his previous marriage and a living spouse would be punished under Section 193 of IPC.

Fraudulent marriages

According to Section 493 of IPC

• When a man tactfully traps a woman to believe that they are married lawfully and with that believe she had a sexual relationship with him, despite the fact that the marriage is invalid.
• In this case, the person would be punished with imprisonment for a term which may years.
• He would also be liable to pay the fine; or
• Both imprisonment as well as fine.

According to Section 496 of IPC

• When a person gets married again, with the sufficient knowledge that it is not valid according to the law and hides the fact.
• Then, in this case, he would be punished with imprisonment for a term which may exceed to seven years.
• He can also be liable to pay the fine.

Essential ingredients to constitute the offence

Fraudulent intention

• In both of the sections it is necessary to show that the act done is fraudulent in nature.
• It is necessary to show that the woman is completely unaware of the voidness of the marriage but the man is clearly aware of the situation.
• A marriage is considered to be valid when both people are going through all the necessary rituals of marriage under bonafide impression, though the marriage in not valid in real life.
• This situation arises because the man is not aware of the facts and there was no fraudulent intention at the time of marriage.
• From the above facts stated it is clear that means rea constitute one of the strong elements under this section.

Arising false belief

• The mere act of a man to cheat the women won’t be sufficient enough to constitute the offence.
• It has to be shown that with the false interpretation the man married the women and under this false impression that they are legally married, they had sexual intercourse.
• But if the women have closure to all the facts and still allows him to have sexual intercourse then it won’t be valid.
• When the dissolution of the previous marriage of a man is running in the court and during the period he gets married again then it is not valid. But if he gets married informing the girl and her parents about the above-stated fact, then it won’t be considered as a fraudulent action.

Conversion for the purpose of polygamy

• Taking references of different judgments it is quite evident that the conversion of religion for the purpose of second marriage in existence of previous marriage won’t be an aid to the punishment under Section 494 of IPC. 
• In the case of Sarla Mudgal v. Union Of India [4] it was observed that her husband changed his religion to Islamic religion to get married to another woman. But it was seen that there was no dissolution of the first marriage. 
• But the Supreme Court, in this case, decided that the changing of religion for the purpose of getting married to another person during the existence of the first marriage would amount to an offence under Section 494 of IPC.

Why is bigamy illegal

• When bigamy is performed in the existence of the second marriage and the facts are not disclosed before the partners, then it is considered to be illegal.
• When a person hides the fact of his previous marriage,e and gets married again, then it constitutes fraudulent action. Thus it is illegal.
• In the case of existence of first marriage which is valid, when a person goes through another marriage then the other partner is deprived of rights that the person was entitled by law during the marriage. And according to law, no person would be deprived of rights.

Bigamy IPC

Section 494

• This Section states that any person who is already having a husband or wife and marries another person in existence of previous spouse, then the person shall be punished with imprisonment which shall extend to seven years and would be liable to fine.
• But a person can not be convicted under this section when the marriage has already been declared void by the court.
• When one of the spouses is missing for a period of seven years and there is no information about his existence then the other partner can contract another marriage. But the spouse needs to open the facts before the person whom they are getting married.

Who can file bigamy charges

• The person who has been cheated by their spouse in the contract of second marriage can only file a case against the person under this Section.
• The first spouse does not have the right to file a complaint under this section.

In the case of women

• She can herself file the complaint.
• In the case of a wife, her father, mother, brother, sister or any person related to her by blood with the leave of the court can file a complaint on her behalf.

In the case of a husband

• No person on behalf of the husband can file the case i.e, he has to file the complaint himself
• But in the case of  the person in Armed Forces, who is not able to take leave to file the complaint exception is provided

Rights of the second wife

• There is no provision for the right of a second wife in the case of a second marriage. She can not claim the property right of her husband.
• But a second wife can claim the rights if the marriage is valid under the exceptions provided in Section 494 of IPC.
• Where the second marriage has taken place according to the Hindu Marriage Act but is invalid according to the provisions of this act, then the second wife has no right to claim.

Child from the second marriage 

• When the second marriage is declared valid, the child born would have equal rights as per the child from the first marriage have.
• But if the second marriage is not valid according to the provisions of the Hindu Marriage Act, then also the child born out of the second marriage would inherit the same rights as the child from first marriage would.
• Section 16 of the Hindu Marriage Act, provides provision where the second child can inherit the rights.

Bigamy in Goa

• Any Muslim man who has done his marriage registration under Goa is not permitted to perform polygamy.
• But Goa allows polygamy as well as bigamy in certain cases such as
• When a wife of a previous marriage is not able to give birth to a child and she reaches the age of 25 years.
• When the wife of a previous marriage is not able to give birth to a male child even after the completion of 30 years of age.
• When the previous marriage is dissolved according to the provisions of the Goa Civil Code

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Reference 

[1] MANU/SC/0068/1965

[2] MANU/GJ/1225/2015

[3] Itwari vs. Asghari and Ors.  MANU/UP/0196/1960

[4] MANU/SC/0290/1995

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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 eligibility to hold citizenship of India.

History

When there was a declaration of independence, the country was divided into two parts one was India and the other was Pakistan. The people were provided independence to join any country they want to get the nationality of. Thus the situation demanded strict provisions to frame the nationality policy of India before the commencement of the constitution.

Constitutional Provisions governing citizenship

After the partition it was seen that people were migrating from one border to another, thus it was difficult to frame the provision for citizenship in India.

Citizenship act and its amendment 

Citizenship Act of 1955

Amendments 

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Modes of acquiring of citizenship 

Citizenship By Birth

According to Section 3 of The Citizenship Act, if a

• When a person is born on or after 26th January 1950 but before 1st July 1987, then he would be entitled to get citizenship by birth.
• When a person’s parents are a citizen of India or either of the parents is a citizen of India then the person would be entitled to get citizenship by birth.
• If one parent is a citizen of India and the other is not, then it is necessary to establish the fact that the other parent is not an illegal migrant at the time of the birth of the child.

Citizenship By Descent

According to Section 4 of The Citizenship Act,

• A person born outside India on or after January 26, 1950, is a citizen of India by descent if his/her father was a citizen of India by birth.
• A person born outside India on or after December 10, 1992, but before December 3, 2004, if either of his/her parents was a citizen of India by birth. 
• If a person born outside India or after December 3, 2004, has to acquire citizenship, his/her parents have to declare that the minor does not hold a passport of another country and his/her birth is registered at an Indian consulate within one year of birth.
• Provided that a minor under this section is if a citizen of another country must renounce that within six months.

Citizenship By Registration

According to Section 5 of The Citizenship Act,

• A person of Indian origin who has been a resident of India for 7 years before applying for registration.
• A person of Indian origin who is a resident of any country outside undivided India.
• A person who is married to an Indian citizen and is ordinarily resident for 7 years before applying for registration.
• Minor children of persons who are citizens of India.

Citizenship By Naturalisation

According to Section 6 of The Citizenship Act,

• When an application for grant of a certificate of naturalisation is made by a person who is fully aged or has attained the capacity and the Central Government is satisfied that all the conditions are fulfilled, then the person is granted the certificate of naturalisation.
• When a person is granted the certificate of citizenship by naturalisation, he has to take oath in the manner specified in the Third Schedule.

Citizenship By Incorporation of Territory

According to Section 7 of The Citizenship Act,

• When any territory is added to the constitution of India, then the people of those territories would be considered as the citizen of India.
• These people would be granted citizenship by the Official Gazetteonce the Central Government notifies them.
• They would be considered as the citizen from the date specified in the order.

Overseas citizenship of India

• A foreign citizen of Indian origin is given the permission of immigration to live and work in the Republic of India, this is known as Overseas Citizenship of India.
• It was introduced for the purpose of granting dual citizenship.
• It was brought into light from The Citizenship (Amendment) Act, 2005.
• People with Overseas Citizenship of India are permitted from certain rights

1. No right to vote.
2. No right to hold constitutional offices
3. No right to buy agricultural properties

Requirements to apply and use Overseas Citizenship of India document

1. Citizenship
2. Should be a holder of a passport of another country

History

Previously citizens of India were not permitted to hold dual citizenship and this provision was laid down by the Constitution of India. Thus, a person was not permitted to hold any other countries passport with an Indian passport.

• This provision raises many problems, thus High-Level Committee on Indian Diaspora recommended the Government of India to provide Overseas Citizenship of India as specified in the Section 7A of the Citizenship Act, 1995.
• Earlier travelling required the travellers of Overseas Citizenship of India card to carry a passport and it should have a lifetime visa.  But this provision was rejected and it is not mandatory to carry.

Eligibility

A person is eligible to get registered as Overseas Citizenship of India by the Government of India under certain conditions

• Should be a citizen of India as per dated on 26th of January 1950 or after the date stated.
• The person’s grandfather or grandparents should be a citizen of India.
• When the person’s grandfather or grandparents are a citizen of India and the person is a minor child.
• When a person’s both parents are a citizen of India or either of the parents is a citizen of India and the person is the minor child.
• When the person’s spouse is of foreign origin of a citizen of India or holder of Overseas Citizen of India and the marriage has been registered for more than two years.
• Exception: if the person’s either parents or grandparents or great grandparents had or having the citizenship of Pakistan or Bangladesh, is eligible for registration under Overseas Citizen of India

Application 

Application for Overseas Citizenship of India is submitted online.

• A person while submitting the application for Overseas Citizenship of India has to attach a photograph of him/ her in the application.
• It is mandatory for the person to produce all the documents required for verification, to prove the eligibility criteria.
• The person is required to submit the application fee.

• Application submitted outside of India is charged with the amount of US$275
• The application submitted inside India is charged with the amount of Rs. 15,000

• The person is required to produce the proof of citizenship he is currently possessing and in addition, he needs to produce a photocopy of the passport. And the passport must be having the validity of six months at least
• If the application made by the person is within the Indian jurisdiction, then it is mandatory for him to submit a photocopy of the Indian visa.
• The person is required to produce the proof that either of his/her parents or grandparents or great grandparents are the citizens of India.
• The person needs to produce a photocopy of the Indian visa, photocopy of the Domicile Certificate, photocopy of the Nativity Certificate of either of his/her parents or grandparents or great grandparents.
• If the above-stated documents produced are checked and the basis of Indian origin is proved then the person is required to show that the relationship stated above is a lawful relationship.
• The documents required to prove the relationship can be a birth certificate in which both the parent’s identity is mentioned.

Renewal

• Till the completion of 20years of age, a new passport is to be issued.
• After attaining the age of 50years it is required to re-issue the Overseas Citizen of India registration certificate as well as the visa.
• For the person’s between the age of 21 to 50, It is not mandatory to re-issue the document of Overseas Citizen of India to get the new passport.

 Privileges

• The Overseas Citizen of India cardholders are given multiple-entry, multi-purpose visa forever.
• their period of stay in India is not restricted.
• Uniformity is provided to the non-resident Indians in the matter of financial, economic, and educational fields.
• Uniformity is maintained between the non-resident Indians and resident Indians in the domestic Airfares.
• The non-resident Indians are given the right to employment in private sectors.
• Overseas Citizen of India cardholders are exempted from producing employment visa and for registration with Overseas Citizen of India Foreigners Regional Registration Office for the job.
• OCI holders are exempted to apply for the Inner Line Permit or Protected Area Permit. They are allowed to travel around any part of India.

Disadvantages of OCI Card

• The OCI cardholders do not have the right to vote.
• The OCI cardholders are exempted from the right to hold the office of Prime Minister, President, Vice-President, Judge of the Supreme Court and the High Court, member of Lok Sabha, Rajya Sabha, Legislative Assembly, or Council.
• The OCI cardholders are exempted from the right of employment in government sectors.
• The OCI cardholders have no right of acquisition of agricultural or plantation properties.

Cancellation of OCI card 

The existing registration of OCI can be cancelled through the provisions of Section 7D of the Citizenship Act,1995. The Government of India has the right to cancel the OCI if it has been obtained by false representation or concealment of facts.

The followings are the conditions in which OCI is cancelled according to  Section 7D of the Citizenship Act,1995

• If the registration was based on the facts of false representation, concealment of facts and the OCI was obtained.
• If the OCI cardholder’s action is not according to the law established by the Constitution of India.
• During any war relating to India, if it is found that any OCI cardholder was involved with the enemies and had unlawful communication or any trade or business that helped the enemy during the course of the war.
•  If an OCI cardholder is sentenced with imprisonment for a term not less than two years.

Renunciation of OCI 

When the person has registered for OCI document, but they find it necessary to abstain from it and withdrawal the application, then renunciation of OCI is done. The provisions followed in the procedure of renunciation of OCI are laid down in Section 7C of the Citizenship Act.

According to Section 7C of the Citizenship Act

• When an overseas citizen of India who has attained the age of capacity decides to renounce his overseas citizenship of India, then he can do so on registration before the Central Government. And after the registration, the person would cease to be a citizen of India.
• After the renounce of the person, the minor child of the person would cease to be a citizen of India

Person of Indian origin

When a person of Indian origin has been entitled to the passport of other countries, they hold Person of Indian Origin Card. But the passport should not be from countries like Afghanistan, Bangladesh, Bhutan, China, Iran, Nepal, Pakistan, and Sri Lanka.

The Person of Indian Origin Card has ceased to work from 9th January 2015 and has been merged with the OCI  card provision. Thus the holders of The Person of Indian Origin Card are treated as OCI cardholders.

Conditions 

Certain conditions are required to be fulfilled to issue the Person of Indian Origin Card are as follows.

• If the person has never been an Indian passport holder.
• If the person’s parents, grandparents or great grandparents were residing permanently in India and they never had the citizenship of countries like Pakistan and Bangladesh.
• If the person’s spouse is a citizen of India or PIO cardholder.

Benefits to PIO card holder 

• A person with a PIO card is allowed to enter into India, without producing a visa.
• A person with a PIO card is allowed to stay in India for a period of six months without registration.
• Uniformity is provided to the non-resident Indians in the matter of financial, economic, and educational fields.
• They have the right to acquisition, transfer, and disposal of immovable properties in India.
• Child of the person with a PIO card has the right to education in any government or private educational sectors.

Dual citizenship

Availing dual citizenship of India and another country requires certain strict provisions. Earlier there was no provision of dual citizenship in India. These certain provisions are required to be fulfilled to obtain dual citizenship in India

• When a person from another country is working in India and their child is born in India, then dual citizenship is granted to the child until the period of employment in India.
•  A minor of Indian origin has the right to hold dual citizenship of India as well as another country. The minor is provided with dual citizenship so that the minor child chooses the preference of nationality before six months of attaining the age of eighteen.

Renunciation of Indian citizenship 

Under Section 8 of the Citizenship Act,1995 the provisions for renunciation of citizenship has been laid down

• When both the parents are no more citizen of India, then their minor child is given the right to choose the nationality of his/her preference within the given period of time, after he/she attains the age of eighteen
• When a citizen of India has attained the age of maturity or capacity and decides to renunciate the citizenship of India then he can submit his renunciation by registering under the prescribed authority.
• After submission to the prescribed authority, the person ceases to be a citizen of India.
• But if the person submits the request for renunciation of citizenship during the period of war India is engaged in then the request would be kept pending until directed by the Central Government of India.

Termination of Indian citizenship

According to Section 9 in the Citizenship Act,1995 the following provisions are provided for the termination of Citizenship

• When a citizen of India voluntarily acquires the citizenship of another country, then he ceases to be a citizen of India.
• But a citizen of India who voluntarily acquires the citizenship of some other country during the period of war, then his citizenship won’t be ceased till the Central Government directs.

Case law

In the case of Bhagwati Prasad Dixit v. Rajeev Gandhi[6],  it was seen that the question raised was against the validity of the election. According to the appellant, the respondent was to be disqualified from being a candidate in the election as he has ceased to be a citizen of India. The respondent had challenged the verdict of the High Court.

It was held that the High Court has correctly dismissed the plea because it the arguments that were put forward did not disclose any cause of action. Moreover, the question of acquisition of Foreign citizenship under Section 9 of the Citizenship Act, is to be answered by the Central Government and the High Court does not have the jurisdiction.

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Reference

[1] AIR 1996 SC 1436

[2] AIR 1966 SC 1614

[3] AIR 1955 SC 282

[4] AIR 1971 SC 1382

[5] AIR 1954 SC 229

[6] 1986 AIR 1534

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This article has been written by Richa Singh of Faculty of Law, Aligarh Muslim University. She has covered all the legal aspects, the procedure for filing a complaint and the consequences of medical negligence.

Introduction 

Medical negligence has become one of the serious issues in the country in recent years. Even the medical profession, which is known to be one of the noblest professions, is not immune to negligence which often results in the death of the patient or complete/partial impairment or any other misery which has adverse effects on the patient’s health. There are instances where doctors who are under-educated leads to the proceedings in the court of law due to the magnitude of negligence or deliberate conduct shown by the doctors. 

Around 52 lakh medical injuries are recorded every year in India out of which 98,000 people in the country lose their lives in a year because of medical negligence. It is really a serious concern for the entire nation that 10 people fall victim to medical negligence every minute and more than 11 people die every hour in the country due to this medical error. (Source: https://www.indiamedicaltimes.com/2016/05/25/98000-people-lose-their-lives-because-of-medical-negligence/)

It is no surprise that even the slightest mistake made by a doctor can have life-altering effects on the patients. So, it is the duty of a doctor to take proper care to avoid such happenings.

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Medical Negligence

Commission of mistakes or Negligence within the health profession could result in minor injuries or even lead to some serious injuries and these mistakes could even lead to death. Since no one is perfect in this world, a person who is skilled and has knowledge of a particular subject can also commit mistakes. To err is human but to replicate the same mistake due to one’s carelessness is negligence. 

The fundamental reason behind medical negligence is that the carelessness of the doctors or medical professionals are often ascertained in various cases where reasonable care is not taken during the diagnosis, during operations, while injecting anesthesia, etc.

Medical negligence definition

We can define ‘Medical negligence’ as the improper or unskilled treatment of a patient by a medical practitioner. This includes negligence in taking care from a nurse, physician, surgeon, pharmacist, or any other medical practitioner. Medical negligence leads to ‘Medical malpractices’ where the victims suffer some sort of injury from the treatment given by a doctor or any other medical practitioner or health care professional.

Examples of medical negligence

Some examples of medical negligence are as follows: 

• improper administration of medicines.
• performing the wrong or inappropriate type of surgery.
• not giving proper medical advice.
• leaving any foreign object in the body of the patient such as a sponge or bandage, etc. after the surgery.

What does not come under medical negligence

A doctor is not liable in all cases where a patient has suffered an injury. He might have a valid defense that he has not breached the duty of care. 

The error of judgment can be of two types: 

• An error of judgment – In such cases, it has been recognized that it doesn’t amount to a breach of duty. Merely because a doctor’s decision turned out to be wrong, we cannot make him liable for medical negligence.
• The error of judgment due to negligence – If all the factors were considered before coming to a decision then it would be called an error of judgment due to negligence. This amounts to a breach of duty. 

Types of medical negligence

Medical negligence can occur in different ways. Generally, it occurs when a medical professional deviates from the standard of care that is required. 

So, we can say that any kind of deviation from the accepted standards of medication and care is considered to be medical negligence and if it causes injury to a patient then the doctor who operated on him, other staff and/or hospital may be held liable for this.

Some of the common categories of medical negligence are as follows:

• Wrong diagnosis – When someone goes to a hospital, clinic or medical room, etc. the first step after admittance is the diagnosis. Diagnosing symptoms correctly is critical and important to provide medical care to any patient. However, if a patient is not treated properly due to any mistake in diagnosis, the doctor can be made liable for any further injury or damages caused as a result of the wrong diagnosis.
• Delay in diagnosis – A delayed diagnosis is treated as medical negligence if another doctor would have reasonably diagnosed the same condition in a timely fashion. A delay in diagnosis can cause undue injury to the patient if the illness or injury is left to worsen with time rather than being treated. Obviously, any delay in the identification and treatment of an injury can reduce the chance of recovery for the patient.
• Error in surgery – Surgical operations require an enormous level of skill and it should be done with due care and caution because even the slightest mistakes can have profound effects on the patient. The wrong-site surgery, lacerations of any internal organ, severe blood loss, or a foreign object being left in the body of the patients, all this comes under Surgical error.
• Unnecessary surgery – Unnecessary surgery is usually associated with the misdiagnosis of patient symptoms or a medical decision without proper consideration of other options or risks. Alternatively, sometimes surgery is chosen over conventional treatments for their expediency and ease compared to other alternatives.
• Errors in the administration of anesthesia – Anesthesia is a risky part of any major medical operation and requires a specialist (anesthesiologist) to administer and monitor its effect on the patient. Prior to any medical procedure requiring anesthesia, the anesthesiologist has to review the patient’s condition, history, medications, etc.  to determine the most suitable of all the medicine to use. Anesthesia malpractice can happen even during the pre-operation medical review or during the procedure itself.
• Childbirth and labor malpractice – Childbirth is a difficult event for a woman and it becomes worse if not handled properly by the doctors and nurses. There are many instances of medical negligence during childbirth including the mishandling of a difficult birth, complications with induced labor, misdiagnosis of a newborn medical condition, etc.
• Long-Term negligent treatment – Medical negligence can also occur in subtle ways over the course of a long treatment period. Usually, the negligence can take the shape of a failure to follow up with treatment, or a doctor’s failure to monitor the effects of the treatment properly.

Essentials of medical negligence

The term ‘Medical negligence’ consists of two words – medical and negligence. Negligence is solely the failure to exercise reasonable care. Medical negligence is no different. It is only that, in case of medical negligence, the doctor is the defendant.

In an action for negligence, the following essentials are required:

• The defendant owed a duty of care to the plaintiff.
• The defendant made a breach of that duty.
• The plaintiff suffered damage as a consequence of that breach.

A doctor owes certain duties of care to his patients, they are as follows:

• It is his duty to decide whether he wants to undertake the case or not,
• It is his duty to decide what treatment to give and;
• It is his duty to decide the administration of treatment.

If a doctor fails to perform the aforesaid duties it results in breach of duty and gives a right of action to the patient. A breach of duty is committed by a doctor when he does not perform the degree of care like a reasonable doctor.

In Kusum Sharma v. Batra Hospital[1], it was held by the Supreme Court that a doctor often adopts a procedure which involves a higher element of risk, but in doing so he honestly believes that it will provide greater chances of success for the patient. If a doctor has taken a higher risk to redeem the patient out of his/her suffering and it did not yield the desired result, this may not amount to medical negligence.

In Jasbir Kaur v. State of Punjab[2], a newly born child was found missing from the bed in a hospital. The child was found bleeding and near the wash-basin of the bathroom. The hospital authorities argued that the child had been taken away by a cat which caused the damage to him. The court held that the hospital authorities were negligent and had not taken due care and precaution. Thus, awarded the compensation amounting to Rs. 1 lakh.

Standard of care 

A standard of care specifies the appropriate treatment and medication procedure as per the requirements that should be taken into account by a doctor while providing the treatment to his patients. The care should not be of the highest degree nor the lowest.

Here, the degree means the level of care an ordinary health care professional, with the same training and experience, would render in similar circumstances in the same community. This is the critical question in medical malpractice cases and if the answer is “no,” and you suffered injury as a result of the poor treatment, you may file a suit for medical malpractice.

In the case of Dr. Laxman Balkrishna Joshi Vs. Dr. Trimbak Bapu Godbole and Anr.[3], the Supreme Court held that a doctor has certain aforesaid duties and a breach of any of those duties can make him liable for medical negligence. A doctor is required to exercise a reasonable degree of care that is set for this profession.

Duty of care

A duty of care in cases of medical negligence is an obligation on one party (doctor) to take care to prevent harm being suffered by another (patient). Generally, doctors owe an obligation to take care of their patients. 

There are certain requirements to establish a duty of care. They are as follows:

• A physician is not asked to deal with everyone but when he is taking a case then he should deal with it with proper care and in accordance with the set standard of care. A doctor or clinical practitioner prescribing a patient to seek a provider of an extra health practitioner is acceptable. However, when there is an emergency, a medical professional ought to deal with the patient. No health care professional shall immediately resist dealing with the case unless it is out of the area of his expertise.
• The physician should never stretch nor reduce the gravity of a patient’s condition. He will have to make sure that he gives proper treatment to the patient considering the type of ailment the person is suffering from.
• A doctor must have patience as he cannot do without it. The confidentiality of the details of the patient should be kept secret. However, in a few cases, he can reveal the details if he feels that it is his duty to do so. For instance, if there is a disease that is spreading and is dangerous for people then he can make it public and let others know about it.
• A physician or a doctor is free to choose whom he wants to treat but in case of emergency he cannot deny dealing with the patient. But after undertaking a case, the health care professional cannot withdraw from the case without informing the family members of the sufferer. A temporarily or fully registered medical practitioner should not voluntarily commit any act of negligence that deprives his patients of the standard of care.
• When a physician who deals with a particular problem and has expertise in that field is unavailable and another physician is sent for the treatment, the acting doctor is entitled to get his charges but should ensure the patient’s approval or permission to resign on the coming of the physician engaged.

Burden of proof

The burden of proof of negligence generally lies with the complainant. The law requires a higher standard of evidence to support an allegation of negligence against any doctor. In cases of medical negligence, the patient must establish a claim against the doctor in order to succeed.

In Calcutta Medical Research Institute vs Bimalesh Chatterjee[4], it was held that the onus of proving proofs against negligence and deficiency in service was clearly on the complainant. 

Proof of negligence

It has been held in different judgments to charge a doctor for medical negligence the burden of proof lies upon the person who alleges negligence against him (patient). It is a known fact that things can go wrong even with the specialists. And the guilt or negligence can only be established if his acts fall below the standard of care that he ought to take.

Steps to proving a medical malpractice claim

• The first thing you need to prove is that there exists a doctor-patient relationship. This is the easiest step that one can take in order to prove medical negligence.
• The next thing you should do is prove that your doctor did not meet the set standards required as an obligation for this profession.
• Then prove that you have suffered an injury as a result of that medical negligence.
• The proof of damages must be presented and this includes all the harm you have suffered due to the negligent behavior of the doctor.
• All the above-mentioned elements should be proved in order to succeed in a claim against medical negligence.

When does the liability arise

Generally, the liability of a doctor arises when the patient suffers injury due to the substandard conduct of the doctor, which was far below the reasonable standard of care. Hence, the patient should establish that there exists a duty which the doctor needs to follow and then the next step is to prove breach of duty.

Normally the liability arises only when the complainant is ready to discharge the burden on him of proving negligence. However, in some cases the principle of “res ipsa loquitor” which implies that the thing speaks for itself, can come into action. Mostly the doctor is liable only for his own acts but there are some cases in which a doctor can also be made vicariously liable for the acts of another. For example, when a junior doctor is working for the senior doctor commits an error then it becomes the responsibility of the senior making him vicariously liable.

Res ipsa loquitur

The Latin maxim “res ipsa loquitur” means that “the thing speaks for itself.” 

In terms of medical malpractice, it refers to the cases where the doctor’s treatment was far below the set standards of care under that negligence is assumed.

The doctrine assumes the following:

• Nature of injury gives the clue that without negligence it could not have happened.  
• There was no involvement of the patient himself in the injury in any way.  
• The injury happened under the circumstances which were under the supervision and control of the doctor.

It means that by applying the principle the judge has accepted that the negligence has occurred. After this, the doctor will have to rebut this thing and if he fails to do so then the patient would be considered as successful in the case of medical negligence.

How to prove a res ipsa loquitur case?

The injured party must prove that the physician breached the duty of care by failing to adhere to the set standards of care a doctor must follow. The breach must be demonstrated by an expert’s attestation. In res ipsa negligence cases expert declaration about the standard of care is not really required. 

In order to prove a res ipsa case, the following must be done: 

• It is well known to everyone that if a case seems like it could never happen without negligence on the part of the doctor then this directly proves that it falls under the category of res ipsa cases.
• The equipment or manner of treatment that caused the damage was under the doctor’s control at all times.
• The injury was the one which the injured person couldn’t assume voluntarily.

Some Examples of Res Ipsa Medical Cases

Some common scenarios of res ipsa cases are given below: 

• Leaving some object inside the body of the patient after surgery.
• If a wrong patient gets operated.
• If the wrong part of the patient gets operated.

Filing a complaint

Being in a noble profession the practitioner must take a reasonable degree of skill and care and must exercise a reasonable degree of care. The law requires neither the very highest nor a very low degree of care and skill and is different for different cases. If he fails to do so then a complaint can be filed against him.

Medical negligence complaint

A complaint is an allegation made by a complainant. It is in written form. It consists of the statements and some important facts to establish a case that a consumer has suffered loss or damage due to deficiency of any service. 

What is the cost involved in filing a complaint?

A minimal fee is required for filing a complaint before the district consumer redressal forum for medical negligence cases.

Adjudication of liability

When a complaint against medical negligence is filed, the forum sends a notice to the opposite party to submit its version of the case within 30 days after admitting the complaint. After doing proper scrutiny the forum will ask either for filing an affidavit or for producing evidence in the form of judicial precedents, expert opinion, etc.

Steps to follow under Medical Negligence Case

• A complaint must be filed in the State Medical Council – If you are a victim of medical negligence then the first necessary step is to file a complaint against the doctor in the State Medical Council. The complaint can be filed in the state consumer court and a criminal suit can also be brought against the doctor or hospital authorities. 

• • If the main motive behind filing a complaint is to seek monetary compensation then the complaint must be filed in the consumer court in order to finish the case as soon as possible.
  • The consumer courts can suspend the license of the doctor if it is the case of rarest of the rare medical negligence.
• Go to a Patient-Advocate – The other step that proves very useful in medical negligence cases is to go to a patient-lawyer.

• • If there is any breach of duty from the doctor’s side then a patient-advocate can clear this picture in the mind of the patient and ask them to take necessary steps to resolve the matter.
  • The Patient-Advocate can also help the patient in cases if there should be some compensation due to medical negligence.

Step by step procedure 

The following steps must be taken:

• A complaint must be filed with the local police and the State Medical Council.
• If it is filed only with the police, then the police can send the report to the State Medical Council.
• If the report seems appropriate to the Council then it will send it to various other courts under the relevant sections.
• If the case is criminal in nature then it will be against the state versus the hospital or doctor.
• If the council finds that the case is serious and pose a danger to the life of the patient then it can also suspend the doctor’s license for a relevant period of time.
• If the council finds him guilty, the facts and circumstances of the case will decide the punishment to be given to the doctor.
• If the patient is still not satisfied with the judgment then he/she can make an appeal to the Medical Council of India.
• The consumer courts can help the patient in seeking monetary compensation. It should be noted that the consumer courts can only provide you with the compensation it cannot punish the guilty.
• If the complainant is still not satisfied then he can approach the National Consumer Dispute Redressal Commission.

Collection of evidence related to Medical Negligence

The collection of evidence should be like this:

• Collect all the medical records.
• As per the guidelines of the Medical Council of India, the patient should get all the medical records within 72 hours from the date and time of the appointment.

Challenges faced by the victims of Medical Negligence

These are some of the challenges that are faced by a complainant in medical negligence cases:

• If is a time-taking process to decide medical negligence cases. So, sometimes it leads to the de-motivation of the complainant.
• Sometimes, due to the reputation of the hospital, the doctor has more chances of winning the case.
• There are some cases in which the doctor already knows that they have been negligent so they remove all the necessary evidence which creates a problem for the complainant. 
• You need to know about your insurance policy limits because sometimes the insurance company itself rejects the case.

Necessary test to determine Medical Negligence

The name of the test is the Custom Test. 

• In this test, it must be proved that the hospital or any of its staff weren’t negligent in performing its duties. 
• The next thing which should be proved is the method adopted by the concerned doctor was not ethical.
• In most of the cases, the burden of proof lies upon the Complainant but sometimes it shifts to the doctor if there is no proper management done on his part. 

Medical negligence complaint in criminal court

Hospitals, in many cases, are charged for negligence if HIV, HBsAg, etc. gets transmitted due to it. So, if anyone develops such disease during his course of treatment under the supervision of his doctor and the same is proved that it has occurred on account of careless and negligent behaviour on the part of the hospital then the hospital will be held liable for failing to consider the reasonable standards given to them in the form of duty to care and standard of care.

However, if the elements like the motive or intention, the magnitude of the offense and the character of the accused are established then it makes him liable under the criminal law.  

Provisions 

• According to Section 304-A of the Indian Penal Code, 1860,  if a person commits a rash or negligent act which amounts to culpable homicide then the person will be punished with imprisonment for a term which may extend to two years or with fine or both.
• According to Section 337 of the Indian Penal Code, 1860, if a person commits a rash or negligent act due to which human life or personal safety of others gets threatened. The person will be punished with imprisonment for a term which may extend to six months or with fine which may extend to five hundred rupees or both.
• According to Section 338 of the Indian Penal Code, 1860, if a person commits a rash or negligent act due to which human life or personal safety of others gets threatened. The person will be punished with imprisonment for a term which may extend to two years or with fine which may extend to one thousand rupees or both.

Defences 

• Section 80 of the Indian Penal Code, 1860, says that anything which happens as a result of an accident or misfortune and without any criminal intention or knowledge in the doing of a lawful act in a lawful manner by lawful means and with proper care and caution is not an offense.
• Section 81 of the Indian Penal Code, 1860, states that if anything is done merely by the reason that it is likely to cause harm but if the same is done without any intention to cause harm and in good faith in order to avoid other damages to a person or his property is not an offense.
• Section 88 of the Indian Penal Code, 1860, says that no one can be made an accused of any offense if he performs an act in good faith for the good of other people and does not intend to cause harm even if there is a risk involved and the patient has given the consent explicitly or implicitly.

Expert opinion

The Commission cannot constitute itself into an expert body and contradict the statement of the doctor unless there is something contrary to the record by way of an expert opinion or, if there is any medical writing relying on which, the statement can be primarily based. 

The number of medical negligence cases is increasing day by day so expert’s opinion are important in such cases. 

Medical negligence complaint in civil cases 

• The position concerning negligence under civil law is extremely important because it encompasses various elements in it. 
• Under the tort law or civil law, this principle is applicable even if doctors provide free services. Thus, it can be stated that where the Consumer Protection Act (CPA) ends, the tort law begins.
• In cases where the services offered by the doctor or the hospital don’t fall within the definition of ‘services’ under CPA, patients can claim compensation under the tort law. 
• The onus (burden) of proof is on the patient and he needs to prove that because of the doctor’s actions, the injury has been caused to him.

Compensation claim

In Civil liability, the claim for damages is suffered in the form of compensation. If there is any breach of the duty of care while operating or under the supervision of the hospital or any doctor. They are vicariously liable for such wrong committed and are liable to pay damages in the form of compensation. 

If someone is an employee in a hospital then it is the responsibility of the hospital if an employee causes harm to a patient by acting negligently.

In Mr M Ramesh Reddy v. State of Andhra Pradesh[5], the hospital authorities were held to be negligent for not keeping the bathroom clean due to which an obstetrics patient fell in the bathroom and died therein. The amount of compensation which was awarded against the hospital was Rs. 1 Lac. 

Medical negligence cases in consumer courts

All the medical services fall under the purview of the Consumer Protection Act, 1986. After the judgment of the Supreme Court in Indian Medical Association vs. V.P. Shantha[6], this medical profession and services have been brought under the purview of the Act.

In this case, the court discussed the important question of medical negligence i.e. whether a medical practitioner could be said to rendering services under Section 2(1)(o) of the Consumer Protection Act, 1986. 

The following points were laid down:

• Medical Services should be treated as the “services” under Section 2(1) (o) of the Consumer Protection Act, 1986. It is not a contract of personal service as there is no master-servant relationship between them. 
• Contract of service in Section 2(1) (o) cannot be confined to contracts for the employment of domestic servants only. The services rendered to the employer are not covered under the Act.
• Medical Services which are free of charge are not considered under the purview of Section 2(1)(o) of the Act.
• Medical Services which are rendered by independent doctors and are free of charge are under the jurisdiction of Section 2(1)(o) of the Act.
• Medical Services rendered against payment of consideration are also within the scope of the Act.
• The payment of consideration of a medical service is paid by some third party and is treated under the ambit of this Act.
• Hospitals in which some persons are exempted from charging because of their inability to afford or any other financial problems will be treated as a consumer.

Section 2(1)(o) of the Consumer Protection Act defines the ‘deficiency of service’ which means any fault, imperfection, etc. in the quality or manner of performance that is required to be maintained by or under any law or it has been undertaken to be performed by a person in pursuance of a contract or otherwise.

Who is a consumer

According to the Consumer Protection Act, 1986, the consumer is the one who:

• buys any goods or hires any service.
• uses the goods or hires any service with the approval of any buyer or the service provider.
• uses the goods and services to earn a livelihood.

When can a complaint be filed

In the following cases a complaint about medical negligence can be filed:

• The liability of a doctor arises only when the patient has suffered an injury due to his reckless or negligent conduct which was not appropriate according to the set standards of the medical profession.
• He is liable only for those consequences which resulted from a breach of his duties.
• The plaintiff must prove the breach of duty and causation.
• In case there is no breach then neither the doctor nor the hospital authorities can be made liable.
• If the possible causes of an injury is the negligence of a third party, an accident, etc. then it must be proved that the doctor’s negligence was the most probable cause of the injury to discharge the burden of proof on the patient (plaintiff).
• Sometimes, ‘res ipsa loquitur’ which means “the thing speaks for itself” comes into play. In such cases, it can be clearly seen that the doctor was negligent in performing his duties. This discharges the burden of proving negligence on the plaintiff.
• Normally a person is liable for his own acts but when the concept of vicarious liability comes into play when a doctor can be held liable for the acts of other persons who are responsible for the injury caused to the plaintiff.

Who can file a complaint

The below mentioned can file a complaint;

• A consumer or 
• Any recognized consumer association whether the consumer is a member of such association or not, or 
• The central or state government.

A “Recognized consumer association” is a voluntary consumer association, the one i.e., registered under the Companies Act, 1956 or any other law for the time being in force.

Forums in which one can file a complaint

The complaints under the Consumer Protection Act for medical negligence can be filed at: 

Compensation claim

The CPA will not be able to help the patients who availed a doctor’s service free of charge or if he has paid only a nominal registration fee.

However, if a patient did not pay because of some  financial problems or incapacity to pay, they will still be covered under the Act and will be considered to be consumers and can sue under the Consumer Protection Act.

Appeal by doctor 

An appeal against any decision of the District Forum can be filed before the State Commission and if still you are not satisfied then it goes to the National Commission and the last step that can be taken is to file it in the Supreme Court from the National Commission. 

The appeal should be filed within 30 days from the date of the decision.

A doctor can make an appeal in the following cases:

• According to Section 80 of the Indian Penal Code, 1860, if anything happens by accident or misfortune and there was no intention or knowledge and the act was lawful and was being performed in a lawful manner by lawful means with proper care and caution is not an offense.
• According to Section 81 of the Indian Penal Code, 1860,  if anything is done with the knowledge that it is likely to cause harm and if the same is done without any intention to cause any harm and in good faith for avoiding other damage to a person or his property is not an offense.
• According to Section 88 of the Indian Penal Code, 1860, no one can be held liable for an act which has been done in good faith for the benefit of someone and does not intend to cause harm even if there is any risk involved and the patient has given the consent either implicitly or explicitly.

Medical negligence cases in high courts/ supreme courts

In State of Haryana v. Smt Santra[7], the Supreme Court held that it is the duty of every doctor to act with a  reasonable degree of care. However, no human in this world is perfect and even specialists make mistakes, a doctor can be made liable only if he fails to act with such reasonable care that every doctor with ordinary skills would be able to do.

In Achutrao Haribhau khodwa and Ors v. the State of Maharashtra[8], the Supreme Court noticed that the medical profession is very wide and there are a number of admissible courses for the same. Therefore, we cannot hold a doctor liable as long as he is performing his duty with due care and caution. Merely because he chooses any other course of action over another, he is not liable.

In the case of  C.P. Sreekumar (Dr.), MS (Ortho) v. S. Ramanujam[9], the court dealt with a medical negligence case in which the respondent was injured while going on a bicycle. He sustained severe injuries and a hairline fracture of the neck. On considering the various options available the doctor chose to perform hemiarthroplasty instead of internal fixation procedure. The surgery was performed the next day. The respondent filed a case against the doctor for not adopting the internal fixation procedure for the injury. The Supreme Court held that the appellant’s decision for choosing hemiarthroplasty for the person who is 42 years of age was not unacceptable as to make it a case of medical negligence.

In Vinod Jain v. Santokba Durlabhji Memorial Hospital & Anr.[10], the Supreme Court has mentioned the factors to be considered while establishing the liability in medical negligence cases. In this case, the appellant challenged the NCDRC in the apex court i.e. the Supreme Court of the country. The Supreme Court upheld NCDRC’s judgment and made the below-mentioned observations:

• A doctor cannot be said to be negligent if his acts are in accordance with the set guidelines, merely because a body is there which holds a contrary view.
• A doctor need not have special expertise in medicine and it is enough if he exercises ordinary skills that an ordinary man of that profession would be able to do.
• A doctor cannot give assurance for any recovery as it is not in his hands and he can only try his best. The only assurance he can give is that he holds requisite skills in the profession and while undertaking this he should perform his duties as a reasonable man of the profession and in accordance with the standard of care in the medical profession.  

Medical negligence cases in India 

Medical Negligence cases

In the case of Dr M. Kochar vs Ispita Seal[11], the National Consumer Dispute Redressal Commission discussed the issue of failure in the IVF procedure. The patient filed a complaint against the doctor for medical negligence for the failure of this procedure. The National Commission held that no success in operating a patient cannot make a doctor liable for medical negligence.

Supreme court judgement on medical negligence

Listed below are some of the landmark supreme court judgments on medical negligence:

• The landmark judgment in medical negligence cases and the first judgment that comes into our mind with the highest amount of compensation granted till date is Dr. Kunal Saha Represented By Sri … vs Dr. Sukumar Mukherjee And Ors.[12] which is famous as the Anuradha Saha Case. In this case, the wife was suffering from drug allergy and the doctors were negligent in prescribing appropriate medicines for the same which ultimately aggravated her condition and led to the death of the patient. The court held the doctor liable for medical negligence and awarded compensation amounting to Rs. 6.08 crore.
• In the case of V.Kishan Rao Vs Nikhil Super Speciality Hospital[13], where a lady who was to undergo the treatment for malaria fever was treated differently. An officer in the Malaria Department filed a suit against the hospital authorities for performing the treatment of his wife negligently, who was undergoing the treatment for typhoid fever instead of malaria fever. The husband got the compensation of Rs 2 lakhs and in this case, the principle of res Ipsa loquitor was applied.
• In Jacob Mathew .V. State of Punjab[14], the Supreme Court held that in some cases doctors are bound to take make difficult choices. Sometimes situations make them go for things involving greater risk because of higher chances of success in taking that decision. And there are some cases in which there is lesser risk involved and higher chances of failure. So, the decision will depend upon the facts and circumstances of the case.
• In Juggan Khan v. State of Madhya Pradesh[15], the appellant who was a registered Homoeopathic medical practitioner. After seeing an advertisement a woman went to him for the treatment of guinea worms. After taking the medicine prescribed by him, she started feeling restless and even after the administration of some antidotes, she died in the evening. The appellant was convicted for murder under Section 302 of the IPC. The court held that it was a negligent act to prescribe poisonous medicines without proper checking and knowledge of the same.
• In A.S. Mittal and another V State of UP and Others[16], the Apex Court dealt with the case of a mishap in an ‘Eye Camp’ in Uttar Pradesh. In the camp, about 108 patients were operated out of which 88 underwent cataract surgery. Out of all these people 84 suffered permanent damage to the eyesight. It was found that this mishap was due to normal saline which was used in the operations. The court held the doctor liable as this amounts to medical negligence. A PIL was filed in this case under Article 32 of the Constitution. 
• In the case of Poonam Verma v Ashwin Patel and others[17], the respondent had a diploma degree in Homoeopathic Medicine and he administered some allopathic drugs to a patient who was suffering from high fever. Subsequently, the patient was shifted to a nursing home where he died. The court held the respondent liable as he was registered for providing Homoeopathic treatment but not under the Allopathy system and his actions amounted to medical negligence. The Supreme court has also defined the term “Medical Negligence”.
• In Spring Meadows Hospital and another v Harjol Ahluwalia[18], a child who was suffering from typhoid was admitted to the appellant’s hospital. The nurse gave an injection to the child after that he collapsed. After taking all the possible steps the child was shifted to AIIMS. The doctors there informed the parents about the critical condition of the child. The child had a cardiac arrest because of the overdose injection that was given to him. The court held the doctor and the nurse liable to compensate for this negligence. 
• In Bhalchandra Alias Bapu & Another v. State of Maharashtra[19], the Supreme Court opined that while negligence is an omission to do something which a reasonable man would do or doing something that a reasonable man would never do; criminal negligence is the gross neglect to exercise reasonable care and precaution to guard against the public as well as against an individual.

Conclusion

Though the doctors are seen as God and patients believe that they will get better after the treatment and that they would be healed by the treatment provided. But sometimes it so happens that even the doctors make mistakes which cost a lot to the patients in so many ways. Also, in some instances the mistakes made by them are so dangerous that the patient has to face problems and undergo immense sufferings.

The usage of equipment and medical tools in health care sector should be made  with due care and caution as it can lead to an injury to the consumer which may further result in the filing of a complaint against the doctors and the other authorities involved. Yet, there is no provision which can make the manufacturers of such unfit equipment liable for the damages.

Another important concern is that the services which are rendered free of charge are excluded from the scope of the Consumer Protection Act, 1986. This creates a problem for patients who suffer damages.

People are losing faith in the medical profession due to some serious medical negligence cases which have made them disabled for their remaining lives. Some serious introspection and analysis are required to be done for the Medical profession. It has utterly failed in self-governance. The medical ethics need to be reformed and developed so as to serve with complete righteousness.

References 

[1] 2010

[2] 1995 ACJ 1048

[3] 1969 AIR 128

[4] 1998

[5] 1975 36 STC 439 AP

[6] 1995 SCC (6) 651

[7] 2000

[8] 1996 SCC (2) 634

[9] 1996

[10] 2018

[11] 2011

[12] 2011

[13] 2010

[14] 2005

[15] 1965 SCR (1) 14

[16] 1989 AIR 1570

[17] 1996 SCC (4) 332

[19] 1968 SCR (3) 766

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This article is written by Ashish Sharma of Rajiv Gandhi National University of Law, Patiala. The author discusses the future and prospects of Artificial Intelligence.

Introduction

In today’s progressing technology savvy world, artificial intelligence (AI) has been gaining intense and widespread momentum. The artificial intelligence systems with the incorporation of complex technologies are capable of making astounding inventions in a matter of time. AI-enabled software systems have transgressed their ability to perform simple calculations to creating complex creative works such as poetry, art etc. This poses the question that whether these works are also capable of affording special status under Intellectual Property Rights Law like any other work produced by a human being.

What is Artificial Intelligence

In our common saying, AI is the ability of a computer system to take the decision on its own. According to Mr. John McCarthy, artificial intelligence basically is the notion of a program, processing and acting on information, such that the results are parallel to how an intelligent reasonable man would respond in response to similar input. However a few years later of the introduction of AI technology, the question arises whether the output rendered is the result of its own intelligence or of its creator. Artificial intelligence systems gathered the attention of the legal authorities when computer work was denied copyright by Registrar of Copyrights on grounds of indeterminate legal status.

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Artificial Intelligence and Copyright

Copyright is a legal right or an intellectual property right granted to creator of original work, allowing him or her exclusive rights for distribution and use. Generally, two essentials features are to be fulfilled by the work to come under the ambit of copyrights. They are:

• Work should be in tangible form; and 
• It should be original.

Copyrights are generally given for the artistic and literary works. Since creation of literary works is one of the contemporary areas of AI’s applicability, so the study of copyright in light of Artificial intelligence becomes relevant. The understanding of the same can be done through the following case laws:

• Burrow Giles Lithographic Co. v Sarony

In this case, the essential question of the matter was that can copyright protection be granted to a photograph. This case was of importance as in this case the court addressed the dichotomy between the mechanical and creative labour. The Court, in this case, discussed the possibilities of granting copyright protection to the product which is the output of the machine and held that purely mechanical output is by itself not creative. Thus, if such a strict approach like this is to be applied to AI systems then it would be difficult to grant copyright protection to the work created by them.

• Bleistein v Donaldson Lithographing Co.

The court in this case clearly differentiated between the work of the human and something artificial. Justice Holmes in this case, with the majority explained the uniqueness of human personality and demanded the same as the important thing to be eligible for a copyright. The court in this made its stand clear by using the word “something irreducible” which meant that there was no scope for anything to be granted copyright which was not a product of human’s creativity.

• Alfred Bell & Co. v Catalda Fine Arts

In this case, the court witnessed a softer approach towards giving the copyrights. The Court held that for the work to be original, it must not be fully copied or plagiarized from other artistic works. The court even held that any accidental variation may be claimed by an author as own. Therefore this judgement gave the right to claim copyright of the output generated through the AI system as they are not copied. This clears down the ambiguity of stance that prevails around the grant of protection to works of AI systems. However, the lack of definitive stance also affects the right of holders.

Copyright Protection and AI

The debate regarding the ambiguity of stance continues even after the various judgements. The National Commission on New Technological uses of Copyrighted Works in its report stated that, “the capacity of AI with capacity to create independent work is not practical it is theoretical. The Office of technology Assessment had a completely different stance and suggested that, “AI works can be considered as legitimate co-authors of copyrighted works”.

Lovelace one of the sharp critics against grant of copyright propounded that machine lacks creativity because of bounded behaviour. The logic of her argument that creativity is something which does not follows the usual routine. In one of the case the Court was faced with a question whether the work can be registered in the name of Jesus and held that non-human nature of the source of a work cannot be a bar to copyright. The judgement favoured granting protection to the work done by AIs as they are non-human in nature. 

Even if the countries allows to grant copyright to AIs works then to whom the copyright should be granted as current law requires legal personhood to be a right holder. However, there exists a loophole as if the AIs system is sold or purchased then copyright should be granted to the buyer or creator.

Countries like England, New Zealand favoured the creator in such a case. The major problem in the present system is that who would bear the criminal liability of AIs. According to the current stance, the criminal liability falls upon the creator or programmer despite his actus reus and mens rea. Therefore the present law requires some immediate consideration for removing the loopholes.

Artificial Intelligence and Patent Laws

As previously illustrated, AI systems are often used in every field to simply and executed the basic functions and reduce human effort which increases the interaction between AI and patent laws in the technological world. The huge development of AI systems from a technological viewpoint poses a new and challenging question from a legal point. 

A patent is an especial right granted to an invention. The invention can be understood as any process or product, which provides novel way to the users of performing any action, including something which offers new way of solving technical problem. Anyone holding such an exclusive right is entitled by law to exclude others from selling, making or even using the invention patented for a limited term.

Therefore such right leads to the guaranteed monopoly to the benefit of the original inventor. The result and functions which are performed by the AI-enabled systems are ultimately the outcome of the human cognitive application process. 

Under United State current law, an inventor is an individual or group of individuals who discovered the subject matter. This definition eliminates the inferences which support the premise that the U.S. sought to include inventions or possibility of inventions being made by anyone besides humans. However, the increasing AI systems involved in the invention process demands legal perusal. European Union attempt to encourage the nations to expand their national laws to accommodate the copyrightable work produced by computer and other devices under the category of intellectual creation can be witnessed as a faint perusal.

The European Parliamentary Committee noted that attention to patent rights is required particularly speaking of AI systems as it can be easily forecasted that in times to come AI systems could surpass the human intelligence in terms of performing functions and can pose challenges to the present system. 

The autonomy enjoyed by such systems allows them to perform functions without any human intervention and allow these machines to be employed at an early stage which can help in making a new discovery. 

The three factors an invention should hold to be eligibility to grant patent are:

• Possess novelty (should be different from the existing one);
• Should be capable of industrial application; and 
• It should involve an inventive step.

The artificial intelligence technology must advance to equip systems with human-like intelligence so that judgement on new situations can be easily made them. Furthermore, the Court in Bilski v Kappos denied patents to program simply because what they perform is mechanical and not inventive.  This is important because AI primarily runs on computer programs devised to perform certain functions.

However in countries like India where rigid requirement of computer programs in addition with novel hardware being eligible for patent can be removed, if AI-enabled systems create software which entails practical utility but perhaps it should be capable of industrial application to pass the patent test. Current laws and guidelines on a general note to be streamlined in a manner which allows invention by AI to be granted patents. 

Invention and Inventor New Dimensions

Inventions consist of many important elements in determining whether patent should be granted or not and also certain requirements are to be fulfilled when one is to be classified as an inventor. In United States for something to be understood as an outcome of invention, it must go through the stage of conception. According to which a permanent idea has to be conceived in the inventor’s mind before putting a thing into practice. If something is developed not based on conception then such a thing cannot be termed as an ‘invention’ and as a result, also a person cannot be termed as an ‘inventor’.

The most persuasive reason argument behind the inclusion of AI’s in ’inventor’ category is the abolition of ‘flash of the genius test. Even there can be a collaborative invention which would acknowledge both the computers and human parts as inventors. But this cannot be applied because of the lack of legal personality of the computers under the present law. As patents are provided to attach honour to the invention and protect the rights of the inventor.

The opponent of the idea of providing patents to the invention of AI’s systems put forward that computer lack of such attachment makes them incapable of having strong opinions regarding the use of their invention which defeats the purpose of granting patent protection.

Suggestions

• Uniform Recognition: There should be uniform recognition of the artificial intelligence system. Artificial intelligence systems carry recognition only in few selected countries such as New Zealand, United States of America and England. All nations must come forward and carry on an initiative and take a positive step towards recognition of AIs.
• Lacunae in Criminal liability: According to the present system of law, acts of AI are copyrighted by its creator. So if any criminal act is done by the system then the creator is held liable for the actions sometimes of which he is not aware of. Such a big fault in the law should be fixed as it would have a great impact upon the life of the creator and provide a specific action on the AIs in such cases. For example destruction of the artificial intelligence system.
• Passage of different Act: Nations should take positive initiate and pass a different Artificial Intelligence Data Protection Act as in today’s world AIs are performing human-like functioning in every sphere. It would not be astonishing in future if they perform better functions then human. To have a track of the same, separate legislation of AIs should be drafted. The act framed can provide proper remedies for both the civil and criminal offences as it would help in removing the unnecessary liability of the creator.
• Clearance of Ambiguity: The confusion regarding the application of patent laws should be removed by legislators with the advent of AI-enabled systems. With widespread expanse of the solutions generated by artificial intelligence, protection of the sources becomes an integral question for the countries.

Conclusion

The current phase of law regarding artificial intelligence is problematic where recognition of work generated by AIs is under ambiguity. So there is a need of some rigid, proper, structured and clear legislative rules to ameliorate the problem. With the widespread usage of artificial intelligence techniques in every day to day life there arises an immense need of implementing the proper guidelines urgently in the country.

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This article is written by Akash R. Goswami, student of the faculty of law, Aligarh Muslim University. In this article, he has discussed the Parliament Privileges in India, its types, freedom of speech with respect to Parliament and other aspects of Parliamentary privilege in Indian Parliament.

Introduction

The privilege may be defined as an exceptional right and exemption. The expression “Privilege and Immunity”, under the Constitution of India and in the arena of Parliament, donates certain special and exceptional rights of Lok Sabha and Rajya Sabha or its individual members who are generally accepted as a necessity for the implementation of constitutional functions.

In the case of Raja Ram Pal vs. The Hon’ble Speaker Lok Sabha[1]. Supreme Court in their own view defines the word “privilege” that it is immunity or a right provided to the specific person. In another way around what a person can not do in general, now he/she eligible to do a certain act.

For example, being an Attorney General you have the right to watch any proceeding of any house, but not in the case of an ordinary person. Privilege consists of the known laws, customs and usage of Parliament. Thus, the term privilege is referred to as the special rights that are available to a different extent and in various forms for the members of Parliament throughout the world. However, the term applies to certain immunities enjoyed by both the houses of the Parliament collectively, and members of each house individually.

It is the privilege conferred on any member of parliament that he is immune from whatever he will say on the floor of the house, and in case of detention whether in civil or criminal, no member shall be made liable and detained 40 days before and 40 days after the session of the house. But there is a condition to comply with the availment of these privileges. If a person ceased to be a member of Parliament, then the privileges are called off. So in order to enjoy immunities, one should have to be a member of any house of Parliament.

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Who Enjoys Parliamentary Privileges

Sir Thomas Erskine define the expression “Parliamentary Privilege” as the total sum of the specific rights enjoyed by each House of Parliament collectively is a constituent part of Parliament,  and by the members of every house of Parliament one by one, without which they could not proceed with their functions, and which exceed those possessed by different bodies and people.

The privileges only given to the members of the Parliament, and also conferred on the person who actively participates in any of the committee and in the function of the parliament, just like it incorporates on Attorney General and union ministers but in case of President, even though he is a part of Parliament, does not entrust with parliamentary privileges.

Article 105

Privileges, power, right etc for the two houses of Parliament individually and of the members and committees thereof-

1. Comes under the concern in the provisions of the constitution and the rules, regulations and standing circulations which mandates procedure and conduct of Parliament, and it shall be necessary that freedom of speech in every house of parliament provided without any checks and balances. As if there is restriction then the representative will hesitate to express their feelings, which is not the aim of the Democratic form of Government. 
2. No member of the Parliament should be made liable for any proceeding initiated against him in the court in respect of anything said, vote which was given by him or any committee thereof, and no person should be made liable in context to the publication by him or under any authority empowered by either house of Parliament of any report, vote, proceeding or paper.
3. In another sense, the privileges immunity and power of each of the two houses of Parliament and of its members and committees thereof, shall be such as may define time to time and provide by the Parliament itself and through established procedure by law, and, until so defined shall be a matter of concern for those of that house and of members of that house and for its committees immediately before the date of initiation of section 15 of the constitution by the (forty four amendment) act, 1978.
4. The above mentioned constitutional provisions of clauses (1),(2) and (3) shall apply in relation to the person who by virtue has the right to freedom of speech, and otherwise to take part in proceedings of the Parliament of any of its committee thereof, the clauses will apply in relation to the Parliament.

Article 194

1. This subject comes under the provisions of the constitution and rules, regulations and standing orders which regulates the procedure of the State Legislature, and there shall be freedom of speech for the member of the legislature in every state.
2. No member of the state legislature shall be compelled for any proceeding initiated against him in any court of law in regards to anything utter or any vote given by him or her in the state legislature and any of its committee thereof, and no person shall be made liable to prosecute in the context of the publication by him or under any authority of a house of state legislature of any paper, vote, report, or proceedings.
3. In another sense, the privileges and immunities of the house of the state legislature, and of its members and the committees of the house os state legislature shall be such as may be defined by the state legislature from time to time through established procedure of law, and, until so define, shall be the subject matter to those of that house and of its member and its committee thereof, immediately before the section of 26 of the constitution by the (forty four amendment) act,1978.
4. Above given constitutional provisions of clauses 1,2 and 3 shall apply in relation to the person who by virtue of this constitution has the right to freedom of speech, and the other way around to take part in the proceedings of the house of the state legislature and any of its committee thereof as they pertain in relation to members of the state legislature.

It was observed from the above two articles of the Indian Constitution that the position of the house of the Parliament is identical to the position of the state legislature. Therefore, Article 105 apply, mutatis mutandis, to the state legislate as well.

Types of Parliament Privileges

Collectively enjoyed by the member of Parliament

• No person whether a member or a stranger can be arrested and no legal proceedings can be initiated against him either criminal or civil, within the premises of the house of the Parliament and without the approval of the proceedings officer of that particular house.
• No court shall have the right to investigate the proceedings of any house of the parliament and any of its committees.
• Parliament shall have the power to exclude guests or visitors from the meeting of the house or also have the power to conduct a secret meeting if the matters of national importance or any matter of public importance.
• Parliament shall have the right to penalize its member or an outsider for committing the breach of its privileges. And for contempt by reprimand, admonition or imprisonment and also have the right to expel and suspend in case of a member.

Individually enjoyed by the member of Parliament 

• When a parliament is in session, a member of Parliament or a person on whom this right and immunities conferred may refuse to appear in the court of law or to present any evidence in court.
• Members of the Parliament cannot be arrested when the sitting of the Parliament in session and 40 days before the commencement and 40days after the end of the session.
• No member shall be made liable to any proceeding in any court for whatever he or she said or any vote was given by him or her during the session in the Parliament or its committees.

Freedom of Speech

The spirit of the parliamentary form of democracy is frank free and valiant discussions in the house of the parliament. For the authority like parliament freedom of speech plays a very indispensable role that provides opportunities to the members of the houses to express their feelings without any sort of fear, hesitation, being penalized for offences such as defamation, innuendo, etc.. The recognition of the right to freedom of speech in parliament came to known in the seventeenth century in the case of SirJohn Elito.

The council of state i.e. Rajya Sabha in its XII report provides that a Parliament can be asked a question in any court of law or any place outside the parliament for making any disclosure or for any information display since it will amount to inference with the right to freedom of speech of that member. Subsequently, Lok Sabha has also propounded that it will amount to contempt of house or breach of privilege if any suit is initiated against any member in a court of law for what he/she spoke on the floor of the house.

The Supreme court case of Tej Kiran Jain V. Sanjeeva Reddy held that “once it is recognised that the parliament was in session and its business being transacted, anything said during the clause of that transaction was completely immune from any proceeding in any court of law”.

Article 105, clause (1), expressly protects the right to freedom of speech in Parliament. It provides that there shall be complete freedom of speech in Parliament. Clause (2), further states that no member of each house of the Parliament shall be made liable for any proceedings in any court of law in regards to anything said or any vote given by him or her in parliament or any committee of parliament.

No action is initiated against the member, for the offence of defamation or in the context of words said in Parliament or its committees, neither civil nor criminal. No imprisonment is there for the mere spoken words by the immunity, it extends to votes, as clause (2) specifically provides that any vote given by him/her in parliament or committee thereof. Though it can be concluded that, the freedom of speech shall extend to other conducts which are done and having a nexus with proceedings of each house, such as, for notice of questions, motions, reports of committee and the resolutions.

It is important to consider that clause (1) of article 105 comes under the subject to the provisions of the constitution and to the standing orders and rules for the regulation and procedures of the Parliament. The word regulation for the procedure of Parliament comes in clause (1) should be read in that manner so that it applies to provisions of both i.e constitution and the rules and standing orders and circulations.

Freedom of speech in parliament becomes concern matter with provisions of the constitution relating to the procedure and regulation of the Parliament i.e subject to the article envisaged in part V contain article 107 and 121. Thus, for instance, freedom of speech in Parliament would not allow a member to talk about conduct and manner of any judge of the high court or Supreme Court. Likewise, the freedom of speech comes under the subject to the procedure or rules of the house, such as the use of unparliamentary conduct and unparliamentary language.

The freedom of speech described under article 105 (1) having a peculiar interest and different from that right which a citizen enjoys as a fundamental right provided under Article 19 (1) (a). The fundamental right, freedom of speech, does have the power to protect an individual completely for what he says. The right has come under clause (2) which is subject to reasonable restrictions of article 19 of the constitution. The term freedom of speech which used for article 105(1) provides that no member of Parliament shall be made liable to any proceedings initiated against him, whether civil or criminal, in any court of law and for the statement made in house while debating in either house of Parliament or any committee thereof.

The freedom of speech provided under article 105 cannot, therefore subject to reasonable restriction likewise it is imposed in article 19 (2). Clause (1) and (2) of Article 105 gives protection to the member of Parliament for what is said within the boundaries of Parliament and not what a member of Parliament may say outside. Similarly, if a member publishes his speech outside the boundaries of Parliament, he will be made liable if the speech found to be defamatory in regards to some person.

The freedom of speech given under article 105 (1) and (2) refers, shall be only available to the member of the Parliament when the session of the Parliament is going on. Therefore, if an order of detention, which refrains a member from attending a session of the Parliament (no occasion shall be raised to said that the right has been invalidly annexed. 

Article 105 (2) confers privileges, in respect of anything said on the floor of the Parliament. The word “anything” is considered as the widest concept and it is parallel to as a whole. The only restriction arises from the word in the Parliament, which means during the session of Parliament and in the course in the transaction of the Parliament. Once it was proved that Parliament was in session and its business was carried out, anything uttered during the course of that business was completely immune from proceedings initiated against the member in any court. This immunity is not absolute but works with respect to the Parliament.

It is one of the alluring features of the parliamentary form of government that the people’s chosen representative should be free to express themselves and their views without any fear of intimidation or any legal consequences. What they said comes only under the purview of the discipline and regulation of the Parliament, the good conduct of the members and the control of the proceedings by the presiding officer. The court has no right to say and interfere in the matter of the Parliament and should really have none.

In a controversial case involving former Prime Minister, several union ministers, members of parliament and others, the court held in the case P.V. Narsimha Rao V. state JMM Bribery[] that the privilege of immunity to exempt the member from the court proceedings in article 105 (2) should be extended to cover the scope of bribes considered by the member of parliament for the purpose of voting in the parliament in a particular form.

The three judges of supreme court did not consider the decision to be right which was given by two judges and explained the expression “in the context of” regarding article 105(2) shall be provided a wide meaning so as to understand an act having a series of chain or connection with the speech or a vote submitted by a member in the parliament or any committee thereof. If interpreted, it would cover within its core, acceptance of a bribe by the member of parliament, further extending to make a speech or to cast his/her vote in parliament or any committee in a particular way.

In this manner, the fix taker MPs, who had cast their vote in parliament against no-confidence motion were held qualified for the security of Article 105(2) and were not answerable in court for supposed conspiracy and agreement. The Court additionally held that the bribe-taker MP, who did not decide on the no-confidence motion was not qualified for protection under Article 105(2).

To the pay off supplier MPs, it was held, the protection under Article 105(2) was not accessible. The court additionally decided that the Lok Sabha could make a move for breach of benefits or disdain against the alleged bribe providers and against the bribe-takers, regardless of whether they were a member of parliament.

The court was anonymously said that the member of parliament who takes a bribe, or who gives bribe but he/she does not have to participate in the voting could not claim the privileges conferred upon them from court proceedings under Article 105 (2). The decision of the Apex court has imploded so much attention of the general public and dissatisfaction among that the review petition is pending in the court.  

Some limitations are also there which should be followed in relation to claim privileges

• Freedom of speech should be according to the constitutional provisions and subject to the procedures and rules of the parliament, provided under article 118 of the Indian constitution.
• Article 121 of the Indian constitution confers that, the member of the Parliament is not allowed to discuss the manner and the judgement given by the judges of the supreme court and the high court. But, even if this occurs, it is an internal matter of the parliament and the court has no right to interfere in it.
• No immunity and right could be claimed and held back by the members for anything which is said outside the proceedings and premises of the parliament.

Right of Publication of Proceedings

Clause (2) of Article 105 (and article 194) expressly provides that “no person shall be compelled to made liable in regards to the publication by him or by under the authority of either house of the parliament for any report, paper, journal, vote or proceedings”.

Therefore, the protection did not address the scope of publication made by the person without the authority of any house of the parliament, however, Common law renders the defence of qualified privilege for fare and exact official reports of proceedings of the parliament, published in a newspaper or as here.

In Wason v. Walter C.J. Cockburn, observed that it was of public sovereignty and comes under the subject to national importance that parliamentary proceedings should be communicated and displayed to the general public, which has an immense interest in knowing was happening in parliament. But to provide an incomplete report or a detach report which contain disconnected part and partial information of proceedings published with the intention to injure individual character will be disentitled to protection. A similar law is also applicable in India.

The Parliamentary Proceedings (protection of publication) Act, 1956 provides that “not a single person shall be compelled for any proceedings initiated against him, either civil or criminal, regarding the publication of the proceedings, in any court of law, for a substantially true journal and report of the proceedings of either house of the parliament until or unless it has been proven that the publication was made with malice intention”. Later the act was deleted during the time of emergency in 1975.

Article 361-A provides that “protection of publication of proceedings of parliament and state legislature” under clause (1) of this article empowers that no person shall be made liable to any proceedings initiated against him, either civil or criminal in any court in regards to the publication made by him in any newspaper of a substantially true report of any proceedings of any house of parliament or the state legislature assembly, or as the case may be, unless the publication made by the member is proven to have been made with the malafide intention.

Moreover, it is also provided that notwithstanding under this clause shall be complied with the publication of any report, paper, vote or proceedings and securely held session of the parliament or as same as the case in the state legislature. Clause (2) provides that clause (1) will apply in relation to the right of publication of reports and protects it broadcast, not detached part of any proceeding of parliament through wireless technology, and part or any service which will broadcast by the member in any platform or station. And insense of agency, it should be viewed as the agency who have reported material to be published. It is further stated in this article, the newspaper includes a news agency which contains report material to be published in a newspaper.

Other privileges 

Clause (3) of article 105, after some constitutional amendment declares that the immunity and right of every house of the parliament, its members and committees shall be such as furnished by parliament from time to time and until it is done by the parliament, which it has not yet been done, shall be dated back on 20th June 1979 i.e from date of initiation of section 15 of the (44th constitutional amendment) act, 1978.

Before this amendment, clause (3) provided that the parliament gives the immunity of each house and its members shall be similar as the house of commons in England at the time of commencement of the constitution. This position till 20th June 1979 was in use and apply in relation to the earlier provision, it is still relevant to depend on the laws as it has been denoted to the English laws. A form that views it may be concluded that there are some privileges that may not be claimed by the parliament of India.

For example, the immunities for access to the sovereign, which is carried by the House of Commons trough it presiding officer to have all the time access for that particular right to the sovereign through their chosen representative can have no value in India. Similarly, a general warrant of arrest given by the parliament of India can not subject to be regarded as a court of record at all in any sense.

Also, the right of the two houses of the parliament, unlike the immunities of the house of commons and house of lords in England are completely identical. To every house of parliament, accordingly, entrusted the right, which is empowered by the House of Commons in the United Kingdom.

Freedom from arrest

It given under this right, no member of parliament or state legislative assembly shall be arrested or detained for civil proceedings initiated against him during a period of 40 days before and 40day after the session of the house. If a member is imprisoned during this period, he should be set free so that he may be able to attend the session of the house.

This immunity does not cover the circumference of arrest or imprisonment on a criminal charge or contempt of court or in preventive detention act. However, in case if a member is arrested, rule 261 of Lok sabha set forth the duties of the detaining body to provide information to the house to which the member belongs to, also provide the reason for his/her arrest or detention, also specified the time of his/her arrest, the place where he will be confined or imprisoned and the period how long that particular member will be detained or arrested.

It has been observed in case of K. Anandan Nambiar V. chief secretary governor of madras that the matter of the parliament does not enjoy any special or specific status as compared to an ordinary citizen of this country in regards to legally fair orders issued for detention purposes.

Freedom from appearing like a witness

The member of the parliament has the special right conferred on them which enables them to not attending court as a witness. They are provided complete right to attend the meetings of the house and perform their duties without any interference while exercising their duties from the court.

Right to regulate internal affairs

The house has the special right to manage and control its own proceedings. The governor has entrusted with the power to call the session of the legislature of the state. But the governor does not have any constitutional right to give orders to the presiding officer about the manner and conduct in which the proceedings of the house should be carried out.

The transaction of the business carried out in the house should be followed according to the rules of the parliament, which are provided by the house itself. In order to strengthen this right, Article 122 (in case of state legislative assembly) expressly provides that the constitutional value or any proceedings shall not be called in question on the ground of any alleged irregularity of procedure or no officer or member of parliament in whom these powers are conferred by virtue of the constitution for mandating the procedure or the conduct for the business transacted out in the parliament or for maintaining orders in parliament shall become under the subject to the jurisdiction of any court in respect of the power empowered by him.

Right to exclude strangers

The right to exclude visitors or strangers or non-members and held a secret session was a tradition of the house. The objective behind this to avoid the act of threatening the member as the visitor may attempt from galleries to interfere in the debate going on.

Rule 248 of the Lok sabha grant the power to the presiding officer, whenever he deems fit, of order to exclude strangers from any part of the house and when the house conducts the secret meeting no guest or non-member is allowed to present the house, lobby or galleries of the house. The only exception and the member of the council of states and the person authorized by the presiding officer should be present.

Parliamentary privileges and fundamental right

In the case Gunupati Keshavram Reddy V. Nafisul Hasan, the home minister was detained at his Bombay residence under the warrant directed by the presiding officer of the U.P legislative assembly for the contempt of the house of the state legislature and was fled to Lucknow and was house arrest in a hotel under the supervision of the presiding officer. While filling for a writ of habeas corpus on that very that his detention was infringed and violates the article 22(2), the Apex court quashed the detention and gave orders for his release as he had not been produced before a magistrate within 24 hours of his arrest as given under Article 22.

This decision, therefore, provides that article 194 (or 105) came under the subject to the fundamental right guaranteed under Article 22(2) in part III in the constitution of India. 

However, in case M.S.M. Sharma V. S.K. Sinah[], it was struggled by the appellant that the immunities conferred on the house under article 194 are subject to the provision of a fundamental right which is envisaged in part III of the constitution. In favour of his allegation, the petitioner relied on the supreme court’s decision given in the case Ganapati Keshavram reddy V. Nafisul Hassan.

But, in M.S.M. Sharam’s case, the Supreme Court held that in case of dispute between Fundamental right under Article 19(1)(a) and the immunities conferred under article 194(3), in that situation fundamental right always occupy the place of superiority and will prevail over the privileges conferred on the parliament and its members, committee thereof. As in the context of article 21, on the facts, the court did not find any infringement of fundamental rights.

Under article 143, the supreme court enlarged the proposition laid down in the M.S.M. Sharma case held that:

We are not in the opinion that it would be correct to read the majority judgment as laying down the general idea that whenever there condition of imbalance between the provision of part V of article 194(3) and any provision of the fundamental right conferred by the part III, the fundamental right will also remain supreme over the other. The unanimous decision, therefore, has to be taken to settle only that article 19(1)(a) would not apply and article 21 would prevail.

There is a rule that every house provides for a committee of privileges. In case of breach of privilege or contempt of the house is in the question, is referred to the committee of privileges. The committee shall have the power to summon or gives direction to call the members or stranger before it. Refusal to present in front of the house or to answer or knowingly gives the misleading statements is itself considered as the contempt of the house. The committee’s recommendations are given to the house which discusses them and their conduct and regarding to this give their decision.

Parliamentary privileges and law courts   

There is one more cornerstone to be achieved by the judiciary. The dispute between the legislative privileges of the houses and the court of the law came to be resolved by the supreme court of India  in the reference case, which is popularly known as the Keshav Singh’s case[] or U.P. Assembly case.

In this case, one person named Keshav Singh who was not a member of U.P. Assembly, published, circulate and printed a pamphlet. The presiding officer of the U.P. Legislative Assembly admonish him for the contempt of the house and committing the breach of the privilege of the member Mr Narsingh Narain Panday. On the same day, Mr Keshav Singh, who was present in the house, by his delinquent act, committed another contempt in the house. The speaker after that, given an order that Mr Keshav Singh should be detained and put behind the bars. A warrant was issued in this regard for his detention in jail for a period of 7 days and he was confined. 

Mr. Soloman, his council, filed a writ petition under section 491 of Cr.P.C. along with article 226, a Habeas Corpus petition coupled and alleged that his detention in jail was illegal, unjust and lack of legal merit because he was not given an opportunity to defend himself and there was an infringement of natural justice in other word is was an ex-parte decision. The petition was taken under consideration by two judges of Allahabad high court which gave the order to grant the interim bail to Keshav Singh and after that he was released. But the decision of the case was pending and would be decided on the merits and evidence provided in the case.

On the judgement given by Allahabad high court, the state assembly, by a resolution took the decision that the two judges, Mr Keshav Singh, and Mr Soloman have committed contempt of the house and order that the Keshav Singh must be immediately taken back into the jail and the two judges and the council of Mr Keshav also brought into custody before the house.

At this, the two judges and the advocate, by means of separate petitions lodged and move to the high court, under article 226 (which empowers the High Court to issue writ) contended that the resolution appeared to be the content of court at the very first sight and it should be set aside and its implementation would be stayed by temporary order.

The petition was considered by the full bench of all the 28 judges of the Allahabad high court. Later court gives the order to grant the stay for the implementation of that resolution. The Assembly after that brings some modification in its order and the warrant against the two judges which was initiated by the house was withdrawn, but the house asked the judges to summon before it and explain their conduct. The judges on that write an application and moved before the court against the modify order of house and the court again granted the stay for the implementation of the order.

At this point, the President refer this matter to the supreme court, invoking the provisions of Article 143(1), for using its advisory power, which provides that in the matter of law if any question is unanswered and he needs to seek advice then in that case he can rely on the judges of article supreme court and the high court. The main questions arose to be were-

1. Whether the state legislature is the sole and exclusive judge of its privileges and whether the legislature is competent enough to punish a person for its contempt even outside of the legislature?
2. Another question was whether the high court who consider the petition of habeas corpus challenging the validity of the detention of a person given by the legislative assembly under a general or unspeaking warrant has committed contempt of the house?

The supreme court given the judgment and express their support with a great sense of majority as in ration of 6:1 and held said that two judges did not commit contempt of house, as under article 226, which empower every high court of India to issue the and adjudicating the writ petitions. And the court has the power to investigate and have a preview of judicial review to check whether the detention of that particular person is legal or not.

The Judges further said that in India The Court shall have the power to check the detention and in that context, they have an option for judicial review to determine the question of the detention valid or order of detention by state legislative assembly, under the general or unspeaking warrant. 

When we refer to Courts in England, in their case Court are not allowed to reconsider the judgement moreover, they don’t have judicial review power to check the validity and legality about the general warrant issued by the House of Commons. On this condition Court further said “ in that manner such a right will not be entrusted with legislature of India, as house of commons is an internal part of High Court, and parliament being superior there and also due to its influential nature, the general warrant issued by the house will not become under the subject of judicial review, By the other courts.

But in India the condition was different, the history and background of the legislature of India had no significance of judicial function and does not claim to be regarded as a Court of record at all”. There it can be concluded that the privilege enjoyed by the House of Commons is not applicable in the context of Indian legislature.  

Article 226 entrusted every High Court of India, in the matter of issuing the writ petition of habeas corpus against any State authority or institution which under Article 12 included the Legislature.

Article 121 of the Indian constitution provides that, the member of the state legislative assembly is not allowed to talk about the manner and conduct of any judge of the Supreme Court and the High Court, but if they do then, in that case, the Court has no right in there matter to interfere.

The court also provides that there is hardly any doubt about, that Parliament is the sole and exclusive judge in the matter of privilege and this fact will not be distorted and not be in dispute, also it could found in Article 194(3). But the main question is in the concern and had implored great attention that whether the privilege claimed by the house of Parliament was provided by Article 194(3) or not, this question was still to be determined by the Court.

The question whether the immunities enjoyed by the Legislature provided under the part of Article 194(3) was subject some restriction in respect of Part III relating to fundamental rights, was left unanswered, however, the tussle is going to resolve. And the Court observed that such privileges were necessarily subject to Article 21 and 22 regarded as fundamental right provided in the Indian Constitution.

Breach of privileges

When any individual or authority does not recognize and attacks on any of the privileges, rights, and immunities, either of the Members individually or of the House in its collective capacity the offence is called the breach of privileges and is punishable by as per the House rules and regulations. Besides breaches of particular privileges, actions must be taken in regards to the nature of offences against the authority or dignity of the House or in other words contempt of the house, such as disrespect to its legitimate orders upon itself, its members or officers, are also subject to punishment as it regarded as contempt of the House. 

Contempt of the House shall be defined generally as “any conduct or negligence which obstructs or bring inconvenience either House of Parliament in the performance of its functions, or which obstructs or impedes any member or officer of such House in the exercise of his duty, or which has a capacity, directly or indirectly, to produce such results.” It may be stated that it is not possible to describe exhaustively every act which might be considered by the House as contempt of the House. The House may punish a person who is found to be indulged in breach of privilege or contempt of the House either by reprimand or admonition or by imprisonment for a specified period of time.

In the case of its own members, two types of punishment can be given by the House, namely, suspension from the duties of the House and expulsion. The penal jurisdiction of the House is neither confined to its own members nor to its officers, but enlarged to all contempts of the House, whether committed by members or by persons who are not members, irrespective of the fact that the offence is committed within the House or beyond its premises. The power of the House to punish any person who commits a contempt of the House or a breach of any of its members privileges is the “keystone” of Parliamentary privilege.

It is the power that gives effect to the privileges of Parliament and pertain its supreme character so far as the protection of its rights and the maintenance of its dignity and authority are concerned. The power exercised by each House of Parliament and the House of the State Legislature to punish the person for contempt or breach of privilege is a general power of committing for contempt analogous to that likewise by the Superior Courts and is in its discretionary nature. It flows from the provisions given under Article 105(3) of the Constitution as affirmed by the Supreme Court in the case of Rajaram Pal & Ors. Vs. UOI & Ors[10].

Norms of punishment for breach of privilege or contempt of the House may impose the following punishments on a person found to be guilty of breach of privilege or contempt of the House. 

(1) Imprisonment: The period for which the House can direct an offender to prison for contempt or breach of its privileges is limited by the duration of the session of the House. As soon as the House discontinues its session the prisoner is set free. There are a number of cases where the audience shouted slogans and threw leaflets from the visitor’s gallery on the floor of the House, the offenders were sent to prison for committing contempt of the House by creating disorder in the public Galleries.

(2) Admonition or reprimand: In cases where the offence of breach of privilege or contempt is not so serious like petty the warrant for the imprisonment of the offender by way of punishment the person concerned may be summoned to the Bar of the House and admonished or reprimanded by the presiding officer by order of the House. The admonition is the mildest form of punishment, whereas reprimand is the more serious remark of the displeasure of the House.

(3) In the case of its own members, two other punishments are also available to the House by which it can express its displeasure more strongly rather by admonition or reprimand, namely: 

             (i) Suspension from the service.

             (ii) Expulsion from the House

 The penalization powers of the House for committing a breach of privilege or contempt of the House are, however, exercised only in extreme cases where a deliberate attempt is made to disturb the house of Parliament to show disrespect and further in order to depict the institution has lost the public confidence. It is also a tradition of the House that unqualified and unconditional regrets sincerely expressed by the persons guilty of breach of privilege and contempt of the House can be accepted by the House. And the House normally decides in such cases to best consult its own dignity by providing no further notice of the matter. 

Contempt of court

There are no codified rules which clearly state what action constitutes a breach and what punishment is granted. Although, there are several acts which are considered by the house as the contempt. It is generally viewed as the actions which intended to obstruct the proceedings of the house and produce a disturbance for the members. 

Some of them are briefly discussed.

Giving misleading statement in the house

The acts which are done only with the purpose to mislead and intended to deceive are considered as a contempt of the house. If the statement is uttered by a person who believes the information to be true then there is no breach violated. It has to be proven that the statement recorded by him/her deliberately with the intention to mislead the house.

Disturbance by outsiders

Any conduct of disturbance created by chanting slogans or throwing leaflets etc. with the purpose of disturbing the procedure and functioning of the house are regarded as the major contempt of the house. The person who commits shall be confined by the house for a specific period of time or an alert is given depending on the sincerity of the case.

Assault on members

The privilege is provided when the member is performing his duties. An assault was done by any person on the member of parliament when he discharged his responsibilities is dealt as contempt of the house.

Writings or speeches defining the personality of members

Any speech published, advertised or libel made against the character of any member also regarded as the contempt of the house. These are ascertained to be necessary because it affects the confidence of people for their representative and role of the member by diminishing the respect for him.

It is, clearly inferred that any attack on the immunity of the members by any intend is considered as a violation of the rights and the parliament can take action concerning the same

Punishment

1. Imprisonment – If the breach of immunities committed is of a heinous nature, punishment can be given in the form of detention or imprisonment to any of the member or the person liable to it.
2. Enforcing fine – If in the perspective of the house, the violation or contempt committed is of economic misdeed and any pecuniary profit has been made from that breach then, the parliament can impose fines on the person.
3. Prosecuting the offenders – The parliament has the power to prosecute the member or an outsider if anyone committing the breach.
4. The punishments are given to its own members – If any contempt is committed by the members of the parliament then he has to face penal consequences initiated by the house itself which could also affect in the interruption of the privileges of the member from the house.

Freedom of the press and the parliamentary privileges

The parliamentary privileges restrict the freedom of the press, which is a fundamental right. Degree of higher care and Caution has to be taken by the press while publishing any report, paper of the proceedings of the parliament or the conduct of any member. There are some instances where the press can be held liable for the contempt of the house-

1. Publishing any sort of news vandalizing the character of any member of the parliament.
2. Any premature or incomplete information published.
3. Misrepresenting or Misreporting the proceedings of the house.
4. Publishing the obliterate section of the proceedings.

Indeed of the truth that the freedom of the media comes under the protection of parliamentary privileges, certain amendments have been made in respect to the indemnity of the freedom of the press. If the elementary rights are being violated, there is no sign of democracy. The freedom of the press has to be defended because in India there is an indispensable need to inform everyone about the acts of our representatives Parliamentary Proceedings (Protection of the publication) Act, 1977 [10] protects the rights of the press under given circumstances-

1. The report is made for the Publicam Bonum i.e for the public good
2. The report should not reveal any secret meeting of the house.
3. The reports of the proceedings somehow to be true and real.
4. The report is made without malice intention.

Codification of the parliamentary privileges 

Parliament member enjoys supreme powers by virtue of being a member of the parliament. But there is always a doubt of misuse of the privileges conferred on them because they do not have any sort of restrictions and checks and balances on their privileges. They have the right to be the judge in their own case, regulate their proceedings, and also to decide what was considered the breach and what punishment should be given for the committed of that breach, are solely decided by them.

The power vested in their hands are too wide in scope as compared to the fundamental rights vested in the hands of citizens. Having a no codification of the privileges, they have gained omnipotent power because there is no expressed provision to put a bar on their immunities. The privilege from any civil arrest for 40 days before and after the session and during the session of the house results that they are free from arrest for even more than 365 days. No law has been till date enacted by the parliament for the codification of the parliamentary privileges.

It is mostly resisted by the members because the enactment of the law will be made privileges subject to the fundamental rights and would be entitled to judicial analysis. Justice M.N. Venkatachaliah is the head of the Constitution Review Commission suggest to define and confine the privileges for the free and independently functioning of the legislature. This raised the presumption that codification will involve interference of the court as if the matters would be presented in a court of law. Non-codification of privileges has provided the immense opportunity of greater powers vested and being enjoyed by the members of the house. But, now the time has come to confine and define the privileges and actions must be taken in case of misuse, for smooth and accordingly functioning of the parliament without any conflict.

Judicial review of the parliamentary privileges

The Indian judiciary has been entrusted to take care of and vested with the responsibility for the protection of the fundamental rights conferred by the Constitution. Parliament members claim absolute sovereignty over their privileges and also have the privilege that if in any case they do not want the judiciary to interfere in that. But, the judiciary is considered as the guardian and exclusive protector of our Constitution and it cannot stood firmly if any of the fundamental right of the citizen is violated due to privileges conferred or when there is an escape from any criminal liability.

The judiciary has to take a step on the wrongs committed by the members of the house who are taking the benefit of the privileges. The Supreme Court in Keshav Singh’s case held that the privileges conferred on the members are subject to the fundamental rights and in case of conflict fundamental right will prevail.

The Supreme Court has also observed that any conflict arising between the privileges and the fundamental rights would be resolved by adopting the harmonious methodology. The judiciary is aware enough about the fact that it does not have jurisdiction over parliamentary matters but Judicial body should have the power to decide, for the betterment of the community that any offence should be resolved by the court as it considered fit.

Parliamentary immunities and the principle of natural justice

In a judgment which was by the Apex Court judges in the case of Algaapural R. Mohanraj v Tamil Nadu[11]. it was held that the principle of natural justice cannot be taken for granted by the members of the Parliament and its immunity committee.

Facts regarding the case

On the date 19-02-2015, some of the members of the Tamil Nadu State Legislative Assembly was suspended on the grounds of misbehaving charge. In furtherance of this, a privilege committee came into existence to investigate the conduct and acts of the members of the Assembly, and further proceedings related to breach of immunity. It was found and proposed that the necessary action must be taken against six members, who are alleged for the breach of immunity.

By a decision dated 31-03-2015, the members were dispersed for a period of ten days. Further, it was extended and cover the scope to reduce their salaries and giving any other benefit or perk till the dispersion period. A writ petition was filed by the members of the Assembly in the Apex Court under Article 32 of the Indian Constitution.

Arguments raised by the members

The argument was raised by the appellant that their elementary rights (fundamental rights) under Article 19(1)(a), 19(1)(g), 14 and 21 of the Indian Constitution have been infringed by the resolution passed by the Parliament of India.

Judgment by the court

The Court does not entertain the argument of the petitioners that the decision offended Article 19(1)(a) and 19(1)(g). It further accepted the argument that the rights were violated under Article 14 of the Constitution in the context of the right to equality. The court noticed that the video recording which showed the act of the members of the legislature, amounting to the breach was not adjacent before the appellants.

If it would have been available then they may have had the chance to explain their actions or why they behave like this. It was further decided and ordered by the Court to Backed the salary and other benefits of the petitioners.

Misuse of Parliamentary Privileges

There is hardly any doubt, that a member of Parliament accepts the bribe to influence the conduct done by him/her as a member is a contempt of house, there is uncertainty whether the Parliamentary Privileges is a bar to the prosecution of the members for law offences of bribery and corruption. Salmon report commission on the standard of code and conduct of parliament stated that the statutory offence of corruption and bribery do not apply to the members of either house of the parliament. The question of whether the legislation is needed in the area of corruption in public life is not solved yet, how Parliamentary privileges affect the criminal liability deemed to be a big issue before the various committees.

In 1972 the question raised whether the court has jurisdiction over MPs in respect of the misuse of parliament privileges as indulging in taking bribes and increasing corruption. A Conservative MP, Mr. Harry Greenway, had been accused of taking bribe jointly with an executive engineering company, which had its contacts with British rail and was an employer in his constituency.

In order to curb the problems, the parliamentary privilege committee decided to codified its privileges so that the member will have some checks and balances over them. As we generally see that the level of debate proceeds in parliament is nothing more than mud-slinging over each other, and after that member take the protection that they exercise their privilege in order to show the general public the truth about their representative.

This act not meant to show the truth but to defame the other member and influence their performance while exercising his/her duties through character assassination.

Privileges give numerous perks and facilities to the members of the house and the member will start misusing it. They use the privileges for their personal means and for monetary profit

These all are the issue can be put in the heading of misuse of parliamentary privileges. And these issues are not new they have they root since so long, but there is a hope which we can rely upon and that is judicial system, which is exclusively deemed as the sole guardian of our constitution, as the constitution is the supreme law, and all laws contradicting the provisions of our constitution shall be declared as null and void.

However, Buckley J ruled that Parliamentary privileges were no bar for prosecution initiated on members of parliament found to be alleged in common law offences. Unfortunately, the case never proceeds to full trial.

Conclusion

It has been shown that there is an unmistakable division about what all rights and benefits are supreme and what isn’t. In India Legislative Assemblies and Parliament never release any legal capacity and their verifiable and protected foundation does not bolster their case to be viewed as courts of record in any sense. No insusceptibility from an investigation by courts of general warrants issued by House in India can, in this way, be asserted. 

Both the Parliament and State Legislatures have an obligation to look cautiously under the steady gaze of making any law so it doesn’t hurt different rights. It is likewise an obligation of the individuals to appropriately utilize these benefits and not abuse them for substitute purposes that are not in the support of general enthusiasm of the country and open on the loose. 

The Court has developed the correct convention to decide the benefits of the parliament that the Indian Parliament can receive. The Doctrine of Pen, Ink and Indian elastic hypothesis.

As to obtaining models and instances of benefits from the Constitution of different nations, the Supreme Court in case M.P.V. Sundaramier and Co. v. Territory of Andhra Pradesh[12]. advised: “The strings of our Constitution were no uncertainty taken from other Federal Constitution yet when they were woven into the texture of our Constitution their compass and their composition experienced changes. In this manner, significant as the American choices are as indicating how the inquiry is managed in the Federal Constitution extraordinary consideration ought to be taken in applying them in the understanding of our Indian Constitution.” 

The National Commission to Review the Working of the Constitution (NCRWC) has additionally prescribed in the report, that “The benefits of lawmaking bodies ought to be characterized and delimited for the free and autonomous working of Parliament and State Legislatures.”

It might in this way be expressed that the codification of benefits would reinforce the standard of law. Along these lines, it may be effectively reasoned so as to decide the benefits, the house can’t aimlessly embrace a similar that exists in Britain however needs to choose and examine whether it suits the Indian Democracy and does not outrage the Republic for the country.

To know more about parliamentary privileges and immunities, please Click Here.

References

1. https://indiankanoon.org/doc/1757390/
2. https://www.5rb.com/case/john-v-associated-newspapers-ltd/
3. 1970 AIR 1573, 1971 SCR (1) 612
4. https://www.indiatoday.in/magazine/cover-story/story/20051226-jharkhand-mukti-morcha-bribery-scandal-in-1993-corruption-got-institutionalised-in-india-786386-2005-12-26
5. https://trove.nla.gov.au/newspaper/article/13189722
6.  1966 AIR 657, 1966 SCR (2) 406
7. https://indiankanoon.org/doc/528695/
8. 1959 AIR 395, 1959 SCR Supl. (1) 806
9.  AIR 1965 All 349, 1965 CriLJ 170
10. https://indiankanoon.org/doc/544981/
11. https://indiankanoon.org/doc/38086329/
12. 1958 AIR 468, 1958 SCR 1422

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A student of faculty of law, Aligarh Muslim University, Amanat Raza, has written this article. In this article, he discusses the concept of Government of India, its features and why some of its features have been taken by our Constitution. 

Introduction 

This legislation was the longest Act passed by the British Parliament after its domination over India. It was the result of a very long process that started when the Simon Commission was appointed to look into the matter which was not satisfied by the Indian politicians. Dyarchy system that was introduced by the Government of India Act, 1919 (the “1919 Act”) did not prove to be a satisfactory experiment by the British Parliament. 

Indian politicians were frustrated at that time because they thought that the area they had officially control over was still in the hands of the British officials with full control over it. Because of this reason, these politicians wanted a check of India’s constitutional arrangements and it could be fixed. So, to review this matter and to make changes this had been given to the Simon Commission. 

The report of the Simon Commission[1] proposed to scrap the dyarchy system and instead of that, ‘responsible government in the province’ was sought to be introduced. This report brought us one step closer to the establishment of the Government of India Act, 1935 (the “1935 Act”). The material derived from the 1935 Act not only came from the Simon Commission Report but also different sources as well. These sources were the Third Round Table Conference,[2] reports of the Joint Select Committee [3] and the White Paper of 1933.

Features

This Act gives many salient features out of which some has been considered as the major ones and some as the minor ones. These salient features are given below:

1. This Act shows the dominance power of the British Parliament or its superiority.
2. This Act had proposed to establish an All India Federation and this federation should consist of provinces and Princely states considering both as one unit. 
3. This Act introduced a system of Provincial Autonomy into the provinces in place of the dyarchy system. This time dyarchy was not introduced at the state level it only introduced at the central level.
4. A federal court was established after the recommendation of this Act. This court was introduced after two years of the passing of this Act, i.e., 1937.[4]
5. This Act provides the recommendation for the establishment of the Reserve Bank of India to control the regulation of currencies and credits of this country.
6. After the establishment of this Act, the Council of India that was established by the Government of India Act, 1858 was abolished.
7. Muslims, Sikhs, and others except depressed classes were provided separate electorates after the implementation of this Act.
8. This Act proposed the expansion of Universal Adult Franchise from 3% of the population to 14% of the population.
9. This Act gave Governor the Critical emergency powers that were only enjoyed by him.

All India Federation

This Act having a proposal to establish an All India Federation which would comprise British India Provinces and princely States. The terms on which a state could join the federation were mentioned in the Instrument of Accession. It was at the discretion of the state whether it wanted to join the federation that was given by the Government of India Act, 1935. 6 Chief Commissioner’s provinces, 11 Governor’s provinces and some states who agreed to merge in the stated federation were constituent units of that federation [5].

It had been proposed through this Act that if princely states were entitled to half of the state’s seats in the upper house of the federal legislature then the federation of India would come into existence. The part of the legislation that had not been implemented earlier was implemented after the first election under this Act was held. This legislation came into force in 1937 two years after the establishment of the Government of India Act, 1935.

The approach to form the federation and implement provincial autonomy paved the way for the division of subjects between the Centre and the Provinces. The division of subjects that were given by the Government of India Act, 1919 was revised and added some more subjects in it by this Act of 1935 and included three lists. These were:

1. Federal list
2. Provincial list
3. Concurrent list

Division of powers

This Act centralized all the ruling power in one body, i.e., the Centre. Although the Center possessed a lot of power, it could not interfere in the laws made on the subjects mentioned in the provincial list by the Provinces. This is because this Act gives the province the power of autonomy i.e., they can make laws on the subject matter of the provincial list and centre will not interfere in that particular law that is made. This is the power of ‘provincial autonomy’.

The Governor-General on behalf of Majesty utilises its power either directly or through the appointment of subordinate officer(s). But this power did not prevent the federal legislature from functioning upon subordinate authorities. This Act proposed that a Finance Bill could not be placed in the Central Legislature unless the Governor-General gives his assent or his consent.

Dyarchy at centre

By this Act, dyarchy system was adopted at the central level. There were two categories of federal subjects:

• Reserved subjects 
• Transferred subjects.

Reserved Subjects– The subjects that are mentioned in this category of federal subjects were to be administered by the Governor-General on the advice of the Executive Councillors and the Executive Council could not exceed its limit of three members. Religious affairs, defense, administration of tribal areas and external affairs were included in the reserved subjects.

Transferred Subjects– This subject was to be administered on the advice of ministers and the number of ministers could not exceed 10. Subjects other than reserved were dealt with under the Transferred Subjects. The Governor-General had the power to dominate the ministers.

Federal legislature

This Act proposed that there should be a Federal Legislature consisting of His Majesty, and this legislature would be represented by Governor-General and two chambers, namely the Council of States and the House of Assembly (also known as the Federal Assembly in this Act). The chamber of the Federal Legislature would be summoned to meet at least once in a year.

The chamber of the federal legislature could be summoned, adjourned or dissolved by the Governor-General only who had got these powers through the Government of India Act, 1935. The language that was to be taken into consideration for the proceedings of Federal Legislature could be only in English. 

No discussion was to take place in the Federal Legislature concerning the conduct of any judge of the Federal Court or a High Court in the discharge of his duties. The Governor-General possessed extra legislative powers under this Act but was not allowed to do anything without the permission of His Majesty. 

Council of States

This legislation proposed that there should be a Council of State which consisted of representatives from British India as well as from the Princely States. It also stated that the Council of State could not be dissolved as it got the recognition of permanent body through this Act. First Schedule of this Act gives the provision on which a member can retire or in how much amount they could be retired. It talks that one-third members of the council will retire as per this provision.

Initially, the Council of State had to choose two members of the council respectively as President and Vice President thereof, and in case the post of President and the Vice President becomes vacant, the Council would have to choose another member for the same post. If the post of the President was vacant, then Deputy President could perform his function and in the absence of Deputy President, any member of the council could exercise those functions and also it was at the discretion of the Governor-General whom to give that power.

The President, Deputy President and any person who was appointed to the post of President and Vice President at the time of vacancy, did not possess the right the assembly but at the time of equality of votes in the assembly, they exercised a ‘casting vote’. 

• Representative of British India

In the Council of State, there were one hundred and fifty-six representatives of British India 

• Representatives of Princely States

The Council of State consisted of one hundred and four representatives from the princely states.

Federal Assembly

This Act gave this assembly another name and that was called the House of Assembly. There were two hundred and fifty representatives from British India and not more than one hundred and twenty-five representatives of Princely States in this assembly. Each Federal Assembly was to continue for five years and the assembly could dissolve only after the completion period of these five years.

• Provincial Autonomy

The introduction of Provincial Autonomy was one of the reclaiming features of this Act. Simon Commission recommends to add this part in the Government of India Act, 1935. Provinces were not having an Executive Council and Reserved Subjects earlier but this legislation had added these subjects. This Act discontinued the system of dyarchy or the system of division of subjects in ‘Reserved’ and ‘Transferred’.

The Council of Ministers has got the right of administering on provincial subjects except for law and order. The power to administer on the subject of law and order was in the hands of the government who was having powers superior to that of the Council of Ministers.

After the commencement or the starting of this Act, the Centre’s hold over provincial subjects was reduced. The ministers could not freely exercise their power of running their departments. The dominating power of Governor through which it dominates over the ministers was rarely used by him. The governor on the advice of Viceroy took total control over the provincial government at the time of political breakdown.

• Safeguard and Reservation

Another characteristic of this Act was that it sought to safeguard and to provide reservation to minorities. The reason to add this characteristic feature was the dominance of the majority upon a minority. The power to make changes in the Act was solely to the British government. The Indian legislature could only pray for constitutional change after giving a resolution to Majesty’s Government. This demonstrates how this Act was not an Indian Act, but a mere imposition of rules and regulations on Indians by the British government.

• Establishment of a federal court

This Act also proposed the establishment of a federal court to resolve disputes arising between two states or between state and federal government and also in the case where disputes arose in matters concerning the interpretation of the Constitution. It was empowered to interpret the clauses that were controversial in the Act. Although, the Federal Court was not the final court of appeal. The appeal could be made to the Privy Council in some circumstances.

• Abolition of Indian Council

The Indian Council that was established by the Government of India Act, 1858 was abolished by this Act and in place of that council, it proposed the appointment of Secretary of State and his team which could not be more than six members and could not comprise of members less than three. The power of Secretary of State got diminished and the Governor-General became more powerful than him after the establishment of provincial autonomy through this Act.

• Extension of franchise 

This Act introduced the extension of the franchise. Approximately 10% of the total population had the right to vote to appoint representatives to this legislature. The Act did not hold its hand over the communal electorates but it had extended it holds. For the first time, the direct election was introduced in India with the help of this Act.

• Federal railway authority

This Act had given the command of the railway in the hands of a new authority called Federal Railway authority. The member in this authority was seven in numbers and these members were free from the control of councilors and ministers. The authority directly reported to the Governor-General. The main idea behind the establishment of this authority was to confirm the British stakeholder that the investment they have done in the railway was safe.

• Reorganization of provinces

This Act also did some kind of restructuring or reorganization of the provinces. A province was separated from Bombay and named as Sindh. Another thing that has done was split of Bihar and Orissa to become separate individual provinces of Bihar and Orissa. So this Act formed the two new provinces and these are Sindh and Orissa.

• Separation of Burma

Simon Commission proposed to the Government of India to separate Burma from India and this proposal was accepted by this Act. In 1935, the Burma Act was passed and its separation from India was done after two years of this Act i.e., in 1937. The Burma Act proposed for a new Burma office which had the power to establish Burma as a separate colony. 

The department of Burma and India was headed by the Secretary of State of India and Burma as he was appointed to look into the matter of both the countries and also he headed the department of both the colonies. Lord Dundas was the first person to become Secretary of State of both the colonies i.e., India and Burma.

Importance of the Act

Government of India Act 1935 curtailed the power concentrated in the hands of the Central Government and distributed it among the decentralized form of government. Separate electorates for women, although they had not asked for it, was quite good for the advancement of women in the decision making process. Even the workers had their separate representation which helped in the advancement of the workers class. This Act was the first attempt to give the provinces an autonomous status by freeing them from external interference. 

Therefore, if the province is making any decision then nobody has got the right to interfere that decision-making and also no one could assist the provinces what to do and what not to do for its subjects. Britishers have introduced this Act because through this Act they can win the support of modern nationalist and they could rule over the dominion of India.

Another reason was that this Act provides voting rights to more people than were given under the Government of India Act, 1919. This Act also proposed to form the federal government that allowed princes to participate in political affairs of India.

Although this Act was not liked by many Indians, its importance was that it paved the way for the independence of India. This Act provided the basis for negotiation between Britishers and Indians for getting independence.

Government of India Act, 1935 and the Indian Constitution 

Constitution of India was the residue of the legacy started by the Government of India Act, 1935. Some features of the Government of India Act that suited well for free India was taken into consideration by the drafters of the Indian Constitution. Features of Federal Legislature and Provincial autonomy was taken from the Government of India Act, 1935. The 1935 Act divided powers between the Centre and the Province which was better for the administration at ground level as well. 

Another feature that had been taken was provincial autonomy. This autonomy worked better for regulating the states or provinces without the interference of external authorities. Also, the states or the provinces knew their people’s condition better than any other external authority.

A Federal Court that was established in 1937 through the Government of India Act, 1935 was considered as the Supreme Court by independent India. The Constitution of India also borrowed the feature that every state should have a Governor who would be elected by the Central Government. Public Service Commission that we see in Article 315 of the Indian Constitution had also been taken from the Government of India Act, 1935.

Conclusion

The Government of India Act, 1935 was the lengthiest Act that was made before the year 1935. It consisted of 321 Sections, 14 Parts, and 10 Schedules. This Act proposed many salient features such as the creation of All India Federation, Provincial Autonomy, provision for safeguards and reservation, etc. 

These features were important for the Britishers but Indian politicians were not happy with these features although some features were adopted by the drafters of the Indian Constitution in free India. The Act of 1935 was a rigid one. It could not be amended or modified by any Indian legislature, either he was Federal or Provincial Legislature. This Act gave nearly 10% of voters the right to vote.

Providing separate electorate to Hindus, Muslims, Sikhs, etc, later on, turned out to be the tools for disintegrating India. Hence, this Act, in reality, did not help in curbing out the difficulties that had arisen in the Government of India Act, 1919. It only showed the dominion of the British Government over the Indians. Only for their benefit, they had introduced this Act. But some of its features benefitted the Indians also.

References 

1. https://dspace.gipe.ac.in/xmlui/bitstream/handle/10973/39712/GIPE-010124-05.pdf?sequence=3&isAllowed=y
2. http://www.open.ac.uk/researchprojects/makingbritain/content/round-table-conferences-1930-1932
3. http://www.open.ac.uk/researchprojects/makingbritain/content/round-table-conferences-1930-1932
4. https://shodhganga.inflibnet.ac.in/bitstream/10603/174777/10/10_chapter%204.pdf
5. https://cadindia.clpr.org.in/historical_constitutions/government_of_india_act_1935_2nd%20August%201935

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This article is written by Dhruv Bhardwaj, a student of Amity Law School, Delhi. In this article, he talks about the Doctrine of Post-Decisional Hearing which comes under the Principles of Natural Justice under Administrative Law.

Introduction

The standards of natural justice have been developed by the Courts to control the activity of the regulation of power with the goal that it doesn’t prompt the discretion of the despot’s ruthless use of power. One of such standards is the guideline of audi alteram partem which necessitates that nobody will be censured unheard and it has gotten its best blossoming in the acknowledgment and implementation of the concept of post-decisional hearing. In the event that in a given case, an earlier hearing would defeat the purpose and reason of the exercise of power, it tends to be abstained from yet should be substituted by post-decisional hearing. 

Right to Hearing

Natural Justice is an ethico-legal idea which depends on natural sentiment of individual. Rules of natural justice have been created with the development of civilisation and the content thereof is often considered as an appropriate proportion of the degree of civilisation and Rule of Law which is predominant in the network. 

It is a very much settled law and there is no contest that the principles of natural justice are relevant to judicial and quasi-judicial capacities however the most significant inquiry is whether these principles are material to administrative activity. Some time ago, courts had taken the view that the principles of natural justice were inapplicable to administrative requests.

In Kishan Chand v. Commissioner of Police, representing the Supreme Court, it was seen that the impulse of hearing before passing the order suggested in the legal saying audi alteram partem applies just to judicial or quasi-judicial procedures however as of late on account of A.K. Kraipak v. Union of India, it was held that up to this point, the Courts were of the supposition that the utilization of the principles of Natural Justice was anything but a statutory obligation except if the body was legally necessary to act as indicated by it. It was additionally held that if the sole reason for the Rules of Natural Justice was to prevent injustice, it did not make a lot of sense about why these principles shouldn’t be connected to Administrative Decisions.

Natural Justice also encompasses Right to Hearing. The purpose behind this is that the right to hearing is a Code of Procedure, and subsequently covers each phase through which an administrative order passes. Right to hearing is a significant defence against maltreatment of administrative power.

Natural Justice is the peer of American “due process.” Notice and opportunity to be heard are essentials of due process of law. In India likewise, significance is spread out to the benchmarks of natural justice under the Constitution. Article 311 of the Constitution stresses on ‘Right to Hearing’ being a basic standard of Natural Justice. In deciding the legitimacy of sensible limitations, Courts have alluded to the guideline of natural justice. The procedural reasonable restriction is equated with the American due process of law.

Principles of Natural Justice are exemplified under Articles 14 and 21 of the Constitution. With the incorporation of ‘due process’ in Article 21 of the Constitution, all that reasonableness which is revered in the principles of natural justice can be seen into Article 21 when an individual is denied of his life and individual freedom. As regarding the other areas, Article 14 embodies the principles of natural justice. 

The position is that Article 14 applies not exclusively to unfair class enactment yet additionally to State activity which is despotic or prejudicial. The reason is that infringement of natural justice brings about arbitrary conduct and all things considered infringement of natural justice is an infringement of the postulate of uniformity consolidated in Article 14. 

In this manner, principles of natural justice are grounded in the Constitution of India. At last, it very well may be said that the skyline of right hearing, regardless of whether as a feature of natural justice, or fairness are continually widening. Procedural fairness coupled with natural justice is to be suggested at whatever point an action affecting the rights of the parties has taken place. 

Audi Alteram Partem

This rule underlines the fact that nobody ought to be censured unheard. In a cultured society it is expected that an individual against whom any action is looked to be taken, or whose privilege and right is at stake, will be given a  chance to defend himself. 

An essential standard of natural justice is that before any move is made, the person affected must be given notice to show cause against the proposed activity and look for his clarification. It is a sine qua non of reasonable hearing. Any order which is passed without a notice goes strictly in contravention of the principles of natural justice and is declared to be void ab initio.

Regardless of whether there is no mention in the enactment about giving of notice, if the request affects negatively, the privileges of an individual, the notice is required to be given. Further it is important that the notice must be clear, explicit and unambiguous and the charges ought not be unclear and questionable. It isn’t sufficient that notice in a given case be given, it must be satisfactory too. The question of sufficiency of notice relies on the certainties and conditions of each case.Moreover, the notice must give a sensible timeframe to agree to the directions referenced in it. Along these lines, to give 24 hours time to disassemble a structure affirmed to be in a broken down condition isn’t appropriate and the notice isn’t substantial. 

The second prerequisite of the audi alteram partem maxim is that the party concerned must be given a chance of being heard before any negative move is made against him.

Meaning of the term Post-Decisional Hearing

Pre-decisional hearing is a hearing managed before making a choice or sanctioning an order. Post-decisional hearing, as opposed to its counterpart, is a hearing given by the adjudicating authority subsequent to making a choice or a decision. 

As a general rule, a hearing should be afforded before a decision is taken by an authority.

In the leading case law Ridge v. Baldwin which is sometimes referred as the be all and end all of Natural Justice, a Constable was accused of conspiracy followed by the prosecution by the authorities but in the end he was held not guilty and was acquitted of blame. While the judge was deciding the matter, certain remarks were made by the judge against the character of the Constable based on which he was expelled from his service. The Court of Appeal held that the committee which had expelled the Constable from his job as a result of the remarks made by the judge against his character, was exercising Administrative and Judicial or Quasi-Judicial power and therefore the Principles of Natural Justice did not fit here. Soon, this decision was reversed by the House of Lords by a 4:1 majority and the order of dismissal was therefore, not upheld. 

Post-Decisional Hearing

The principle of the post-decisional hearing was propounded by the Supreme Court in Maneka Gandhi v. Union of lndia. For this situation, the Supreme Court set out the rule that if in the interest of the general public, quick action was fundamental and it is impractical to manage the cost of a hearing before the decision, it ought to be managed after the decision. The passport of the petitioner who also happened to be a journalist was seized by the Government of India in light of a legitimate concern for public wellbeing. 

The petitioner was not given any chance before making the impugned move. At the point when the legitimacy of the impoundment request was checked, the Government battled that the use of the audi alteram partem rule would have gone against the very reason for seizing the passport. 

Despite the fact that the Supreme Court dismissed the conflict, it acknowledged the principle of post-decisional hearing in instances of outstanding nature. lt set out the recommendation that wherein an emergent circumstance, requiring prompt activity, it is not possible to give prior notice of hearing the preliminary action should be soon followed by a full remedial hearing.

A similar methodology was employed by the Supreme Court in Swadeshi Cotton Mills v. Union of lndia where a void administrative choice was approved by post-decisional hearing. An order assuming control over the administration of an organization by the Government without earlier notice or hearing was held to be bad as it abused the audi alteram partem rule. Be that as it may, the Court approved the impugned order on the grounds that the Government had consented to give post-decisional hearing.

In Liberty Oil Mills v. Union of lndia a request for examination was tested on the ground of contravention with the principles of natural justice. The Supreme Court saw that maybe that the chance to be heard may not be pre-decisional, it might essentially be post-decisional where the danger to be averted is imminent, or the action to be taken can brook no delay. 

In Shepherd v. Union of India, a request was issued to amalgamate certain banks with some Nationalized Banks. Certain representatives of Private Banks were prohibited from working in the Nationalized Banks. Thus, their service was ended without allowing them a chance to be heard. Dismissing the proposition for post-amalgamation hearing, the Supreme Court felt that, “there was no reason to think about a post-decisional hearing.”   

In Trehan V. Union of lndia, a governmental organization issued a circular adjusting prejudicially the terms and conditions of its employees without giving a chance of hearing. The legitimacy of the circular was tested on the ground of infringement of the principles of natural justice. The organization contended that after the censured circular was issued, an open door was given to the employees with respect to the modification made by the circular. Along these lines, a plea of post-decisional hearing was advanced. Dismissing the contention, the Supreme Court noted: “As we would see it, the post-decisional chance of hearing does not buy in to the rules of natural justice. 

The authority who sets out on a post-decisional hearing will ordinarily continue with a shut mind and there is not really any possibility of getting a proper consideration of the representation at such post-decisional hearing.” In Bari Doab Bank V. Union of lndia, the legislature passed the request for bank under Banking Regulations Act, 1949 of the petitioner Bank. It was held by the Supreme Court that applicants were not qualified for pre-decisional hearing before passing a request as post-decisional at the phase of filing issues with the draft plan would be adequate.

The teaching of post-decisional hearing has been given an exceptionally legitimate exposition in Charan Lal v. Union of lndia, which is a case identifying with the Bhopal Gas Disaster (Processing of Claims) Act, 1985. The Supreme Court held that a general rule unique in relation to an absolute rule applying consistently is that where the statute does not reject the rule of pre-decisional hearing but rather ponders over post-decisional hearing which adds up to full review of the benefits of original order, at that point such a resolution would be interpreted so that it bars audi alteram partem rule at the phase of pre-decisional hearing. On the off chance that the rule is quiet on the purpose of giving pre-decisional hearing, at that point administrative activity after post-decisional hearing is legitimate.

It is presented that the below mentioned observations of Sarkaria J in Swadeshi Cotton Mills in regards to pre-decisional and post-decisional hearing must consistently be recollected by each adjudicating. The core of this case was that post-decisional hearing can’t go about as a substitute for pre-decisional hearing. This demonstrates post-decisional hearing is acknowledged and consented to, however it simply should be applied in the appropriate circumstances.

Conclusion

The application of this doctrine does not come with a strait jacketed formula but is rather based on the facts and the situation of the case. In the event where pre-decisional hearing cannot be applied, post-decisional hearing can come to the rescue.

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This article is written by Soma-Mohanty of KIIT School of Law, Bhubaneswar. In this article, she has mentioned the provision of paternity leave in India. She has stated the procedure and eligibility for applying for paternity leave in India. Provisions and benefits of paternity leave in other countries are also mentioned here.

To maintain a healthy work environment, it is the duty of the employers to look after the needs of their employees. In our countrymen and women are treated equally and their equal involvement in building up a family is required. Thus it becomes mandatory for an employee to take leave from the workplace.

This helps them in the execution of their duty towards the family. When the policies for maternal leave is more emphasized than the paternal leave, the question of gender discrimination arises. Both of the parents should have equal rights to spend time with their newborn baby. Thus, many countries are taking steps to improve the policy of paternity leave.

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Paternity leave in India

• In 1961, the Government of India made provisions for working pregnant women known as the Maternity Benefits Act
• Women under this Act are entitled to various benefits, facilities, and incentives.
• But no provision has been laid down in legislation for paternity benefits.
• But the necessity of laying down of provision for paternity leave to maintain a healthy family was seen.
• Thus in 1999, the Central Government of India made provision of paternity leave for Central Government employee under Central Civil Services (Leave) Rule 551 (A). It provides 15 days of leave as paternity leave.
• It is to be provided to employees who have less than two surviving children.
• This leave can be availed for 15 days either before or within 6 months from the date of delivery of the child.
• These provisions are only made for Government servants.
• There is no provision for employees under private sector in this Act.
• Thus the private sectors are free to incorporate their policy of paternity leave and there have been no rules under this Act which would enforce them to work accordingly.

Paternity leave meaning

It is the mentioned period of time, where a father working as an employee under the sector is granted leave from work to take care of the child and spend time with the newborn child.

Paternity leave rules

• According to Paternity Benefit Bill in 2017, all the workers working in both unorganized as well as the private sector, have the right to avail paternity leave of fifteen days. And this period can be extended until a period of three months.
• This bill cited the equal parental benefit to be provided to both mothers as well as father.
• According to the 7th Central Pay Commission provision of leave to be granted to a government employee, during the adoption of a child below the age of 1 year. 

Paternity leave for central employees

According to the provisions laid down by the Central Government in 1999, under Central Civil Services (Leave) Rule 551 (A) are as follows:

• The period to avail leave is 15 days.
• He should be having less than two surviving children.
• The leave for 15days for parental care should be availed within 6months from the date of birth of the child or before.
• If the leave is not availed according to the provision, then there would be the lapse of time and it would be regarded invalid.
• In case of leave, there would be payment of leave salary which is equal to the pay

Paternity leave sanction proceedings

• In India, all the proceeding regarding the sanctions of paternity leave is to be held  before the Metropolitan Magistrate or a Magistrate of the first class 
• They have jurisdiction to try any offence under this Act. 
• But courts lower to them do not have jurisdiction to proceed with the trial.

Paternity leave rules in India for private companies

• There is no law, which enforces the private sectors to provide the said term of paternity leave as stated by the Government for employees working under Government.
• Thus they are free to frame the time period according to their convenience

Paternity leave policy

The leave policy in the following countries are:

The leave policy in the following companies:

Paternity leave policy in India

According to THE PATERNITY BENEFIT BILL, 2017

Applicability

• According to sub-clause 1 of clause 1 of the bill stated above, it applies to each and every part of India
• It can be availed by any employee working in a factory, mine or plantation which is under the Government 
• It can be availed by any person who is self-employed or working for an unorganized organization.
• Any person working in establishments consisting of less than ten employees also can avail leave.
• It also applies to every establishment or shop which in association with shops and establishment in a State comes under the meaning of any law for the time being in force.

Eligibility

• Every man can avail the benefits only if he has worked under the organization for a period of eighty days out of the twelve months and not less than that.
• It can be availed during the delivery of his wife to whom he is legally married or commissioning mother.
• A person who adopts a child can is also eligible for the benefit.

Exemptions

According to The Paternity Benefit  Bill, 2017 rule clause 24

“ If the appropriate Government is satisfied that having regard to an establishment or a class of establishments providing for the grant of benefits which are not less favourable than those provided in this Act, it is necessary so to do, it may, by notification in the Official Gazette, exempt, subject to such conditions and restrictions, if any, as may be specified in the notification, the establishment or class of establishments from the operation of all or any of the provisions of this Act or of any rule made thereunder.”

Exceptions

• When a man has immigrated to the State of Assam, the maximum period of eighty days to avail the benefits is not applied.
• During the period of leave if the man dies, then the employer is bound to provide the benefit of paternity leave for the stated period
• The employee can also be permitted to work from home if there is mutual consent.

Violations and penalties

• If the organization puts forward the notice of dismissal to a man during the period of his leave then it becomes an unlawful act, and it violates the provisions of the bill passed.
• When a person is deprived of the benefits that he is entitled to  under the rules by his employer, then the employer would be penalized with the imprisonment which shall not be less than three months, it can be extended to one year and fine not less than fifty thousand can be imposed and it may exceed to fifty thousand.
• If there is any contravention in the provision laid down in the rules by the employer, then he would be punished with imprisonment which may be more than one year, or fine of at least fifty thousand rupees or both can be imposed
• When the Inspector requires any document in the execution of this Act and the person conceals it and prevent the person to appear for the examination, then he would be punished with imprisonment of one year or it may exceed. He would also be liable to pay the fine that is fifty thousand rupee
• When a person is granted leave under the provision of the rule and works for another establishment during the course of the period, then he would be denied the right to claim the paternity benefit

Complaint

• Any person who is discontented can file a complaint against offense under this rule before any court with competent jurisdiction.
• But after the expiry of one year from the date of commencement of offense, the complaint can not be filed.
• The trial of the offence under this rule can only be tried before the Metropolitan Magistrate or a Magistrate of the first class.

Benefits of universal paid parental leave 

Benefits for family

• Maternal leave allows the mother to spend time with their newborn baby. This helps in building up a healthy family.
• Because of the leave, the mother can feed the baby in time. This helps in the growth of the baby.
• Paternal leave allows the father to connect well with their babies.
• Mother also gets a helping hand, thus it reduces disturbance in the family.
• And in paid leave, both the parents are not worried about their financial position and it reduces depression.

Benefits for organization

• When paid parental leave is provided to the employees, the possibility of their turnover decreases and they tend to work in the company longer.
• The more the facility is provided, the more is the outcome from the employees.
• Their efficiency in work increases, which helps in the development of the company.
• Profit is always mutual, the more you provide the more to get back.
• It reduces absenteeism.
• It helps in maintaining a good work environment
• Leaving a newborn baby back home increases the mental pressure of a mother, thus it would reduce her efficiency in work

Benefits for economy

• When there is paid parental leave, the request for public assistance reduces.
• This induces women to get involved in work-force thus contributing to the development of the economy.
• It reduces the percentile of unemployment
• When people are happy, they contribute more to work. Lesser the family pressure more concentrated they are. Thus it helps them to execute their duty efficiently and thus increase in the economy

Capabilities approach

• This model based on the principles to handle the issue of care as well as equality between the sexes was given by Jeremiah Carter and Martha Nussbaum.
• For maintenance of a decent society, eleven central capabilities are required as proposed by Nussbaum
• According to the model paid paternal leave is one of the resources to be provided to people to start their family.

Income and workforce

• When parental leave is paid, it enhances the labor market with the participation of both men and women before and after the birth of the child.
• It increases the rate of GDP as well as increases national productivity.
• It increases the income of the citizens.
• It puts an effect on the rate of birth, thus helping in future development to be contributed by youngsters.

Challenges

Statistical discrimination

• It is predicted that the cost of hiring women who are pregnant would increase which would amount to a decrease in demand for women in the labor market.
• This was the prediction according to the theory of the neoclassical model of labor markets.
• This model predicts the statistical discrimination against hiring a pregnant woman. Despite of the fact that gender discrimination is illegal.
• Thus to curb this inequality some countries have introduced policies that would increase the rate of paternity leave.

Cost

• The universal paid parental leave can be funded in two different ways. One is publicly funded and the other is private;y funded.
• When the fund is transferred directly to workers on leave in the form of unemployment insurance is said to be publicly funded.
• When is transferred by the corporation in the form of employee benefits is said to be privately funded.
• Private funding arises the problem of statistical discrimination and it increases the cost for the smaller business.
• Public funding is very expensive in nature and it is not that cost-effective in nature.

Criticism

• The reservation of part of parental leave as well as family leave for father by some countries.
• This was implemented on the provision of “Father’s quota”.
• According to this if the father does not avail of those leave, then it can not be transferred to the mother.
• The leave would lapse at the end of the period of time.
• As the rate of participation of women in labor force is increasing, the interest of social scientist, as well as policymakers in providing a hand in an equal division of labor, is also increasing.
• This has been criticized by the critics
• Various research has shown that paternity helps in building a stronger bond between father and child.
• It helps in reducing the wage gap faced by the women during her maternity leave.
• Father also plays an equal role like the mother in the development of the child.
• Some critics have raised the fact that companies do not permit the time of paternity to be allocated to mother instead.
• According to some critics this father,s quota affects the right of a mother. It deprives her of the time needed to be spent with the baby.

Effects

Effects on health and development

• Maternity leave provides time for the mother to breastfeed her child, thus it reduces the chances of infection.
• The mortality rate is lower in the countries where there is effective paternal leave provision.
• Parental leave reduces the frequency of leave as well as decreased regular medical check-ups.
• The mortality rate is directly proportional to the leave rate according to the statistics.
• On the basis of Harvard report on the bonding of children with parents, it was seen that the parents who were on paid parental leave had a strong bonding with their children.

Effects on the economy

• The effect of paid paternal leave on the economy was variable with different views.
• According to the report of Norway in 2016, it was seen that 
• The retention of employees is higher in paid paternal leave.
• Paid paternal leave enhances the income of the family.
• According to the statistics of Western Europe, the mother who is granted maternal leave comes back to work again and they are more focused. Thus, it helps in the economic development of the organization as well as the country.

Effects on gender equality

• Gender equality is promoted in most of the countries through paternal leave provision.
• In terms of unpaid paternity leave, gender inequality arises because it restricts the father to bond with the baby.
• Thus most of the countries provide paid paternal leave to both the parents to eliminate gender inequality.
• While amending parental policies, more focus is shifted towards the improvement of maternal policy rather than paternal policy.
• The difference between gender roles can be eliminated if both parents contribute equally.
• Thus less provision for paternal leave would cause gender equality.
• The Parental Leave Equality Index model was introduced by Carmen Castro-Gracia helped in the prediction of the amount of contribution by both of the parents in paternal care.
• Through this model of Carmen Castro-Gracia, the policies made would stimulate both the parents to put equal effort into taking care of the child

Length of the leave

• There was a change in the policy of France on the parental policy.
• It was done by Joseph, Solaz, Recotillet, and Pailhe.
• It was more focused on long term economy and short term paternal leave that is to be paid.
• In the previous policy back in 2004, it was seen that the working women were granted two months of paternal leave and they can even avail three years of paternal leave which was unpaid.
• Thus most of them preferred taking two months of leave from work.
• But they were granted six months of paid paternal leave with the introduction of the new policy.
• After the implementation of the policy, it was seen that there was an increased efficiency of women in work.
• Most of them joined back to work after the termination of their leave period.
• There was also a change of policy in paternity leave of women in Denmark by Rasmussen.
• He increased the weeks of leave to be granted.
• And the result was fruitful.
• It was found that long term parental leave increased the wages of the women rather than short term leave.

Parental leave policies in united nations

Maternity leave provision

• Every staff is entitled to a leave period of sixteen weeks.
• Pre-delivery leave is granted only after six weeks and 
• It would be granted on the ground of submission of a medical certificate from a qualified practitioner or midwife mentioning the probable date of birth of the baby.
• The staff availing maternity leave would receive full payment for the entire duration of the leave.

Paternity leave provision

• The term of leave granted to every staff is up to four weeks.
• But there is an exception, any staff who is posted internationally then the leave period granted is for eight weeks.
• The staff can avail of leave at his convenience either the whole period or he can divide the period of time.
• The payment to be received during the period is the same.

Countries providing paternity leave

Asia

Which benefits a person gets even when he is on paternity leave 

The situation in case of adoption of a child

• In India, any Government servant can avail paternity leave for a period of 15 days on valid adoption of a child who is below the age of one year from the date of valid adoption.
• In the United Kingdom, when a partner is adopting a child individually then he is granted ordinary paternity leave.
• But when it is done jointly, both of them can not take adoption leave jointly.
• Two or more weeks of continuous leave is provided as paternity leave in adoption.

Latest zomato case

• The CEO of zomato stated that male employees would be entitled to same parental leave as give to female employees i.e. 26 weeks of paid leave.
• It provides an endowment of Rs. 69,000 to both male and female employees on becoming new parents.
• It is also applied in cases of adoption as well as same-sex partners.
• This policy has been introduced to remove the differences between the benefits provided to females as well as an employee.

What to do if you are eligible and you are not getting the benefits?

• When an employee who has been working under the company for a long time and is eligible to take paternity leave in the terms of the period of his employment then he can avail it. 
• But even after the fulfilment of all the criteria he has been prohibited from enjoying the benefits, then he can put the matter forward before the  Grievance Redressal Committee.
• He can even file a suit against the employer if such provisions have been mentioned in the norms of the company and he has been prohibited to avail it.
• In India, the private sectors are free to mandate their provisions for paternal leave. So a person taking the norms of public paternal leave into consideration can not file a suit against the private sectors.
• In Chander Mohan Jain v. N.K Bagrodia Public School case, it was seen that the complainant who was a private school teacher was denied paternity leave and there was a deduction in his salary. Thus, the High Court stated that though there is no legislation against it. But it held that the school being non-aided private school is subjected to entitle paternity leave. Thus it ordered to return the deducted amount to the complainant.

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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 process of election of the president, eligibility to be the President and the reason why the indirect election is adopted in the election of the President.

The President of India is elected by a group of members forming an electoral college. The election of President of India is done according to the provisions of Article 55 of the Constitution of India. 

Composition of an electoral college 

The electoral college consists of

• The elected members of the Legislative Assemblies of the States.
• The elected members of both the Houses of  Parliament.

Composition of Legislative Assemblies of the States

• Legislative Assemblies of each States shall consist of members not less than sixty and it should not be more than five hundred. This is regulated according to the provision of Article 333 of the Indian Constitution.

Composition of the Council of States

• The President nominates twelve members on the basis of skill or knowledge in literature, science, arts, and social service.
• Two hundred and thirty-eight representatives from the States as well as Union Territory.

Composition of the House of the People

• Five hundred and thirty members from territorial constituencies in the States who are chosen by direct election. The number of members should not exceed.
• Twenty members from Union Territories, who are chosen by the President according to the law. The number of members should not exceed.

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Qualifications for president of India

Article 38 lays down the qualification required to be eligible for the President of India. The following criteria are:

• The person shall be a citizen of India.
• He should have attained the age of 35 years
• He must have qualified for election as a member of the House of the Parliament.
• When a person is holding an office of profit under the Government of India, or Government of any other State or under any local authority, then he won’t be eligible for the election of President.
• But the holder of certain offices are exempted from this provision.

1. The President and Vice President 
2. The Governor
3. Minister of Union as well as Minister of any State

Process of the election of the president of India

Uniformity in the scale of representation of states

• The proportionality between the value of the vote of an MLA to the population of that state is maintained.
• Formula. 

Value of vote of an MLA= total no.of population of the particular state/ number of elected MLAs of that state divided by 1000.

 The balance between the votes of MPs and MLAs 

• To maintain the balance between the State and the Union, it has been formulated that the total value of votes of MPs should be equal to MLAs.

Single vote system

• Each voter has the right to cast only one vote
• The value of the vote of an MLA is variable and it varies from state to state.
• The value of the vote of MP always remains constant.

Fixed quota

• A winning quota is set up for the candidates.
• Whoever reaches the quota or exceeds it is declared as the winner.
• Formula 

Winning qouta= total number of poll/ no.of seats + 1

Preference by electors

• In this type of election, the voter casts his vote in accordance with his preference
• The vote goes to the first preference.
• But if the first preference candidate fails to touch the winning quota and if any of the candidates did not touch the winning quota, then the vote goes to the second preference

Transfer of votes 

• When after the count of the first preference vote is done and there is no winning candidate.
• Then the candidate who secured the lowest vote is eliminated.
• And after the elimination, the vote is transferred to the remaining candidates.

Proportional representation

• As per Article 55(3) of Indian Constitution the President of India is to be elected by proportional representation by the means of the single transferable vote.
• Minority parties, as well as independent candidates, are given a chance of representation and their chances of ruling increases. Thus, new changes are made in the system with evolution in the welfare of society as well as people.
• It provides the system of the coalition government. According to it under one government more number of voters can be represented.
• It is better than the ordinary straight voting system. Because in this system the candidates who are elected can’t represent the majority of the electorate’s opinion

How single transferable system works? 

The single transferable system is mostly used in the representation. In this type of system, the elector has the right to one vote and the number of seats to be filled up is not required. Each voter can rank the candidates in accordance with their preference on the ballot paper.

The quota of surplus vote 

The proportional representation system is different from an ordinary straight voting system. In the ordinary method, a candidate who secures the highest number of votes is declared to be elected. But in proportional representation, any candidate who secures the necessary quota is declared to be elected.

Process of calculating 

Example

•  the place “X” is a 5 seated constituency and the number of votes cast is 60,000.
• Then the total number of votes cast is to be divided by the number of constituencies plus one. 
• That is 60,000 divided by (5 plus 1) 
• 5 plus 1 equals to six
• 60,000 divided by 6 equals to 10,000
• 10,000 plus 1 is equal to 10,001
• Then after fixing the quota in this method, the candidate whose total number of first preference vote is more and the vote exceeds the quota fixed, is declared as the winner.

Distribution of surplus votes 

The surplus vote of the first preference of each elected candidate would go in vain. Thus, those votes are transferred to the second preference candidate.  The count of the surplus vote is known. This is the process of relocating excess votes.

Elimination of bottom candidate   

• When all the seats are filled in the second round then the election is completed.
• Candidates with the lowest vote count of first preference are dropped out when the requisite number of candidates do not touch the quota while the distribution of surplus vote of first preference is done.
• Then the person’s complete vote is transferred to available preference to the next preference
• If these steps do not work effectively and still there is a vacancy of seats, then the procedure is repeated again. The candidate who is at the bottom is eliminated and all his votes are transferred to the candidate who is the next preference available according to his papers.
• This process is repeated until the seats are filled.

Working of proportional representation  

Illustration

• Total no.of valid votes are 20,000
• There are four candidates “A”, “B”, “C”, “D”
• “A” has 8000 votes
• “B” has 7000 votes
• “C” has 4000 votes
• “D” has 1000 votes
• Quota of vote= {20000/ (1+1)}+1=10001
• One of them got the quota required for winning
• Thus “D” having the lowest vote would be eliminated and his vote would be transfered.
• Thus the vote would be distributed between “A”, “B”, “C”. now second preference would be recorded.
• The vote would be transferred to first preference i.e. 

• “A”= 8000+200= 8200
• “B”= 7000+500= 7500
• “C”= 4000+300= 4300

• After the second count “c” secures the lowest vote and would be eliminated.
• The vote would be transferred to “A” and “B” respectively. And thus third preference would be recorded.
• Let the vote of “C”, divided between “A” and “B” be 1900 and 2400 respectively.
• The final result

• A’s count = 8200+1900= 10,100
• B’s count = 7500+2400= 9900

Thus “A” would be the winner as he has secured the quota of winning. The winning quota was 10001 and “A” had secured 10100

Reasons for indirect election of the President of India

• Our country has a cabinet system of government and thus it requires a competent person to run it. And it is not possible in part of the voters to differentiate the abilities the post requires to run the office and if the candidate possesses such abilities to run the office or not.
• If the direct election process for the election of the President would be adopted, then the candidate has to travel through India for campaigning for which he would require the help of a political party. This would arise political instability.
• The President is considered to be the first man of India and thus he deserves respect and his actions should be favourable towards all the parties for a swift running of the country. But direct election arises enmity feeling towards the President.
• India’s population is vast and conducting an indirect election for electing President would be expensive and it would affect the economy of the country even.
• It is not possible in the part of the Government to provide a huge number of electoral machinery for the smooth running of the election
• This system helps the head of State to maintain neutrality.
• In a direct election, the President elected may desire to have the real power as he was directly elected by people. And this would create a mess in the cabinet and thus the responsibility of each member would be in confusion.

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This article is written by Dhruv Bhardwaj, a student of Amity Law School Delhi. In this article, he will cover the concept of Corporate Veil under the Companies Act, 2013,  the need for introducing this concept and circumstances under which the Corporate Veil can be lifted. The article covers the concept in leading nations of the world not just the Indian scenario.

Introduction 

Once a business is incorporated according to the provisions laid out in the Companies Act of 2013, it becomes a separate legal entity. An incorporated company, unlike a partnership firm, which has no identity of its own, has a separate legal identity of its own which is independent of its shareholders and its members. This article will go over what this differentiation means, why this demarcation was brought about and how can the members be made personally liable for using the company as a vehicle for undesirable purposes. 

What is Corporate Veil ?

A company is composed of its members and is managed by its Board of Directors and its employees. When the company is incorporated, it is accorded the status of being a separate legal entity which demarcates the status of the company and the members or shareholders that it is composed of. This concept of differentiation is called a Corporate Veil which is also referred to as the ‘Veil of Incorporation’.

Meaning of Lifting of Corporate Veil

The advantages of incorporation of a Company like Perpetual Succession, Transferable Shares, Capacity to Sue, Flexibility, Limited Liability and lastly the company being accorded the status of a Separate Legal Entity are by no means inconsiderable, under no circumstance can these advantages be overlooked and, as compared with them, the disadvantages are, indeed very few. 

Yet some of them, which are immensely complicated deserve to be pointed out. The corporate veil protects the members and the shareholders from the ill-effects of the acts done in the name of the company. Let’s say a director of a company defaults in the name of the company, the liability will be incurred by the company and not a member of the company who had defaulted. If the company incurs any debts or contravenes any laws, the concept of Corporate Veil implies that the members of the company should not be held liable for these errors.

Basics of Limited Liability

Organizations exist to a limited extent to shield the individual resources of investors or shareholders from individual obligation for the obligations or activities of a company. Almost opposite to a sole proprietorship in which the proprietor could be considered in charge of the considerable number of obligations of the organization, a company customarily constrained the individual risk of the investors. This is why Limited Liability as a concept is so popular.

Puncturing the Veil of Incorporation commonly works best with smaller privately held companies in which the organization has few investors, restricted resources, and acknowledgment of separateness of the partnership from its investors.

Germany

German corporate law built up various speculations in the mid 1920s for lifting the corporate veil based on “control” by a parent company over a subsidiary. Today, investors can be held subject on account of an obstruction devastating the partnership. The company is qualified for at least impartial assets. 

United Kingdom

The corporate veil in UK company law is pierced every once in a while. After a progression of endeavors by the Court of Appeal during the late 1960s and mid 1970s to set up a straight jacketed formula for lifting the veil, the House of Lords reasserted a universal methodology. As indicated by a 1990 case at the Court of Appeal, Adams v Cape Industries plc, the main genuine “veil piercing” may happen when a company is set up for false purposes, or where it is set up to avoid a statutory obligation. 

Tort Victim and Employees

Tort victims and representatives, who did not contract with an organization or have very inconsistent and limited dealing power, have been held to be exempted from the standards of limited liability in Chandler v Cape plc. In this leading case law, the petitioner was a representative of Cape plc’s entirely claimed subsidiary, which had gone insolvent. He effectively acquired a case of tort against Cape plc for causing him an asbestos sickness, asbestosis. Arden LJ in the Court of Appeal held that if the parent had meddled in the activities of the subsidiary in any capacity, for example, over exchanging issues, then it would be connected with obligation regarding wellbeing and security issues. Arden LJ underscored that piercing the corporate veil was a bit much in this case. The limitations on lifting the veil, found in legally binding cases had no effect.

“Single Economic Unit” Theory 

It is a proverbial standard of English company law that a company is an element isolated and unmistakable from its individuals, who are at risk just to the degree that they have added to the company’s capital: Salomon v Salomon. The impact of this standard is that the individual backups inside a combination will be treated as independent elements and the parent cannot be made obligated for the auxiliaries’ obligations on insolvency. This standard particularly applies in Scotland. 

While on the face of it, it may look like there are a lot of scenarios for “lifting” or “piercing” the veil, judicial dicta is of the view that the standard in Salomon is liable to special cases are slender on the ground. Lord Denning MR sketched out the hypothesis of the “single economic unit” – wherein the court analyzed the overall business task as an economic unit, instead of a strict legal form -in DHN Food Distributors v Tower Hamlets.  

The “single economic unit” hypothesis was in like manner dismissed by the CA in Adams v Cape Industries,  where Slade LJ held that cases where the standard in Salomon had been circumvented were just occasions where they didn’t have a clue what to do. The view communicated at first case by HHJ Southwell QC in Creasey v Breachwood that English law “unquestionably” perceived the rule that the corporate veil could be lifted was depicted as a sin by Hobhouse LJ in Ord v Bellhaven, and these questions were shared by Moritt V-C in Trustor v Smallbone,  the corporate veil cannot be lifted only because equity requires it. In spite of the dismissal of the “equity of the case” test, it is observed from judicial thinking in veil piercing cases that the courts utilize “fair circumspection” guided by general standards, for example, mala fides to test whether the corporate structure has been utilized as a simple device. 

Perfect Obligation

In the landmark case of Tan v Lim,  where an organization was utilized as a “façade” (per Russell J.) or in common layman terms, to defraud or to swindle the lenders of the respondent and Gilford Motor Co Ltd v Horne, where an order was conceded against a merchant setting up a business which was simply a vehicle enabling him to evade a pledge in limitation. The common element in these two cases was the element of defrauding the other person via the vehicle of the company. The company in fact was set up for absolutely no other purpose collateral to it. The main purpose was to defraud. Also, in Gencor v Dalby, a suggestive remark was provided that the corporate veil was being lifted where the organization was having an image exactly similar to that of the litigant. In reality however, as Lord Cooke (1997) has noted extrajudicially, it is a result of the different characters of the organization concerned and not regardless of it that value interceded in these cases. They are not occurrences of the corporate veil being pierced but rather include the utilization of different standards of law.

Reverse Piercing

There have been cases in which it is to the benefit of the shareholder to have the corporate structure overlooked. Courts have been hesitant to consent to this.  The often referred to case Macaura v Northern Assurance Co Ltd  is an example of that. Mr Macaura was the sole proprietor of an organization he had set up to develop timber. The trees were devastated by flame yet the back up plan wouldn’t pay since the strategy was with Macaura (not the organization) and he was not the proprietor of the trees. The House of Lords maintained that refusal was dependent on the different lawful character of the organization.

Criminal Law

In English criminal law, there have been cases in which the courts have been set up to pierce the veil of incorporation. For instance, in seizure procedures under the Proceeds of Crime Act 2002 monies gotten by an organization can, contingent on the specific facts of the case as found by the court, be viewed as having been ‘acquired’ by a person (who is for the most part, yet not generally, a chief of the organization). As a result, those monies may turn into a component in the person’s ‘advantage’ acquired from a criminal lead (and consequently subject to seizure from him). The position with respect to ‘piercing the veil’ in English criminal law was given in the Court of Appeal judgment on account of R v Seager in which the court said: 

There was no significant contradiction between direction on the lawful standards by reference to which a court is qualified for “pierce” or “rip” or “evacuate” the “corporate veil”. It is “hornbook” law that an appropriately framed and enrolled organization is a different legitimate element from the individuals who are its shareholders and it has rights and liabilities that are independent of its shareholders. A court can “pierce” the carapace of the corporate element and see what lies behind it just in specific conditions. It can’t do as such basically on the grounds that it thinks of it as may be simply to do as such. Every one of these conditions includes inappropriateness and deceitfulness. The court will at that point be qualified for search for the legitimate substance, not just simply the structure. With regards to criminal cases the courts have recognized at any rate three circumstances when the corporate veil can be pierced. First if an offender endeavors to shield behind a corporate façade, or veil to shroud his crime and his advantages from it. Secondly, where the transaction or business structures comprise a “gadget”, “shroud” or “hoax”, for example an endeavor to mask the genuine idea of the transaction or structure to delude outsiders or the courts.

United States

In the United States, corporate veil piercing is the most contested issue in corporate law. Although courts are hesitant to hold a functioning shareholder at risk for activities that are legitimately the obligation of the organization, regardless of whether the partnership has a solitary shareholder, they will regularly do as such if the enterprise was particularly rebellious with corporate customs, to forestall misrepresentation, or to accomplish value in specific instances of undercapitalization.

To put it plainly, there is no strait-jacketed formula that exists here and the decision entirely depends on customary law points of reference. In the United States, various hypotheses, most significant “modify the sense of self” or “instrumentality rule”, endeavored to make a piercing standard. Generally, they rest upon three essential pillars—namely:

• Unity of Interest and Ownership : This is a situation in which the different personalities of the shareholder and organization stop to exist.
• Conduct which is Wrongful in Nature: In case the corporation takes steps which are deemed to be wrongful in nature.
• Proximate Cause:  If the company indulges in wrongful conduct, there must be some foreseeable ramifications that might be arising out of it, so the party which is actually seeking the piercing of the corporate veil must have suffered some harm arising out of the wrongful conduct of the corporation.

Despite all these guidelines laid out, the speculations neglected to explain a genuine methodology which courts could legitimately apply to their cases. Accordingly, courts battled with the confirmation of every circumstance and rather examine every given factor. This is known as “totality of circumstances”.

Another apparent question here is to decide the jurisdiction of a corporate if the business of the corporate entity is not limited to just one state. All enterprises have one place of business where they were initially set up and incorporated, (their “home” state) to which they are incorporated as a “household” company, and in the event that they work in different states, they would apply for power to work together in those different states as a “remote” organization. In deciding if the corporate veil might be pierced, the courts are required to utilize the laws of the company’s home state and not the numerous other states that they might be doing business in. 

This issue at first sight may not look like a big thing to worry about but sometimes it can be huge; for instance, Californian law is progressively liberal in enabling a corporate veil to be pierced, the standards that the Californian Corporate Law has set in terms of scenarios under which the Veil can be pierced are quite many in number and even if an organisation simply encroaches a wrongdoing, the Courts might order for the Piercing of the Veil, while the laws of neighboring Nevada are quite strict when it comes to piercing the veil. The law in Nevada may allow the veil to be pierced only under exceptional circumstances and thus it makes doing such things increasingly troublesome. 

Therefore, the owner(s) of an organization working in California would be liable to various potential for the company’s veil to be pierced if the enterprise was to be sued, contingent upon whether the partnership was a California residential partnership or was a Nevada remote organization working in California. 

By and large, the offended party needs to demonstrate that the incorporation was only a formality and there was nothing more to it and that the enterprise dismissed corporate customs and conventions, for example, using the voting method to approve the daily decisions of the corporate entity. This is regularly the situation when an enterprise confronting lawful obligation moves its benefits and business to another company with a similar administration and shareholders. It likewise occurs with single individual enterprises that are overseen in a random way. All things considered, the veil can be pierced in both common cases and where administrative procedures are taken against a shell enterprise.

Factors for Courts to Consider

Variables that a court may think about when deciding whether or not to pierce the Corporate Veil include the things that are laid out below:

• Non appearance/Absence or mistake of corporate records; 
• In case the members of the corporation are misrepresented or concealed; 
• Inability to look at  corporate conventions regarding conduct and documentation; 
• Mixing of advantages enjoyed by the enterprise and the shareholder; 
• Control of assets or liabilities to concentrate them; 
• Non-working corporate officials as well as chiefs; 
• Noteworthy undercapitalization of the business (capitalization necessities fluctuate depending on industry, area, and specific conditions of the corporation which may vary from one company to the other); 
• Directing of corporate assets by the predominant shareholder(s); 
• Treatment by a person of the advantages of partnership as his/her own; 
• Was the enterprise being utilized as a “façade” for predominant shareholder(s) individual dealings like we have already seen in the article that some companies are set up only to defraud the other persons or corporations and their incorporation serves absolutely no other purpose.

It is essential to take note that not all these elements should be met all together for the court to pierce the corporate veil. Even if the corporation indulges in a few of the aforementioned bulleted provisions, it is well under the radar for getting its veil pierced. Further, a few courts may locate that one factor is so convincing in a specific case that it will discover the shareholders at risk. For instance, numerous enormous organizations don’t pay profits, with no recommendation of corporate inappropriateness, however, especially for a partnership firm which is small the inability to pay profits may propose monetary impropriety. 

Internal Revenue Service

Lately, the Internal Revenue Service (IRS) in the United States has utilized corporate veil piercing contentions and rationale as a method for recovering salary, domain, or blessing tax revenue, especially from business entities which are incorporated for the sole reason of  bequest arranging purposes. Various U.S. Tax Court cases including Family Limited Partnerships (FLPs) show the IRS’s utilization of veil-piercing arguments. Since proprietors of U.S. business substances made for resource security and home purposes frequently neglect to keep up legitimate corporate consistency, the IRS has accomplished various prominent court triumphs and victories.

Reverse Piercing

Invert veil piercing is the point at which the obligation of a shareholder is credited onto the organization. All through the United States, the general guideline is that turn around veil piercing isn’t allowed. However, the California Court of Appeals has permitted invert veil piercing against a limited liability company (LLC) in view of the distinction in cures accessible to lenders with regards to joining resources of an account holders’ LLC when contrasted with connecting resources of an enterprise.

Development of the Concept of “Lifting of Corporate Veil”

Once a company is incorporated, it becomes a separate legal identity. An incorporated company, unlike a partnership firm which has no identity of its own, has a separate legal identity of its own which is independent of its shareholders and its members. 

The companies can thus own properties in their names, become signatories to contracts etc. According to Section 34(2) of the Companies Act, 2013, upon the issue of the certificate of incorporation, the subscribers to the memorandum and other persons, who may from time to time be the members of the company, shall be a body corporate capable of exercising all the functions of an incorporated company having perpetual succession. Thus the company becomes a body corporate which is capable of immediately functioning as an incorporated individual.

The central focal point of Incorporation which overshadows all others is a distinct legal entity of the Corporate organisation. 

Solomon v Solomon

What the milestone case Solomon v Solomon lays down is that “in inquiries of property and limitations of acts done and rights procured or liabilities accepted along these lines… the characters of the common people who are the organization’s employees is to be disregarded”. 

Lee v Lee’s Air Farming Ltd

In Lee v Lee’s Air Farming Ltd., Lee fused an organization which he was overseeing executive. In that limit he named himself as a pilot/head of the organization. While on the matter of the organization he was lost in a flying mishap. His widow asked for remuneration under the Workmen’s Compensation Act. At times, the court dismisses the status of an organization as a different lawful entity if the individuals from the organization attempt to exploit this status. The aims of the people behind the cover are totally uncovered. They are made to obligate for utilizing the organization as a vehicle for unfortunate purposes.

The king v portus ex parte federated clerk union of Australia

In this case, Latham CJ while choosing whether or not workers of a company which was incorporated in the name of the Federal Government were not employed by the Federal Government decided that the company possesses a distinct identity from that of its shareholders. The shareholders are not at risk to banks for the obligations of the company. The shareholders don’t claim the property of the company.

Life insurance corporation of India v Escorts Ltd.

“It is neither fundamental nor alluring to count the classes of situations where lifting the veil is admissible, since that must essentially rely upon the significant statutory or different arrangements, an outcome which is tried to be achieved, the poor conduct, the element of public interest, the impact on parties who may be affected by the decision, and so forth.”

This was reiterated in this particular case. 

Circumstances under which the Corporate Veil can be Lifted

There are two circumstances under which the Corporate Veil can be lifted. They are:

1: Statutory Provisions

2: Judicial Interpretations

Statutory Provisions

Section 5 of the Companies Act, 2013

This particular section characterizes the distinctive individual engaged in a wrongdoing or a conduct which is held to be wrong in practice, to be held at risk in regard to offenses as ‘official who is in default’. This section gives a rundown of officials who will be at risk to discipline or punishment under the articulation ‘official who is in default’ which includes within itself,  an overseeing executive or an entire time chief.

Section 45 of the Companies Act, 2013

Reduction of membership beneath statutory limit: This section lays down that if the individual count from an organization is found to be under seven on account of a public organization and under two on account of a private organization (given in Section 12) and the organization keeps on carrying on the business for over half a year, while the number is so diminished, each individual who knows this reality and is an individual from the organization is severally at risk for the obligations of the organization contracted during that time.

Madan lal v. Himatlal & Co.

In this case, the respondent documented a suit against a private limited company and its directors because he had to recover his dues. The directors opposed the suit on the ground that at no time did the company carried on business with individual count which was to go below the statutory minimum and in this manner, the directors couldn’t be made severely at risk for the obligation being referred to. It was held that it was for the respondent being dominus litus, to choose the people himself who he wanted to sue.

Section 147 of the Companies Act, 2013

Misdescription of name: Under sub-section (4) of this section, an official of an organization who signs any bill of trade, hundi, promissory note, check wherein the name of the organization isn’t referenced in the way that it should be according to statutory rules, such official can be held liable on the personal level to the holder of the bill of trade, hundi and so forth except if it is properly paid by the organization. Such case was seen on account of Hendon v. Adelman.

Section 239 of the Companies Act, 2013

Power of inspector to explore affairs of another company in the same gathering : It gives that in the event that it is important for the completion of the task of an inspector instructed to research the affairs of the company for the supposed wrong-doing, or a strategy which is to defraud its individuals, he may examine into the affairs of another related company in a similar group. 

Section 275 of the Companies Act, 2013

Subject to the provision of Section 278, this section provides that no individual can be a director of in excess of 15 companies at any given moment. Section 279 furnishes for a discipline with fine which may reach out to Rs. 50,000 in regard of every one of those companies after the initial twenty. 

Section 299 of the Companies Act, 2013

This Section emphasises and offers weightage to the existing proposal of the Company Law Committee: “It is important to see that the general notice which a director is bound to provide for the company of his interest for a specific company or firm under the stipulation to sub-section (1) of Section 91 which is ought to be given at a gathering of the directors or find a way to verify that it is raised and read at the following gathering of the Board after it is given.  The section not only applies to public companies but also applies to private companies. Inability to consent and act in consonance to the necessities of this Section will cause termination the Director and will likewise expose him to punishment under sub-section (4). 

Section 307 & 308 of the Companies Act, 2013

Section 307 applies to each director and each regarded director. The register of the shareholders should contain in it, not just the name but also how much shareholding, the description of shareholding and the nature and extent of the right of the shareholder over the shares or debentures.

Section 314 of the Companies Act, 2013

The object of this section is to restrict a director and anybody associated with him, holding any business which provides compensation if the company supports it.

Section 542 of the Companies Act, 2013

Pretentious Conduct: If over the span of the winding up of the company, it gives the idea that any business of the company has been continued with goal to defraud the creditors of the company or some other individual or for any deceitful reason, the people who were intentionally aware of this and still agreed to the carrying on of the business, in the way previously mentioned, will be liable on a personal level without incurring the liabilities of the company, and will be liable in a manner as the court may direct.

In Popular Bank Ltd, it was held that the Section 542 seems to leave the Court with attentiveness to make an assertion of risk, in connection to ‘all or any of the obligations or liabilities of the company’.

Judicial Interpretations and Pronouncements

Instances are not few in which the courts have resisted the temptation to break through the Corporate Veil. But the theory cannot be pushed to unnatural limits. Circumstances must occur which compel the court to identify a company with its members. A company cannot, for example, be convicted of conspiring with its sole director. Other than statutory arrangements for lifting the corporate veil, courts additionally do lift the corporate veil to see the genuine situation. A few situations where the courts lifted the veil are laid down below as per the following case laws:

United States v. Milwaukee Refrigerator Transit Company

In this leading case law, the U.S. Supreme Court held that where a company is solely set up to defeat the statutory norms, justify the wrongdoings of the people of the company who use this corporate entity as a vehicle for the wrongdoing, where defrauding isn’t a collateral purpose of the company but the main purpose, the law will not see the company as a separate legal entity but will see it as an association of the members that it is made up of. 

Early examples where the English and Indian Courts neglected the guidelines built up by the landmark  Salomon’s ruling are:

Daimler Co. Ltd. v. Continental Tyre and Rubber Co. (Great Britain) Ltd

In a great deal of cases, it ends up being important to check the character of an organization, to check whether it is a companion or a foe of the country the business is set up in. A milestone managing in this field was spread out in Daimler Co Ltd v Continental Tire and Rubber Co Ltd. The facts of the case are referenced below: 

An organization was set up in England and it was set up to sell tires which were thus made by a German organization in Germany. Most of the control in the British organization was held by the German organization. The holders of the rest of the shares with the exception of one, and every one of the chiefs were German, dwelling in Germany. In this way the genuine control of the English organization was in German hands. During the First World War, the English organization started an activity to recover an exchange obligation. What’s more, the inquiry was whether the organization had turned into an adversary organization and should, accordingly, be banned from keeping up the activity. 

The House of Lords laid out that an organization consolidated in the United Kingdom is a lawful entity. It’s anything but a characteristic individual with brain or inner voice. It can nor be anyone’s companion nor foe yet it might accept a foe character when people in ‘true’ control of its issues are inhabitants in any adversary nation or, any place the occupants are, are acting under the control of the foes. Just in case the activity had been permitted, the organization would have been utilized as a means by which the motivation behind offering cash to the foe would be practiced. 

That would be incredibly against open arrangement. But in case there was no such fear, the courts may decline to tear open the Corporate Veil.

People’s Pleasure Park Co v Rohleder

In People’s Pleasure Park Co v Rohleder, certain terrains were moved by one individual to another interminably ordering the transferee from offering the said property to hued people. He moved the property to an organization made only out of Negroes. 

An activity was started for dissolution of this movement on the ground that every one of the individuals from the organization being Negroes, the property had, in break of the confinement, go to the hands of the hued people. The court rejected the contention and held that the individuals exclusively or all in all are not the partnership, which “has a particular presence separate from that of its investors.

Dinshaw Maneckjee Petit, Re.

The court has the ability to slight and infer the corporate substance in case that it is utilized for tax avoidance purposes or to go around expense commitment. An unmistakable and appropriate description of this situation is given in Dinshaw Maneckjee Petit, Re. The assessee was an affluent man getting a charge out of tremendous profit and intrigue pay. He shaped four privately owned businesses and concurred with each to hold a square of speculation as an operator for it. Pay was credited in the records of the organization yet the organization gave back the sum to him as an imagined advance. 

Further, he isolated his pay into four sections in an attempt to lessen his assessment obligation. It was held that the organization was shaped by the assessee absolutely and basically as a method for maintaining a strategic distance from super-charge and the organization was just the assessee himself. It did no business however was made essentially as a legitimate substance to apparently get the profits and interests and to hand them over to the assessee as imagined credits.

Government Companies

An organization may some time be viewed as an operator or trustee of its individuals or of another organization and may, accordingly, be esteemed to have lost its distinction for its head. In India, this inquiry has regularly emerged regarding Governmental organizations. Countless privately owned businesses for business purposes have been enrolled under the Companies Act with the president and a couple of different officials as the investors. 

The undeniable preferred position of framing an administration organization is that it gives the exercises of the State “a tad bit of the opportunity which was appreciated by private partnerships and the legislature got away from the standards which hampered activity when it was finished by an administration division rather than an administration enterprise. At the end of the day, it gave the administration portion of the robes of the person”. 

So as to guarantee this opportunity, the Supreme Court has repeated in various cases that an administration organization isn’t an office or an augmentation of the state. It’s anything but a specialist of the State. As need be, its representatives are not government workers and right writs can’t issue against it. In one of the cases, the court commented: 

“The organization being a non-statutory body and one consolidated under the Companies Act there was neither a statutory nor an open obligation forced on it by a resolution in regard of which requirement could be looked for by methods for the writ of Mandamus”.

The Madhya Pradesh High Court regarded a Government company to be a separate entity for the purpose of enabling a Development Authority to subject it to development tax. The assets of a Government company were held to be not exempt from payment of non-agricultural assessment under an AP legislation. The exemption enjoyed by the Central Government property from State taxation was not allowed to be claimed by a Government company. 

Gilford Motor Co v Horne.

The corporate entity is wholly incapable of being strained to an illegal or fraudulent purpose. The courts will refuse to uphold the separate existence of the company where the sole reason of it being formed is to defeat law or to avoid legal obligations. Some companies are just set up simply to defraud their customers or to act in a way which is against the statutory guidelines. This was clearly illustrated in the landmark ruling Gilford Motor Co v Horne. The case of the facts are laid out below:

The litigant was selected as an overseeing chief of the company of the plaintiff depending on the prerequisite condition that he will not, whenever he will hold the workplace of an organisation in which he will oversee the  executive work subsequently, open a business similar to the one which he was presently leaving or give the clients of the previous. His work was resolved under an understanding that is mentioned above. In the blink of an eye thereafter he started a business in the name of his wife the role of which was exactly what he had been prohibited to do according to the aforementioned contract. The new business was definitely a competing business and it was soliciting the customers of its previous business which was clearly a provision that was going against what he had agreed to before he left the job in the previous company.It was held that the organization was clearly based on conflicting terms that the defendant had agreed upon.

The respondent organization was an insignificant channel utilized by Horne to empower him, for his very own advantage, to acquire the upside of the clients of the offended party organization, and that the litigant organization should be limited just as Horne. 

Where an individual obtain cash from an organization and put it in offers of three distinct organizations in all of which he and his children were the main individuals, the loaning organization was allowed to join the advantages of such organizations as they were made uniquely to dupe the loaning organization.

Re, FG (Films) Ltd

In this case, the court would not propel the leading group of film censors to enlist a film as an English film, which was in truth created by a ground-breaking American film organization for the sake of an organization enrolled in England so as to dodge certain specialized troubles. The English organization was made with an apparent capital of just a mere 100 pounds, comprising of 100 shares of which 90 were held by the American president of the organization. The Court held that the real producer of the movie was the American organization and that it would be a sham to hold that the American organization and American president were simply operators of the English organization for delivering the film.

Jones v. Lipman

In this case, the merchant of a real estate property tried to dodge the particular execution of a contract for the clearance of the land by passing on the land to a company which he shaped for the reason and along these lines, he attempted to abstain from finishing the property deal of his home to the offended party. Russel J. depicting the company as a “devise and a hoax, a veil which he holds before his face and endeavors to stay away from acknowledgment by the eye of equity” and requested both the litigant and his company explicitly to fulfil the obligations of the contract to the offended party. 

Tata Engineering and Locomotive Co. Ltd. State of Bihar

In this case, it was expressed that a company is likewise not permitted to file a case in the name of fundamental rights by calling itself a collection of individuals who possess the fundamental rights.  When a company is framed, its business is the matter of an incorporated body therefore shaped and not of the people that it is composed of and the privileges of such body must be made a decision on that balance and can’t be made a decision on the supposition that they are the rights owing to the matter of the individual that are a part of the organisation.

N.B. Finance Ltd. v. Shital Prasad Jain

In this case, the High Court of Delhi allowed to the offended party organization a stay order which restrained the company of the defendant from alienating the properties that they owned on the ground that the defendant had borrowed money fraudulently from the plaintiff companies and the defendant had purchased properties in the name of the defendant companies. The court in this case did not award protection under the piercing of the corporate veil.

Shri Ambica Mills Ltd. v. State of Gujarat

Although the names of the petitioners of the case were not expressly mentioned, they were still held to be the parties to the proceedings. Also the managing directors couldn’t be said to be complete outsiders to the company petition although they in their individual limit might not be parties to such proceedings but in their official capacities, they are certainly capable of representing the company in such matters.

Approach of the Indian Courts in the 21st Century  

Subhra Mukherjee v. Bharat Coking Coal Ltd.

In this situation, Hoax or façade is being talked about. A private coal company sold its real estate to the spouses of executives before nationalization of the company. Truth be told,archives were tweaked and back-dated to corroborate that the deal of the selling of the real estate to the wives of the directors was before nationalization of the company. Where such exchange is claimed to be a hoax and deceitful, the Court was supported in piercing the veil of incorporation to discover the genuine idea of the exchange as to realize who were the genuine parties to the deal and whether it was real and in good faith or whether it was between the married couples behind the façade of the different entity of the company.

Bajrang Prasad Jalan v. Mahabir Prasad Jalan

This case is about a Subsidiary Holding Company. The court, to consider an objection of mistreatment held that the corporate veil can be lifted in the instances of not simply of a holding company, but also its subsidiary when both are belonging to the parent organisation.

Singer India v. Chander Mohan Chadha

The idea of corporate entity was advanced and endorsed to empower the trade,commerce and business scene and not to cheat the general population. In case where the court finds out that the corporate entity was not properly made use of, was set up only for illegal purposes, the court has every right to pierce the Veil and therefore see who actually was behind the Veil using the company as a vehicle for undesirable purposes.

Saurabh Exports v. Blaze Finance & Credits (P.) Ltd. 

Defendant no. 1 was a private limited company. Defendant no. 2 and 3 were the directors of that company. Defendant no. 4 was the husband of Defendant-3 and the sibling of Defendant -2. On the basis of alleged representation of Defendant-4 that Defendant-1 company was welcoming momentary deposits at great interest rates, the offended party deposited a sum of Rs. 15 lakhs in the company for a time of six months. At the point when the company neglected to pay the sum, the offended party sued it for the said sum alongside interest. Defendant-2 and Defendant-3 denied their risk on the grounds that they couldn’t have been made personally liable under any circumstance as the sum was deposited in the name of the company and not in the name of the directors of the company.

D-4 denied the risk on the ground that it had nothing to do with him as he was neither a director of the company nor a shareholder of the company so he had absolutely no role whatsoever in the case. It was held that Defendant-3 being a housewife had little task to carry out and hence couldn’t be made at risk. The offended party was looked to be put under the cloak of a corporate entity of Defendant-1 and, in this way, the corporate veil was lifted contemplating that Defendant-1 was just a family setting of the rest of the defendants. Defendant-2 was maintaining the business for the sake of the company. So Defendant-1 and Defendant-2 were both liable on a personal level.

Universal Pollution Control India (P.) Ltd. v. Regional Provident Fund Commissioner

This is an instance of ‘default in payment of the provident fund of the employee’’- Certain sum was expected and payable to the provident fund office by the sister concern of the company of the plaintiff, a demand was made by the defendant from the company of the petitioner on the ground that both the companies had two directors in common. It was held that the dispute raised by the respondent that the Court should lift the corporate veil and affix the obligation on the applicant was with no benefits and was unjustifiable. Both the companies were distinct legal entities under the provisions of the Companies Act and there was no arrangement under the Provident Fund Act that a risk of one organization can be secured on the other organization even by lifting the corporate veil, which is why this exercise would have been considered futile.

Richter Holding Ltd. v. The Assistant Director of Income Tax

Richter Holdings Ltd., a Cypriot company and West Globe Limited, a Mauritian company bought all shares of Finsider International Co. Ltd. (FICL), a U.K. company from Early Guard Ltd. another U.K. company. FICL held 51% shares of Sesa Goa Ltd. (SGL), an Indian company. The Tax Department issued a show cause notice to Petitioner claiming that the Petitioner had by implication obtained 51% in Sesa Goa Ltd and was, subsequently, obligated to deduct tax at source before making installment to Early Guard Limited. 

The Income Tax Department battled that according to Section 195 of the Act, the Petitioner is at risk to deduct tax at source in regard of installment made for the buy of the capital resource. The High Court of Karnataka held that the Petitioner should answer to the show-cause notice issued by the Tax department and urge every one of their disputes before it. The High Court additionally stressed that the reality of finding authority (Tax Department) may lift the corporate veil to investigate the genuine idea of the exchange to find out the fundamental actualities. 

The angle that merits more noteworthy consideration is that the Karnataka High Court shows a distinct fascination for lifting the corporate veil. This has various ramifications. Initially, the Richter Holding Case broadens significantly further the extent of the standards laid out in the Vodafone Case. For instance, in the Vodafone case, the Bombay High Court did not consider lifting the corporate veil to force taxation if there should arise an occurrence of transfers made by indirect measures.

Secondly, it isn’t obvious from the judgment itself whether the tax experts propelled the contention with respect to lifting the corporate veil. For the most part, courts concede to the sacredness of the corporate structure as a different legitimate personality and are moderate to lift the corporate veil, as proven by Adams v. Cape Industries , except if one of the built-up grounds exist.

Conclusion

It ought to be noticed that the rule of Salomon v. A. Salomon and Co. Ltd. is as yet the standard and the occasions of piercing the veil are the exemptions to this standard. The rule that a company has its very own different legitimate character of its own finds a significant spot in the Constitution of India too. Article 21 of the Constitution of India, says that: No individual will be denied of his life and individual freedom with the exception of as per procedure set up by law. 

Under Article 21 a company likewise has the option to life and individual freedom as an individual. This was set down on account of Chiranjitlal Chaudhary v. Association of India where the Supreme Court held that fundamental rights ensured by the constitution are accessible not simply to singular natives but rather to corporate bodies also.

Along these lines, an organization can possess and sell properties, sue or be sued, or carry out a criminal offense in light of the fact that the partnership is comprised of and kept running by individuals, going about as operators of the company. It is under the ‘seal of the company’ that the individuals or shareholders submit misrepresentation.

It is conspicuously clear that incorporation of the company does not cut off personal liability at all times and in all circumstances. The sanctity of a separate corporate entity is upheld only in so far as the entity is consonant with the underlying policies which give it life. 

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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 of free consent, exceptions and some case laws.

Meaning of consent

• According to Section 13 of the Indian Contract Act, 1872 consent means when both parties agree to a thing in the same sense of mind or unison of mind.
• The principle of consensus-ad-idem
• Illustration

“A” and “B” are the two parties in a contract. It was seen that there was some crisis and “A” had put a plan forward to solve it. “B” after being made aware of this fact and analysed that it was the perfect solution, agreed to it. In this case, both parties showed their consent.

Elements of free consent

• Consent is considered to be free consent when the following factors are satisfied:
• It should be free from coercion.
• The contract should not be done under the pressure of undue influence.
• The contract should be done without fraud.
• The contract should not be made through misrepresentation.
• The contract should not be made by mistake.

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Importance of free consent

• The contract made out of free consent protects the validity and enforceability of an agreement.
• It provides a protecting shield to the parties from coercion, undue influence, misrepresentation, fraud, and mistake
• It provides the parties to withstand their autonomous power to frame their running policy or principle.
• The principle of consensus-ad-idem is followed.

Difference between consent and free consent

Mistake in the free consent

A mistake is described as an element, which when occurs in a contract makes it void. There are two types of mistakes, which occurs in a contract

Unilateral Mistake

A mistake is said to be unilateral when one party is mistaken in the agreement.

Bilateral Mistake

Mutual mistake

A mistake is said to be mutual when both parties misunderstood each other. Thus it shows that there is a breach in the principle of consensus-ad-idem in the contracts and the contract is to be considered as void.

Illustration, “A” made an offer to “B” to sell his scooter. “A” intended to sell his 3G scooter but “B” believed that “A” would sell his 4G scooter. Thus there was no proper communication and the fact was mistaken. It would amount to an effective agreement.

Common mistake

Section 20 of the Indian Contract Act, 1872 lays down the provision for common mistakes. A contract arising out of common mistake is considered to be void. This type of mistake is possessed by both the parties but this mistake is not the result of mutual mistake, it arises individually.

Free consent examples

Illustration 

1. “A” agrees to sell his land to “B”. “A” has 10 lands in different places and he wanted to sell the land in the west direction but “B” wanted the land in the east part. In this case, it is seen that there is no meeting of minds and the principle of consensus-ad-idem is violated. Thus the agreement would be considered void.
2. “A” an old man who stays with “B”, his nephew and he takes care of him. “B” demanded to get the property of “A” as he was taking care of him and forces him to sign the papers. In this case, “A” is under undue influence.

Case laws

In the case of Solle v Butcher[1], it was seen that both the parties entered into the contract of lease of Flat. Both the parties believed that the identity of the flat has changed thus the maximum rent which was GBP 140 per annum has also changed. But later the court held that there was no change of identity thus, it was held that there was a mutual mistake of fact and thus the contract was declared to be void.

Elements Vitiating Free consent

Coercion 

• When a person commits or threatens to commit an act which is forbidden under the Indian Penal Code, or detains an object unlawfully or threatens to do so with the intention to force a person to enter into a contract, then it is said to be coercion.
• Illustration:

“A” cause “B” to enter into an agreement which is forbidden under the Indian Penal Code. “A” had done the act when an English ship was on the high seas. The “A” sues “B” for breach of contract in Mumbai.

This agreement was considered to be void as “A” had employed coercion, though Indian Penal Code was not in force at the place where the act was done.

Effect of coercion

When the agreement made is found to be made out of coercion, then the contract would be rescinded or cancelled, due to which both parties are released from their obligation to perform their duties as per the contract.

Coercion and duress distinguished

Is a threat to commit suicide coercion?

• No, a threat to commit suicide does not amount to coercion. 
• In the case of Ammiraju v Seshamma,[2] it was seen that there was a threat by the husband to commit suicide, and he demanded his wife to release the property. It was seen that the wife was prejudiced and it can’t be forbidden by law. So here the threat to commit suicide by the husband amounts to coercion on the wife.
• But this Section15 of the Indian Contract Act can’t provide relief in this matter in mere prejudice that a person is subjected to.

Undue influence

• When a contract is made between two parties and one of them is in the position to dominate the will of the other party and takes unfair advantage of the position, then the contract is said to be made out of undue influence.
• Illustration

“A” an old person appoints “B” as his attendant and “B” is his nephew as well. “B” demands a share of his property and “A” agrees to pay him. In this situation, “A”  is under the undue influence of “B”.

• The principle of undue influence is based on the doctrine of equity.

Salient features

• Either of the parties should be in a state to dominate over other
• The party who dominates should have taken undue advantage of his position

Parties that can be affected by undue influence

• Real and apparent authority
• Fiduciary relationship
• Parent and child
• Adult child and parent
• Husband and wife
• Lawyer and client
• Doctor and patient
• Trustee and beneficiary
• Creditor and debtor
• Landlord and tenant
• A person whose mental capacity is low
• Old age
• Tender age

Effect of undue Influence

• When an agreement is caused due to the impact of undue influence, can be considered void at the opinion of the party whose consent was so caused, according to Section 19A of the Indian Contract Act.

Burden of proof

• It is required to prove that the person dominating actually took undue advantage of the person and it should be proved that the person was in such position to dominate.
• Mere transfer of gift from one relative to others would not amount to undue influence.

A transaction with parda-nashin women

• When a woman can be viewed from the screen or is placed behind the screen i.e, veiled is called pardanashin women.
• The protection for pardanashin women is been rooted in the principle of equity and good conscience.
• Special laws are made for pardanashin women because they are subjected to ignorance, infirmity, illiteracy, etc and are thus easily influenced.
• The burden of proof should be provided against the person who is transacting with pardanashin women. He has to prove that the transaction had taken place with the free will of the women and her decision was taken by her without any enforcement and she was made aware of the provisions mentioned in the document of transaction.
• The explanation of the whole transaction won’t be enough to establish the burden of proof.
• In the case of Tara Kumari v Chandra Mauleshwar Prasad Singh,[3] it was delivered that the essential to establish the burden of proof is that the party executing them should be a free agent and the woman should be informed, through what she is going through.
• In the case of Kuna Dei v Md Abdul Latif[4], it was delivered that showing of the document to the pardanashin women won’t be enough to establish the burden of proof. Thus, he has to show that the women was explained clearly the facts in the document of the transaction.

The distinction between coercion and undue influence

Fraud

• Fraud means an action that includes the false assertion of facts, concealment of facts and any promise with the intention to deceive a person.
• According to Section 17 of the Indian Contract Act, 1872 when a party contracts with the other party with the intention to deceive amounts to fraud. The party may directly make the contract with the other party or it can be done with the help of an agent even.
• illustration

“A” agrees to sell his horse to “B”. “A” had the knowledge that the horse is of unsound mind and did not inform it to “B”. “B”, asked “A” if he does not deny the fact then “B” would consider the horse to be sound and “A” kept silence to it. In this case, mere silence amounts to the agreement, thus “A” performed a fraudulent act.  

Characteristics

• When a party conceals the fact from the other party
• When a party promises to perform an act for the other party but has no real intention to fulfil the promise.
• The false representation of facts has been made to enter into the contract.
• The omission of any act which is considered to be fraudulent in the eyes of law.

Does silence amount to fraud?

• Mere silence does not amount to fraud. But when there is a duty to speak and silence is equivalent to speech then it amounts to fraud.
• When two parties made an agreement, the parties are not compelled to disclose every fact to the other party. It is the duty of the other party to enquire about things rather than expecting the party to come and disclose the fact.
• When a person keeps silencing on the facts which would deceive the other person, then the person can be convicted of fraud.
• In the case of Jaswant Rai v Abnash Kaur[5], it was found that the vendor concealed the fact that the material to be sold was defective. Then it was held that the disclosure of the facts amounted to fraudulent activity of the vendor.
• In the case of Banque Financiere de la Cite SA v Westgate Insurance Co Ltd[6], it was delivered in the context of negotiation, the party is not obliged to speak. 

Effects of fraud

• The contract raised out of fraud is a voidable contract.
• The party deceived has the right to revoke the contract.
• The party is liable to recover the damages due to the fraudulent contract

Misrepresentation

• Misrepresentation means a false representation of the fact.
• According to Section 18 of the Indian Contract, Act Misrepresentation is the stating of deceiving information which results in the assertion of the other party into entering into a contract and subsequently undergoing loss. The information, however, presented by the guilty party is a result of genuine belief about the matter. Misrepresentation is said to be committed Firstly when the person deceiving positively asserts not warranted information to another misleading them somehow. Secondly, there is a breach of duty which has caused the prejudice of one or another to be at stake. Lastly, a mistake has been committed by another because of the act or information of the one misrepresenting them.

Characteristics

• It should be mentioned that the false statement was of material fact and not mere words.
• When a party makes a misrepresentation to the other party, it should be proved that at the party believed the fact to be true.
• The party should have misrepresented the facts to induce the other party to enter into a contract.

Kinds

There are two kinds of misrepresentation

Negligent misrepresentation

• When misrepresentation occurs due to lack of any reasonable ground and carelessness then it is known to be a negligent misrepresentation.
• Negligent misrepresentation is established only when the representative owed a duty to the representee to handle carefully.
• A person would be liable only when he had neglected the duty mentioned in particular.
• The responsibility exists between the two parties even when there is no fiduciary relationship.

Innocent misrepresentation

• When the representation is based on good grounds to believe and it lacks negligence and fraudulent intention, then it is said to be an innocent misrepresentation.
• When a person enters into a contract with innocent misrepresentation has the right to revoke the contract but is not entitled to damages suffered.
• A contract won’t be void unless reasonable grounds are provided. Proving innocence in misrepresentation would be enough to establish the fact.

Effect of misrepresentation

When the party who has suffered due to the misrepresentation while entering into a contract, can opt to cease the contract. There are two remedies provided to the party either to rescind the contract or claim damages.

The claim of damages means that the contract is left intact and the party is to be subjected to money damages during the suit.

Suit for rescission is to cease the performance of the contract that is to restore the party to the original position.

The distinction between fraud and misrepresentation

Mistake

According to Section 20 of the Indian Contract Act, a contract is declared void when a mistake is caused by both the parties that bilateral mistake, which violates the essentials to an agreement.

Illustration 

“A” made agreement with “B” to sell the goods and the agreement was done. “A” was not aware of the fact that the goods are perished due to some reason. In this case, the contract would be void because the basis on which the contract was made does not exist.

Mistake of law

People should have minimum knowledge about the law, they should be aware of the fact that which act they should restrain from doing and which they are ought to do. And there would be no remedy provided or excused under the fact of mistake of law in these circumstances.

In the case of Ram Chandra v Ganesh Chandra[7], it was seen that the complainant entered into an agreement of lease of coal mining with the respondent. As per the agreement, the complainant made payment in advance to the respondent. But the Privy Council and the decision of the Calcutta High Court questioned the understanding of the law between the parties. Thus the complainant refused to continue the contract and sued the respondent for the refund. Taking precedent of Cooper v Phibbs, it was held that the complainant would be entitled with the refund paid by him.

Mistake of fact

When there is a bilateral mistake causing a contract void, it is subjected to a mistake of fact and not to mistake of law. When there is a misunderstanding between the parties or omission of facts which leads to the mistake, is said to be a mistake of fact.

Bilateral

When both parties commit a mistake in the contract under the mistake of facts, the mistake is considered as a bilateral mistake. This happens due to the lack of meeting of minds, which is an essential element to constitute free consent. Thus the contract is made void.

There are two types of bilateral mistake

1. Mutual mistake
2. Common mistake

Illustration 

“A” agrees to sell his car to “B”. but it was found that his car was stolen and he was not aware of the fact while making the agreement. Thus this contract would be considered void.

Bilateral mistake as to the subject matter

Existence of subject matter

When both parties have made an agreement on a subject matter which does not exist, then the contract would be considered void.

Quality of the subject matter

When both parties have made an agreement on a subject matter and it is found that the quality differs from the one which was mentioned. But in the case of bilateral mistake, the contract would be considered void.

Identity of subject matter

When both parties have made an agreement on the identity of a subject matter and it differs than the contract ceases to be void.

Mistake as to the possibility of performing the contract

Physical impossibility

When an agreement is made and it is found that the subject matter is not available anymore, then it becomes impossible for the parties to execute their part of the obligation. This is considered to be a physical impossibility to perform, thus the contract becomes void.

Illustration 

“A” made agreement with “B” to sell the goods and the agreement was done. “A” was not aware of the fact that the goods are perished due to some reason. In this case, the contract would be void because the basis on which the contract was made does not exist.

Legal impossibility

When an agreement is done between two countries, but it is seen that war arises between the countries. Thus the contract between the countries becomes legally impossible to be carried out.

Illustration

“A” one country enters into a contract with “B” another country to export petroleum with an agreement for 20 years. But after 10 years it was seen that there was a situation of war arising, thus all the internal export was stopped. In this case, “A” is legally bound to end the contract with “B”.

To know more in detail about Free Consent, Please Click Here.

Reference 

[1] [1949] 2 AII ER 1107

[2]  (1917) 32 MLJ 494

[3] (1932) 34 BOMLR 222

[4] AIR 1994 Ori 111

[5] ILR 1974 Delhi 689

[6] [1989]2 AII ER 952

[7] 39 Ind Cas 78

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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 of child labour in India and the legal regime around it.

Introduction

Children are always considered close to God. They are considered as bringer of happiness, joy and hope, no matter where they go. The future of the nation depends on the children as they are undoubtedly the stepping stone in shaping the future of any nation. If a nation treats its children properly and provides them with the basic facilities then it would get reflected in the future performance of the nation. The moral duty of the nation is to ensure that the childhood of every child is protected. 

Child labour definition 

Child labour is a global phenomenon, it is not restricted to only one country. “Child labour” is defined as the employment of children in any manual work. According to the Child Labour (Prohibition and Regulation) Act, 1986, a “child” is a person who has not yet attained the age of 14 years. In this tender age where a child is expected to grow, enjoy his or her childhood to the fullest, seek education, gain a strong value system, he/she is forced to work and earn a living for himself/herself and his/her family. It not only affects his/her physical and mental development but it also puts a very heavy burden of responsibility on the child to support his/her family. It is frequently observed that the children are forced to become labour due to some hardships like lack of strong financial support, lack of proper food, clothing, shelter, livelihood etc.

International Labour Organisation [ILO] defines child labour as a work that not only affects their childhood but also doesn’t let the children attend the school regularly, or have a proper education. Child labour also deprives children of their dignity, potential and childhood. Children working below the age of 14 years are not able to develop mentally, socially, physically or morally[1]. 

A different definition of child labour is given by the United Nation’s Children’s Fund [UNICEF]. According to it, a child is considered as labour when:

1. His/her age is between 5 to 11 years, and 
2. At least 1 hour of economic activity is performed by him/her or he/she is doing at least 28 hours of domestic work in a week. 

If the children are between 12 to 14 years of age then either they should be doing at least 14 hours of economic activity or at least 42 hours of domestic work per week to be considered as child labour[2].

According to India’s Census 2001, when a child below the age of 17 years participate in economic activity with or without compensation, either physically, or mentally, or both ways. Part-time help or unpaid work on farms, a family business or any other economic activity like cultivation and milk production for sale or domestic consumption will be included in child labour. Child labour is classified into two groups in India:

1. Main workers: Main workers are those workers who work for at least some months or more per year, and
2. Marginal child workers: Marginal child workers are those workers who work for less than 6 months in a year and work at any time during the year. 

Child labour issue

Child labour is a major issue not only in India but in every developing country because it destroys a child’s physically as well as mentally. Because of poverty, child labour has become more prevalent, not only in India but globally. Children are the hope and future of a nation that is why it constitutes a social problem. Many laws have been enacted in order to prohibit child labour, however they haven’t been effective in curbing the problem. The statistic report of 2017 explains that India is one of the leading countries in Asia as it has 33 million children employed in child labour. According to the 2011 Census, total child population was 259.6 million out of which 10.1 million are either working as main worker or as marginal workers[3].

Causes of child labour

Poverty, illiteracy of parents, social and economic circumstances of the family are the main causes of child labour. Lack of awareness related to the harmful effects of child labour and lack of access to basic and quality education, cultural values of the family and the surroundings of the society in which one is living, also increase the rate of child labour. High rates of unemployment and under-employment also play a vital role in child labour.

Children who discontinue school due to family indebtedness or are expelled from the school are more prone to child labour. Girls from socially disadvantaged groups are at a higher risk of being forced into child labour.

Causes of child labour in India

In India, the major causes of child labour are:

1. Poverty: Children are considered helping hands of their family. In developing countries, it is almost impossible to control child labour as children not only have to support themselves but their families also and provide them with a living. Due to poverty, the rate of unemployment and underemployment are also very high and so the parents have to send their children to work on low wages.
2. Previous debts: Due to their poor economic condition people take loans. But they don’t have sufficient money to pay back the loans so they not only work day and night to pay off the loans but they also drag their children to work so that the loan could be paid off before time and easily.
3. Professional needs: Some industries require delicate and soft hands rather than rough hands that are required in bangle industries. So they prefer children and not adults for such work.
4. Bonded labour: Children often work for long hours in the sun and they are deprived of water, food. These children are seldom paid. Bonded labour further adds to the large scale increase in child labour.
5. Domestic help: Small children often work for educated families and irrespective of several laws that violate the employment of children, they often welcome small children so that these children can take care of their homes as well as their children.
6. Child sex workers: Often, girls who attained the age of puberty are forced into prostitution in lieu of a promise that they would be given opportunities to do glamorous jobs.
7. Forced begging: Families who can’t support themselves force their children to beg on the roads in subhuman conditions. They get their children maimed in order to get more money from the people. 

Consequences of child labour

Children are prone to accidents and many other types of hazards at the workplace. Such injuries cause them social and economic harm, the effect of which continues for their entire lives. General injuries like cuts, burns, lacerations, fractures and dizziness are very common. Sexual abuse, STDs, HIV/AIDS, drugs, alcoholism, sexual exploitation of girls, rape, prostitution are also the consequences of child labour. They also face physical neglect in food, clothing, shelter and medical treatment. Because of this, they are not able to go to school which deprive them of basic education due to which they have to live in poverty. Emotional neglect is also the consequences of child labour. Children are prone to physical abuse including beating which often leads to a physical deformity. 

Consequences of child labour in India

Child labour affects the economic welfare of a country to a great extent. Children who work are not able to get an education and they are not able to develop themselves physically, intellectually, emotionally, and psychologically. Children are neither equal to adults nor do they have the strength that the adults have and so they are not able to work for longer hours because they totally become exhausted and this reduces their physical strength which makes them more prone to diseases.

For India, child labour has long term adverse effects. The economy of a country will only prosper when the country will have an educated workforce, skills, technology and the younger generation will be a part of human capital in the future. If child labour at a huge extent continues then there will be a trade-off with human capital accumulation. 70% of child labour is employed in agriculture because it requires less skilled work whereas other children are employed in heavy industries.[4]

Types of child labour in India

There is an increasing involvement of children in home-based work and in the informal sector. Children are involved in the domestic, manual, agricultural sector, in hazardous factories, rag-picking, beedi-rolling, matchbox, brick kilns etc.

According to ILO, the worst types of child labour are:

1. Slavery: Slavery is when one person works for another person. Slaves don’t have the power to demand anything. They have to work according to the commands of their master.
2. Child Trafficking: Buying and selling of children either for labour or for sexual exploitation.
3. Debt Bondage: When people cannot pay off their loans with their money and belongings they are often forced to work as a labour.
4. Serfdom: When a person works on land that belongs to another person, it is known as serfdom. The labour will either be provided with some pay or no pay will be given.
5. Forced Labour: When a child works against his/her will then it is termed as forced labour. 
6. Beggary: When poor parents don’t have any other way to earn a living they often beg on roads. They also cut their child’s body part in order to gain sympathy and to get more money. Small children are seen on red lights asking for money for their treatments. 

Effects of child labour

Child labour is not something that needs recognition, in fact, if there is an increase in child labour then it shows that the country has failed in providing basic necessities to its citizens, especially children. In such cases, the effects of childhood are only negative. It not only deprives a child of a proper childhood but also make them the victim of physical or mental torture. The child becomes emotionally and mentally mature at an early age which is not a good sign. It does not create but also extends poverty as the child is not able to get basic education and he earns very less amount of money due to this, for his/her family. The child is also paid less. Other effects of child labour are:

1. Children might suffer from malnutrition, drug dependency and depression.
2. It might endangers children dignity and morals.
3. Children may be employed forcefully and they may be sexually exploited.
4. They might become victims of sexual and physical violence.

Child labour laws in India

As compared to other countries, child labour in India is more prevalent. Out of 179 million children, 90 million who are in the age group of 6 to 14 years are employed and they don’t go to school. It contributes to 50% of children in our country who are involved in child labour. Since 1933, various laws have been made in India to control child labour. These laws include:

1. Minimum Wages Act, 1948: The State Government fixes minimum wages that are to be provided to the workers/labourers including the child labourers. The government fixed wages according to the type of work and according to the class of workers.
2. The Plantation Labour Act, 1951: This Act prohibits the employment of children below the age of 12 years, but a child above the age of 12 years can be employed only when the appointed doctor issues a fitness certificate to that child.
3. The Mines Act, 1952: This Act provides that no child should be present where the work of mining is going on and no child should be employed for such work.
4. The Merchant Shipping Act, 1958: Except for a training ship, this Act does not allow the employment of children below the age of 14 years in a ship. Also, a person under the age of 18 years cannot be appointed as trimmers under this Act. They can only be appointed under some specific conditions mentioned in this Act.
5. The Apprentices Act, 1961: Unless a child attains the age of 14 years and satisfy the standard of education and physical fitness test, he cannot undergo an apprenticeship training.
6. The Indian Factories Act, 1948: No child below the age of 14 years shall be employed in a factory. Also, there are rules that a factory has to follow if they employ pre-adults that are between 15-18 years of age.
7. The Child Labour (Prohibition and Regulation) Act, 1986: No child who is less than 14 years of age shall be employed in any hazardous occupations that are provided in a list by law. This list is explained further in the article. This list was amended not only in 2006 but also in 2008.
8. The Juvenile Justice (Care and Protection) of Children Act, 2000: If any person employs a child in any of the hazardous work or use the child as a bonded labour then that person will be punishable under this Act.
9. The Right of Children to Free and Compulsory Education Act of 2009: Free and compulsory education must be provided to each and every children below 14 years of age. In fact, to follow this Act efficiently, 25% of seats are also reserved in every private school for children who belongs to the disadvantaged group and for children who are physically challenged. 
10. Other Acts are:

• Children (Pledging of Labour) Act, 1933.
• Employment of Child Act, 1938.
• The Bombay Shop and Establishment Act, 1948.
• The Motor Transport Workers Act, 1961.
• The Atomic Energy Act, 1962.
• Bidi and Cigar Workers (Condition and Regulation) Act, 1986.
• State Shops and Establishment Acts 

Children below the age of 14 years are not allowed to work in a factory and it is expressly provided in Article 24 of the Indian Constitution and Section 67 of the Factories Act, 1948.

Free and compulsory education for all children up to the age of 14 years is provided by the Directive Principle of State Policy under Article 45 of the Indian Constitution.

Child labour laws in India its implementation and consequences

According to the Child Labour (Prohibition and Regulation) Act, 1986 a child below the age of 14 years cannot be employed in 16 occupations and 65 hazardous processes that are dangerous to the life of a child. These occupations and processes are mentioned in Part III of this Act. The list of hazardous occupations is provided in the schedule in two parts:

1. Part A, and
2. Part B.

Part A lists down various occupations that prohibit the employment of children. These are:

1. A child should not be employed in any occupation which is related to the transportation of passengers, goods and mail by railway.
2. A child should not be employed in a building operation in railway premises or picking up cinder and cleaning the ash pit. 
3. Occupation related to travelling from one platform to another or moving out of the train. It also includes any work related to the construction of the railway station.
4. No child should be employed in a catering establishment at a railway station or any work which is close to the railway lines.
5. No child is allowed to be employed by the port authority which is within the limits of any port.
6. Shops that sell crackers and fireworks on the temporary license cannot employ children. 
7. Slaughterhouses/ Abattoirs cannot employ children. 
8. Employment of children are not allowed in garages and Automobile workshops 
9. Workshops related to plastic units and fibreglass cannot employ children as workers. 
10. Mines that are underwater and underground cannot use child labour.
11. Industries related to handloom and power loom are prohibited from using children as labourers. 
12. Industries that involve the use of inflammable substances or explosives cannot employ children.
13. Children cannot be employed in foundries.
14. It also includes occupations that involve children as domestic workers or servants. 
15. Employment of children is also prohibited in dhabas, restaurants, hotels, tea stalls, shops, spas or any other recreational centres. 
16. Diving is also included. 
17. Children are not allowed to work in a circus. 
18. Children cannot take care of an elephant.

Part B lists down various processes in which no child should be employed. These are:

1. Processes which includes beedi making.
2. Processes like carpet weaving.
3. Companies related to the manufacturing of cement, as well as bagging of cement, cannot employ children.
4. Cloth weaving and dyeing are not allowed to employ children as workers. 
5. Matches, explosive and fireworks manufacturers are cannot employ children.
6. Processes like mica cutting as well as splitting cannot employ children.
7. Industries which involves shellac manufacture cannot employ children.
8. Soap manufacturing units cannot use children as their labour.
9. Tanning.
10. Jobs which involve wool cleaning cannot involve children.
11. Industries related to building and construction are prohibited to employ children.
12. Manufacturing units related to slate pencils as well as their packing are not allowed to employ children as labourers. 
13. If toxic metals and substances like lead, mercury, manganese, cadmium, benzene, pesticides, asbestos, chromium are used in an industry then such manufacturing industry cannot employ children.
14. If products of agate are manufactured in any industry then such units are not allowed to employ children. 
15. This part includes all those hazardous processes and dangerous occupations that are defined in Section 2(cb) of the Factories Act, 1948.
16. It includes all the processes that are notified in the rule that is made under Section 87 of the Factories Act, 1948. 
17. Printing is also included which is defined under Section 2(k) of the Factories Act, 1948.
18. Processing and descaling of cashew and cashew nuts cannot employ children as labour.
19. Process of soldering that is present in electronic industries also prohibits child labour. 
20. Dent beating, printing, welding lather work that is mainly present in automobile repairs and maintenance are prohibited from having child labours.
21. It also includes brick kilns and roof files units. 
22. Hosier goods production, processing and ginning of cotton units cannot seek help from children.
23. Manufacturing of detergent units cannot employ children as labour.
24. Ferrous and non-ferrous fabrication workshop units cannot employ children as labour.
25. Polishing of gem and its cutting are not allowed to have child labour.
26. Where the work requires proper handling of chromites and manganese ores cannot employ children as labour.
27. Manufacturing of textile and the making of coir are not allowed to have child labour.
28. Manufacturing of lime and lime kilns. 
29. Lock making units are not allowed to have child labour.
30. Units which involves manufacturing of glass, glassware, bangles, fluorescent tubes bulbs and other glass products cannot employ children as labour.
31. It also includes processes that involve exposure to lead like primary and secondary smelting, welding etc. and works related to manufacturing of cement pipes, cement products are also included in this.
32. Dyes manufacturer. 
33. Units, where insecticides and pesticides are manufactured, cannot employ children as labourers.
34. Where factories deal with handling and processing of corrosive and toxic substances, metal cleaning and photo enlarging, cannot employ children as labourers.
35. Units where coal is burned and there is the presence of coal briquette cannot employ children as labourers. 
36. Sports goods manufacturing which also involves synthetic materials, chemicals and leather cannot employ children as labourers.
37. Fibreglass and plastics moulding and processing units cannot employ children as labourers.
38. Oil-expelling, refinery units cannot employ children as labourers.
39. Units which makes the paper cannot employ children as labourers.
40. Industries related to potteries and ceramic cannot employ children as labour.
41. Units, where moulding, cutting, polishing, welding and manufacturing of Brass goods is done, are not allowed to have child labourers. 
42. In agriculture, children are not employed where tractors, threshing and harvesting machines are used. 
43. All processes that included in sawmill are not allowed to have child labourers. 
44. Processes related to sericulture are not allowed to have child labourers. 
45. Lather products manufacturing, skinning dyeing are not allowed to have child labourers. 
46. Crushing and breaking of stone units are not allowed to have child labour. 
47. Manufacture of tobacco, its paste or handling it in any form is not allowed to have child labourers. 
48. Activities that are related to graphite beneficiation, tyre making and its repairing, re-trading are not allowed to have child labourers. 
49. Polishing of utensils and buffing of metal units cannot employ children as labourers.
50. All processes related to Zari making cannot employ children as labourers.
51. Manufacturing units related to incense stick cannot employ children as labour.
52. Electroplating. 
53. Processes that include graphite powdering and incidental processing cannot employ children as labour.
54. Units cannot employ children as labour.
55. Industries, where diamond cutting and polishing is done, cannot employ children as labour.
56. Units that extract slate from mines cannot employ children as labour.
57. Children are not allowed to do rag picking and scavenging. 
58. The processes which involve exposure of children to either excessive heat or excessive cold. 
59. Mechanised fishing is also included in this. 
60. Food processing units cannot employ children. 
61. Children cannot work in the beverage industry. 
62. Where there is work like timber handling and loading children cannot work there. 
63. Mechanical lumbering.
64. Warehousing is also included in this. 
65. It also includes processes which include exposure to stone grinding, stone quarries.

Also, on 10th December 1996, the Supreme Court issued a direction which provided for the recovery notice that was issued to the offending officers to collect a sum of Rs. 2,000 per child that was employed under the provision of the Child Labour (Prohibition and Regulation) Act, 1986. A child should not be employed in hazardous occupations. Moreover many states including Haryana have opened child labour rehabilitation cum welfare funds. This is opened at a district level. Separate labour cells have also been made to address the issue of child labour. To provide non-formal education and pre-vocational skills, in 1998 National Child Projects have been implemented by the Central Government. To educate poor and employed children in all the states Sarv Shiksha Abhiyan have been launched in 2001. Non-formal education and vocational training are provided by the Ministry of Women and Child Development. For children’s welfare and their physical, mental, educational development Anganbadies have also been set up.

Obstacles in the proper implementation of child labour laws

The big obstacle in the proper implementation of child labour laws are as follows:

1. Non-awareness: Non-awareness among people about the labour laws in India is a cause for its poor implementation.
2. Poverty: There is a vicious circle of poverty. Many families live below the poverty line and they cannot support their living so they send their children to work. 
3. Illiteracy: People who are illiterate are not aware of the rules and regulations due to lack of education. 
4. Lack of political will: Another obstacle is lack of political will as well as the ineffective role played by the government in removing child labour.
5. Lack of efficiency: Due to inefficient administrative machinery the labour laws are not implemented properly.
6. Unemployment: People are not able to earn due to unemployment so they send their children to work in order to earn more.
7. Will of parents: Some parents don’t wish to send their children to school rather than they send them to fields to work for them.
8. Lack of educational and health facilities: Due to the lack of these facilities labour laws are not implemented properly.

Child labour (Prohibition and Regulation) Amendment Rules, 2017

With the consultation of the stakeholders, the Government of India amended the Child Labour (Prohibition and Regulation) Central Rules, 1986. Broad rules were provided on prevention, protection, prohibition, rescue and rehabilitation of child and adolescent workers. Artists have been provided with safeguards like working hours or working conditions. These safeguards are provided to those who have been given permission to work under this act. It also gives the definition of family with respect to the child. It lays down the duties and responsibilities of enforcement agencies so that all work is done according to the provisions that are provided in this act.

Child Labour (Prohibition & Regulation) Amendment Act, 2016

This Act came into force on 1.9.2016. This act completely prohibits the employment of children who are less than 14 years of age and adolescent employment in case of hazardous occupations and processes. This Act also regulated the working conditions where the employment of an adolescent is not prohibited. This Act also provides for punishment in case of violation of any provision of this Act and the employment of children below the age of 14 years would be considered as a cognizable offence. The Appropriate Government can empower the District Magistrate with some powers and duties for the enforcement of the provisions of this Act. For effective implementation of this Act, the State Action Plan is provided to all the States/Union Territories.

Child Labour (Prohibition and Regulation) Act, 1986

This Act provides the definition of a child. It states that a child is a person who has not yet completed 14 years of age. This Act not only regulates the hours of work but also the working conditions of child labourers and prohibit employment of child labour in hazardous industries. Article 24 of the Indian Constitution provides that no child who is less than 14 years of age should be employed in any hazardous industries.

Child Labour Act, 1986

The employment of children who are less than 14 years of age is prohibited by various acts but neither a procedure was laid down for this nor there were provisions made to regulate the working conditions of the child labourers who were employed in exploitative conditions. So, for this, a comprehensive Act was enacted known as the Child Labour (Prohibition and Regulation) Act, 1986. For this, a bill was introduced in the Parliament called the Child Labour (Prohibition and Regulation) Bill to achieve these objectives. After the recommendation made by Gurupadswamy Committee 1976, the Child Labour Act 1986 was passed on 23 December 1986. It was the Act number 61 of 1986.

This Act is divided into four parts which include 26 Sections and two Articles A&B. The act is as follows:

1. Part I: Preliminary. It includes Section 1 which talks about the short title, extent and commencement of this Act and Section 2 talks about the various definitions that are included in this Act.
2. Part II: Prohibition of Employment of Children in Certain Occupations and Processes. It includes Section 3,4,5 of this Act. There are two Articles A&B that are concerned with Section 3. Section 3 lists down various occupations and processes that are already mentioned whereas Section 4 talks about the power to amend this Act and Section 5 states that the Central Government is empowered to form a Child Labour Technical Advisory Body.
3. Part III: Regulation of Conditions of Work of Children. It includes Section 6 to 13 in it. Section 6 includes an application that can be filed, Section 7 talks about the hours and period of work whereas Section 8 talks about the weekly holidays. Section 8 states that how can a notice to the inspector is filed and Section 10 talks about what to do when there is a dispute as related to the age. According to Section 11 maintenance of register is compulsory and Section 12 and 13 talks about other formalities.
4. Part IV: Miscellaneous consists of Section 14 to Section 28 of the Act. This part talks about provisions related to penalties, the appointment of inspectors, the power to make rules, the power to remove difficulties etc.

Child Labour Act, 2016 

The Child Labour (Prohibition and Regulation) Amendment Bill, 2016 was passed by the Parliament in July 2016. This Act not only amends the Child Labour Prohibition and Regulation Act, 1986 but also widen its scope and provides for strict punishments in case of its violation. The Child Labour Prohibition and Regulation Act, 1986 ban the employment in 83 hazardous occupations and processes for the children who are less than 14 years of age. The salient provisions of this Act are as follows:

1. In every occupations and enterprise, this Act completely prohibits the employment of children who are less than 14 years of age. But if the child is employed in a family business and his/her education is not hampered then he/she can continue to be employed.
2. A new category of persons is added in this act which is known as “adolescent”. These are the children who are more than 14 years of age but less than 18 years. They are prohibited to take employment in any hazardous occupations.
3. Child labour is made a cognizable offence through this Act. If a child is employed when he/she is less than 14 years of age then the employer will be liable for imprisonment from 6 months to 2 years or he/she will be liable for a penalty of twenty thousand or fifty thousand or both for the first time. But in the case of a habitual offender, the employer is liable for jail between 1 year to 3 years. If the parent is the offender then a sum of Rs.10,000 is made payable as a fine and the parents are subject to relaxed penal provisions.
4. Rehabilitation Fund for the purpose of rehabilitation of children is created under this Act. 
5. The hazardous occupation is brought down from 83 to 3. The Union Government is empowered under this act to add or delete any occupation from the list that is provided in this act. The three occupations that are considered as hazardous are mining, inflammable substances and hazardous processes that are provided in the Factories Act, 1948. 
6. This Act provides power to the Government to make a periodic inspection to areas where the employment of children is banned. 
7. In order to ensure that the provisions of the law are properly implemented, for this, the Government can give power to the District Magistrate.

After the passing of this Act, now, the Indian law is also aligned with the convention of ILO. A complete ban on child labour is put so that under the Right to Education every child can get a compulsory education. The Act also realised and allowed children to help their families and run their family business. The penalty for violating the provisions of this act is also increased and it is made as a cognizable offence.

Child labour laws in India pdf

One can refer to the Act and can study the provisions in detail. To see the Act click here

1. The Child Labour (Prohibition and Regulation) Act, 1986,
2. Child Labour Act (Prohibition and Regulation), 2016

Constitutional Provisions for Child Upliftment

Various constitutional provisions have been provided for the child upliftment such as:

Article 21A: Right to Education

Article 21A of the Indian Constitution states that free and compulsory education must be provided to each and every child who is between the age of 6 to 14 years. Free and compulsory education must be provided in a manner laid down by the State and in a manner law determines.

Article 24: Prohibition of employment of children in factories, etc.

Article 24 of the Indian Constitution states that no child who is less than 14 years of age shall be employed in any hazardous factories or occupations or industries.

Article 39: The State shall, in particular, direct its policy towards securing

Article 39(e) of the Indian Constitution states that the factories or industries in which labours are employed, the employer should not abuse the health and strength of the workers be it man, woman or children of tender age. It also provides that citizens due to their economic necessity should not be forced to enter into any employment that is unsuited to their age, health or strength.

Legislative Provisions Prohibiting and Regulating Employment of Children

There are some legislative provisions that not only prohibits but also regulate the employment of children. These are:

1. According to the Child Labour (Prohibition and Regulation) Act, 1986 a child is a person who is less than 14 years of age.
2. Section 3 of this Act contains a schedule which provides with various hazardous occupations and processes that abolishes the employment of children. 
3. A Technical Advisory Committee is also constituted under this Act which can add more occupations and processes which they considered hazardous for children. 
4. This Act also regulates the conditions of employment and working hours in all the occupations and processes which are not covered under Part III. 
5. If there is a violation under Section 3 of the Child Labour (Prohibition and Regulation) Act, 1986 then he/she will be liable for penalties under Section 14 of the Child Labour (Prohibition and Regulation) Act, 1986. He/she will be punished with imprisonment not less than three months and it can extend to 1 year or fine which is not less than ten thousand rupees which can also extend to twenty thousand rupees or with both. 
6. The provision of this Act is enforced by the Central and the State Government in their respective spheres. 

ILO core conventions related to Child Labour

International Labour Organisation [ILO] was established in 1919. It is a U.N. agency for setting up the labour standards, develop policies and formulate programmes in order to promote work for all women and men. The ILO brings the government, employers and workers representatives of 187 member states together. Conventions and Recommendations are set up by the International Labour Standards. This was the principal action of ILO. The countries that ratify the conventions of the international treaties and instruments create an obligation which is legally binding with the same whereas the Recommendations are not only non-binding but they set out the guidelines orienting the national policies as well as the actions. There are 8 fundamental conventions of the ILO. These are:

1. Convention number-29: Forced Labour Convention.
2. Convention number-105: Abolition of Forced Labour Convention.
3. Convention number-100: Equal Remuneration Convention.
4. Convention number-111: Discrimination(Employment Occupation) Convention.
5. Convention number-87: Freedom of Association and Protection of Right to Organised Convention.
6. Convention number-98: Right to Organise and Collective Bargaining Convention.
7. Convention number-138: Minimum Age Convention.
8. Convention number-182: Worst form of Child labour Convention.

Convention number 138 that is the minimun age for admission to employment and Convention number 182 that is the worst forms of child labour are directly related to child labour and this is ratified by India.

Convention Number 138 – Minimum Age

The ILO convention number 138 was adopted by the International Labour Conference in June 1973 at its 58th session. This convention is also known as one of the basic human rights conventions. ILO actively takes part to promote its ratification. Any country who ratified it has to undertake:

1. For effective abolition of child labour, each country has to design a national policy. 
2. It also specifies the age for the entry to employment and that age should not be less than the age which is necessary for compulsory schooling. 
3. There should be fully physical and mental development of young people. 
4. There should be a guarantee that the minimum age required for the entry in employment should not compromise the health, safety and morals of the young people and it should not be less than 18 years of age. 

Convention No.182 on Worst Forms of Child Labour

This convention of ILO accompanies the Recommendation number 190. It was adopted by the ILO in its 87th session which was held at Geneva in June 1999. It is referred to as one of the basic “Human Rights Conventions”. The main provisions of this convention are:

1. The term child will be applicable to all the persons under the age of 18 years. 
2.  The worst form of child labour comprises of:

• All forms of slavery and also the practices of slavery. It includes sale, trafficking, debt bondage, serfdom, forced labour, forced labour for use in armed conflict. 
• Procuring or use and trafficking of children for illicit activities. It also includes the production and trafficking of drugs that is defined in some relevant international treaties. 
• Using the child for prostitution or pornography or pornographic performances.
• It also includes any work that not only harms the health but also the safety and morals of the children.

Article 23 of the Indian constitution

Article 23 and 24 of the Indian Constitution provides for the Right against Exploitation.

Human trafficking and forced labour like beggar is prohibited under Article 23 of the Indian Constitution. The term “beggar” was defined when the British Government and the zamindars used to force the people to carry their goods along with them when they move from one place to another, these people were called beggars. This was called forced labour also because no remuneration was provided to such people. Human trafficking is the modern form of slavery as there is an illegal trade of human beings for various commercial purposes like sexual exploitation, prostitution or forced labour. 

The government passed the Immoral Traffic (Prevention) Act, 1956 and the Bonded Labour System (Abolition) Act, 1976 according to the provisions that are provided in the Constitution of India. The State cannot pay workers less than the prescribed minimum wages even if it takes up any relief work. Reasonable wages are to be paid to the prisoners who are sent for rigorous imprisonment. The Supreme Court has provided that if the prisoners are not provided with any such wages then this will not be considered as a violation of Article 23 of the Indian Constitution. The persons who are under simple imprisonment or preventive detention cannot be made to do manual work but they can do the work if they want and they would require wages.

Forced Labour arises not only out of physical and legal force but also out of compulsion due to the economic circumstances. It is completely banned. The Supreme Court of India in the case of People’s Union for Democratic Rights and others Vs. Union of India and others [5] which is also known as Asiad Workers Case provided that when a person provides a service that is a labour service and in return he/she gets remuneration less than the minimum wage then this case falls clearly in the scope of forced labour which is covered by Article 23 of the Indian Constitution.

Minimum age for domestic help in India

According to the Constitution of India, if a child is below the age of 14 years then he/she can not be employed in any factory or mine or any hazardous occupation. The minimum age that is required for employment is 14 years. If this rule is violated then fine and imprisonment can be imposed. For more than six hours a day, no child is allowed to work. These six hours include one hour of rest after three hours of work. Children are not allowed to work at night that is between 7 p.m and 8 a.m and they are also not allowed to do overtime.

Minimum age for hazardous work

The minimum age requirement for hazardous work is 18 years. The children cannot do night work between (22:00 to 6:00) and overtime for more than four and a half hours. All hazardous occupations and processes are defined in the above Article. These are contained in Section 3 of the Child Labour Prohibition and Regulation Act, 1986 in Part A and Part B.

Legal Age for Working in India

Children who are less than 14 years of age cannot be employed in any of the occupations or factories. If employed, the employer will be liable for penalties. And the children who are more than 14 years of age and less than 18 years of age cannot be employed in any of the hazardous occupations or processes.

Children under 14 Years of Age

Any child who has not yet crossed the age of 14 years will not be employed in any occupation. But this restriction is not applicable if the child is employed in his/her own family business and his/her education is also not hampered. Also, a child of this age can work as an artist in industries like audio-visual entertainment, advertisements, films, television serials or any other sports activities but the circus is not included in this.

Adolescents – 14 to 18 Years of Age

According to Section 7 of the Child Labour (Prohibition and Regulation) Act, 1986 no child is allowed to work for more than the prescribed hours. No child will work between 7 p.m and 8 a.m and no child will work for more than three hours per day and the period of three hours can be extended if the child gets a rest interval for one hour. No overtime is allowed.

To employ an adolescent following conditions must be satisfied:

1. The period of work should not exceed three hours. 
2. Work in more than one establishment is not allowed for an adolescent.
3. A holiday of one whole day must be provided to every adolescent. 
4. After working for three hours there should be a rest interval for one hour. 
5. An adolescent can only work for six hours a day and not more than that. 
6. Between 7 p.m and 8 a.m, no adolescent can work.
7. They cannot be forced to do overtime.

Rules for Employing Adolescents

A register with the following information must be maintained by each and every employer employing an adolescent worker:

1. Name and date of birth of the adolescent worker.
2. Hours and periods of work he/she is employed for. 
3. The amount of rest interval provided.
4. The nature of work the adolescent is doing.

The following information must be sent by the employer to the Local Inspector within 30 days of employing an adolescent:

1. Location and the name of the establishment. 
2. The name of the person who has the authority of actual management of the establishment. 
3. Address on which communications can be sent.
4. The nature of processes or occupation that is carried out in the establishment. 

Punishment for Violation of Child Labour Laws

The punishment that is provided in case of violation of labour laws are:

If there is a violation under Section 3 of the Child Labour (Prohibition and Regulation) Act, 1986 then the employer will be liable for penalties under Section 14 of the Child Labour (Prohibition and Regulation) Act, 1986. He/she will be punished with imprisonment for not less than three months and it may be extended to 1 year or fine which is not less than 10,000 rupees which can also extend to 20,000 rupees or with both. If the offender is liable for continuing offence under Section 3 of the Child Labour (Prohibition and Regulation) Act, 1986 then he/she will be punishable for not less than 6 months and it can extend to 2 years.

Child labour policies in India

Following are the child labour policies in India:

National Policy on Child Labour

Policy

The National Policy of Child Labour that was incorporated in August 1987 provides the action plan that tackles the problem of child labour. It contains:

1. The legislative action plan. 
2. General development programmes for the benefit of every child.
3. Project-based action plans that launch the projects in the areas where there is a huge amount of child labour, for the welfare of children.

To rehabilitate the children who are involved in child labour the National Child Labour Policy [NCLP] was started. At first, it aims at rehabilitating the children that are employed in hazardous occupations and processes. For this, the sequential approach was adopted. After the survey on the children that are employed in hazardous occupations and processes, an order was given to withdraw children from those occupations and to provide them with schooling in special schools.

Legislative Action Plan

This plan was formulated for the strict implementation of the Child Labour (Prohibition and Regulation) Act, 1986 and other labour laws. It was made to withdraw the children that are employed in hazardous occupations and processes and make sure that the children are not employed in such activities again and also to regulate the working conditions of those children who are involved in non-hazardous employment. This plan can also identify other occupations and processes as hazardous if they are detrimental to the health and the safety of the children.

Government has been actively taking steps to tackle the problem of child labour by enforcing strict legislative provisions and by providing rehabilitation centres. State Governments have developed various authorities and they have been conducting regular inspections as well as raids to areas where there are cases of violation. Poverty is the root cause of this problem so the State Government is providing the rehabilitation centres in order to improve the economic conditions of poor families.

Right to Education Bill

In 2009, the Right to Education Bill was introduced by the Government of India in order to make education reach everywhere. Implementing this Act at the grassroots level will help to eradicate child labour. 

Rehabilitation of Children Working in Hazardous Occupations

By setting up special schools, the Government of India has formulated a programme in order to remove child labour from hazardous occupations and rehabilitate them. Till now, around 2 million children are withdrawn from the hazardous occupations and processes and are enrolled in special schools which provide them basic education, vocational training, monthly stipends, nutrition and health checkups.

Child labour still a big challenge

Despite of several laws that are enforced in India which prohibits the child labour still, there are many children who are employed in homes, nearby restaurants and factories across the country. Including sexual and mental abuse, these children are also subjected to various other types of exploitation. June 12 is observed as Anti-Child Labour Day but activists expressed that due to lack of enforcement of the Child Labour Act, 1986 still there are many cases of child labour all around the world. Moreover, we often encounter child labour several times in our daily life whom we called as a “chhotu” yet we make them do our work rather than helping them and putting them in a rehabilitation centre and help them achieve a good life ahead. Child Labour is still a big challenge that needs to combat in our society. 

Role of society in child labour

In society, child labour is affected by various factors like poverty, lack of education, population and industrialization. If there is overpopulation then there will be more number of family members that will lead to more food, so in order to provide a living to their family children have to work, so, in this way, children become the victims of factory owner’s greed. If there is overpopulation then there will be not enough food which will lead to malnutrition, poor education, high birth rates, unemployment/underemployment, unequal wealth distribution, low income, low savings and investments, lack of technology and at last low of productivity. 

When there is industrialization, the huge factories are set up which not only need more labour but also prefer child as a labour. Due to lack of education parents don’t understand the importance of education and send their children to work due to family circumstances. 

Society plays a big role in increasing the child labour because after knowing all about what kind of evil child labour is and how badly it affects the life of a child they still prefer small kids as their workers in large numbers not only because they are unaware about the minimum wages but also due to unawareness about their rights and duties and it serves as an advantage to all the employers. The employers make them work for longer hours and pay less. So in order to protect children from this evil, the attitude of society that one should be benefited in each and every circumstance must change. Every time one should not only think about his/her benefits but sometimes it is good to think about how to save a child’s life rather than making it worse by one’s own conduct.

Initiatives against child labour in India

Many initiatives were taken by the government as well as non-government organisations in order to curb the problem of child labour in India.

Government initiatives against child labour in India

In 1979, the Gurupadswamy Committee was formed to know and find all about the child labour and ways to tackle it. Based on the recommendations of this committee, the Child Labour Prohibition and Regulation Act was enacted in 1986. To rehabilitate children that are working in hazardous occupations National Policy on Child Labour was formulated. In 1988, 100 industry-specific National Child Labour Projects were implemented by the Ministry of Labour and Employment. To combat the growing problem of child labour the Indian Government has provided various numbers of Acts, laws, organizations and institutions. These include the Child Labour Prohibition and Regulation Act, 1986, this Act provides the definition of a child. It states that a person who has not completed the age of 14 years is considered as a child. This Act not only regulates the hours of work but also the working conditions of child labourers and prohibit the employment of child labour in hazardous industries and to rehabilitate the children involved in child labour, the National Child Labour Policy [NCLP] was started in 1988. At first, it aims at rehabilitating the children that are employed in hazardous occupations and processes. For this, the sequential approach was adopted. 

According to the report of Osment, many NGOs like:

1. Care India, 
2. Child Rights and You, 
3. Global March against child labour,

are implemented to combat child labour by providing education and various resources. However, these efforts proved to be unsuccessful.

Non-Governmental Organisations

NGOs are working to protect the children from the evil of child labour. These NGOs include Bachpan Bachao Andolan, Child Rights and You (CRY), Global March against child labour, Talaash Association, ChildFund, Care India, RIDE India, Childline etc. Many public interest litigations have also been filed on the problem of child labour like “PIL on child labour” which is also known as “Hemant Goswami vs. Union of India” [6]. 

In this case, a PIL was filed by a social activist Hemant Goswami. A writ was filed that provided there were violation and non-compliance of provisions of the Child Labour (Prohibition and Regulation) Act, 1986 by the Union and the States. Adv. APS Shergill who appeared for the petitioner also cited examples where children were made to work in Punjab University. They also claimed that when these children are recognized they are more victimised rather than rehabilitated. Goswami and the petitioner Vishavjyoti undertook a survey in order to find the number of child labour in the region. The Court held that the person below the age of 18 years is to be treated as a child. There is now a constitutional obligation to follow the provisions of the Child Labour Prohibition and Regulation Act, 1986 and to provide free and compulsory education for them. Facilities have to be made which provide free education. 

Demography of child labour 

In India, child labour is affected by the factors like poverty, lack of education, population and industrialization etc. According to the Save the Children report, children between 14-17 years of age are engaged in hazardous occupations and processes which is equal to 62.8% of India’s total child labour and there are more boys than girls that is 38.7 million boys are engaged and 8.8 million girls. In rural India, 80% of the children were found working. According to the reports of the United Nations Children’s Fund (UNICEF), there is a 54% increase in child labour in urban areas than in rural areas.[7]

The Campaign Against Child Labour study provides that approximately 12,666,377 child labour is present in India. Uttar Pradesh has 19,27,997 child workers and Delhi, the capital of India has over 1 million child workers. Other states with approximately similar figures are Bihar, Rajasthan, Maharashtra, Madhya Pradesh and Uttar Pradesh.[8]

The National Sample Survey [NSSO] claims that child labour rates are highest among Muslim Indians that is 40% higher than Hindu Indians. There is less child labour in minority religion in India. The rate of child labour in the tribal population is 3.8%. Due to malnutrition, India has more number of child labour that is 48.2% which is equal to Colombia’s population.[9]

According to the report of Children’s Stolen Childhood’s population, 3.1 million children are part of India’s workforce.[10]

CRY

Child Rights and You [CRY] is a non-governmental and non-profitable organisation that was made in order to provide basic children rights to those children who are deprived of it. It was established in 1976. This organisation was started by Rippan Kapur. A simple decision was made by 7 friends to change the lives of India’s underprivileged children. With only 50 rupees and a dining table as resources, these 7 people belief to change the lives of the children who were suffering. This was how this organisation began. This organisation is open for donations so that people worldwide can participate and help in changing the lives of children who are stuck in child labour for a better future. Also, a lot of people can participate in rehabilitating these children by working in this organisation. 

Survival, development, protection and participation are the four basic rights on which this organisation focuses. There are some basic Foundation Principles on which CRY works, these are:

1. Survival: This right is related to the right to life, health, nutrition, name, nationality, in short, it consists of the right to survival.
2. Development: This right aims to provide education, care, leisure and recreation for the development.
3. Protection: This right aims at protection from exploitation, abuse and neglect.
4. Participation: This right aims at providing equal opportunity for participation in expression, information, thought and religion.

These principles are applied to everyone without any discrimination. All categories of children like street children, children of sex workers, physically and mentally challenged children, children who are there in juvenile institutions, children who are there in privileged homes, children who are trapped in bonded labour. 

Mission Statement of CRY is to make people take responsibility of the prevailing situation in India and also motivate them to face the situation by collective actions and give the child and themselves equal opportunities to realise their full potential.

Core CRY Principles

Core CRY Principles are as follows:

1. There should be sustainable changes. 
2. There should be constructive engagement with all the stakeholders.
3. There must be accountability and transparency. 
4. There must be secularism. 
5. There must be non-violence.
6. There should be multi-layered interventions that address services, networking and advocacy.

CRY India

CRY looks for promising and grassroots NGOs and provides them with financial, managerial help so that they can achieve sustainability. They provide various types of support like financial requirement, material requirement, information support etc. Since this organisation was set up, more than 300 child initiatives have been implemented which made a positive impact on the lives of millions of children. CRY is a form of a partner which combines with any other NGO who is in need. Its partnership is in the form of direct action that is working with the children and community directly, building capacities in which they provide inputs in the area of organisation building etc. Through networking, in order to make collective efforts, they bring all the organisations working in the same area together and through influencing they influence the Government to make more child policies to save them from various atrocities. CRY also work with some other NGOs at regional, national or state level. These states are Maharashtra, Orissa, West Bengal, Uttar Pradesh, Rajasthan, Delhi, Tamil Nadu. CRY is a part of various alliances such as Campaign Against Child Labour [CACL], End Child Prostitution in Asian Tourism [ECPAT], Donor Agency Network [DAN] and also with the National Alliance for the Fundamental Rights to Education [NAFRE].

CRY follows simple criteria for supporting and take initiative by focusing on children, nascent initiatives. They give priority to the projects where there are no other projects in force and it works basically on its vision and commitment. 

If someone wants to work with CRY then they can file an application according to the format that is prescribed. The branch will shortlist the application, then after the recommendation from the heads and approval from the Board of Trustees, the selection is done.

CRY offices in India

• CRY-DELHI:

DDA Slum Wing (Barat Ghar), Kotia Mubarakpur,

New Delhi-110003

PHONE NUMBER- 24693137, 4790/3159

FAX NUMBER- 24632302m

EMAIL- ciyinfo.del@crymail.org 

• CRY-MUMBAI:

189 A, Aisand Estate, Sane Guaiji Marg,

Mumbai-400011

PHONE NUMBER-23096845/6472

FAX NUMBER-23080726

EMAIL- cryinfo.mum@crymail.org 

• CRY-BANGALORE:

Madhavi Mansion, 13/3-1, Bachammal Road,

Cox Town, Bangalore- 560005

PHONE NUMBER-25484952/8574

FAX NUMBER-2547355

EMAIL- ciyinfo.blr@mail.org 

• CRY-CHENNAI:

57/2P.S.Sivaswamy

Salai (Sullivan Garden Road), Mylapore,

Chennai-600004

PHONE NUMBER-24996984/24671828

FAX NUMBER-24672407

EMAIL- cryinfo.mds@crymail.org 

• CRY-KOLKATA:

511, Jodhpur Park,

Kolkata 700068

PHONE NUMBER-24148118/8055

FAX NUMBER-24148030

EMAIL- cryinfo.cal@crymail.org

WEBSITE: httpmailto:cryinfo.cal@crymail.orgs://www.cry.org/

How to stop child labour

Child labour can be stopped through various measures. By analysing the situation, reviewing national laws regarding child labour. By taking protective measures like checking the age of the employees, identifying the hazardous works and carrying out a workplace risk assessment, child labour can be brought under control. Immediate actions are required by not hiring children below the age of 14 years, removing children from hazardous work or reducing the hours for children and providing them with at least minimum age can help in lowering the rate of child labour or making the position of these children in the society better. 

Strategic actions like applying a safety and health management system, using collective bargaining agreements, providing a code of labour practices. By supporting education and children that are found trapped in child labour, this problem can be reduced. We should adapt our business to a child labour free environment and make sure that new suppliers don’t use child labour. If required, one or more monitoring systems should be set up.

Conclusion

Child labour is still a problem before the nation. The various measures have been taken by the Government to deal with this problem of child labour actively. However, due to the socio-economic problems like poverty, illiteracy which are the main cause of child labour, it cannot be solved unless and until there are collective efforts of all the members of the society. If every individual takes the responsibility of child labour then this problem can be solved and we can have a better and developed India. If the public supports the functions of the Government then the problem of child labour can be controlled to a great extent. It is important to spread the awareness about the evil of child labour and make people understand that it is important for a child to grow and enjoy his/her childhood as they are future of our country. 

References 

1. https://libguides.ilo.org/child-labour-en
2. http://unicef.in/Whatwedo/21/Child-Labour
3. https://www.ilo.org/newdelhi/whatwedo/publications/WCMS_557089/lang–en/index.htm
4. “Child Labour Crisis in Diamond Industry”. BBC News. 26 October 1999. Retrieved 8 September 2009., “A future without child labour” (PDF). The International Labour Organization, Geneva. 2002. ISBN 92-2-112416-9, “India: Freeing the Small Hands of the Silk Industry”. (Germany). 2010, Tainted Carpets: Slavery and Child Labor in India’s Hand-Made Carpet Sector, Enforcing the ban”. The Hindu. Chennai, India. 20 October 2006. Retrieved 20 October 2009., “Modern slavery and child labour in Indian quarries – Stop Child Labour
5. People’s Union for Democratic Rights and others Vs. Union of India and others,1982
6. Hemant Goswami vs. Union of India, CWP 2693 of 2010/ 9968 of 2009
7. “Save the Children India | Statistics of Child Labour in India State Wise
8. “Save the Children India | Statistics of Child Labour in India State Wise”
9. “Child Labour | UNICEF”
10. Magnitude of Child Labour in India Archived 8 October 2013 at the Wayback Machine Table 12, Section 8.12, Government of India

The post Child Labour laws in India appeared first on iPleaders.

This article is written by Richa Singh of Faculty of Law, Aligarh Muslim University. In this article, she has discussed the meaning of mutual funds and its working in India along with the regulations by which it is managed in the country.

Introduction

The Indian industry of mutual funds is evolving continuously. There are several Indian industries bodies which are investing in investor education. Investing in Mutual funds is still considered a risky option. The types of mutual fund options available to an investor make it one of the most flexible and comprehensive investments that are helpful for the people who are willing to invest.

The regulations of RBI and SEBI on mutual funds make it a safer option to maximize your profits and invest money in something useful.

Concept of mutual funds in India

The name itself suggests that a ‘Mutual fund’ is like an investment channel that helps several investors to combine their resources to purchase stocks, bonds, and other securities for their earnings. 

These combined funds which are referred to as Assets Under Management (AUM) are then invested in a mutual fund company’s manager who has expertise in it. The mutual fund company is called as an Asset Management Company (AMC).

This combined underlying holding of the fund is called the ‘portfolio’ and each investor owns some portion of this portfolio and this portion which the person holds is in the form of units.

History of mutual funds in India

• In India, the industry dealing with mutual funds was established in the year 1963 with the development of the Unit Trust of India (UTI) which was an initiative of the Indian government and the Reserve Bank of India. 
• The SBI Mutual Fund became the first NON-UTI mutual fund in India in the year 1987.
• The year 1993 heralded a new era in this industry of mutual funds as it was marked by the entry of private companies.  
• The SEBI Mutual Fund Regulations came into being in 1996 after the passing of the Securities and Exchange Board of India (SEBI) Act of 1992.
• After this, the Mutual fund companies have extended and grown exponentially with the help of foreign institutions setting companies in India through joint ventures and properties.
• The Association of Mutual Funds in India (AMFI), a non-profit organization, was founded in 1995 as the industry developed. It was formed with the objective of promoting healthy and ethical marketing practices in the mutual fund industry of India. 
• SEBI has made the certificate of AMFI mandatory for all those who are engaged in marketing mutual fund products.

Objective of mutual funds

The objectives of mutual funds are as follows:

• It helps in generating an additional source of income other than the general earnings.
• It helps in financing some of the future needs a person dreams of, such as buying a home, post-retirement plans, education of children and their education, legacy planning, etc. 
• It can help in increasing the savings a person possesses.
• It is useful in reducing tax liabilities. 
• It helps in protecting your savings from inflation.

What is a mutual fund?

A mutual fund is a commercial product that invests in stocks or bonds. 

A mutual fund is a pool of investment which is managed professionally for the purpose of purchasing various securities and culminating them into a strong portfolio that will give you attractive returns over and it will be above the risk-free returns which are currently being offered by the market. 

If you own a mutual fund then it is like getting a slice of an apple. Just like that the investors get units of the fund which are in proportion to their investments. 

For example, if there is a mutual fund that has total assets of $5000 and someone invests $500, he/she will receive 10% units of that fund.

Mutual funds meaning

• Mutual Fund is like a financial vehicle that consists of all the money collected from different investors in securities such as stocks, bonds, and assets.
• It is operated by money managers who allocate the fund’s assets and produce income for the fund’s investors.
• It gives investors access to diversified portfolios at a low price.
• It is divided into several kinds of categories on the basis of investment objectives, kinds of securities they invest in, and the type of return they are expecting.
• It charges annual fees known as expense ratio or in some cases commissions.

How mutual funds work in India

• The working of mutual funds in India is the same as that of the USA. These funds are regulated by SEBI in India.
• In order to start funding, the starters need to have at least 5-year experience in the financial industry. 
• He should have maintained a net worth for 5 years after he gets registered. 
• A minimum start-up capital of about Rs. 500 million and Rs. 200 million is required for open-ended and close-ended schemes respectively.
• SEBI registration is compulsory. After it, the sponsor should form a trust to hold all the assets of the fund either by appointing a new company or by choosing any existing Asset Management Company (AMC).
• The trust’s job is to overlook the funds and it should be done considering the best interests of the shareholders.
• The Asset Management Company manages the portfolio of the fund and then shares the information with the shareholders.
• The funds are invested in various sectors like IT, real estate, etc. 
• In case one sector is unable to perform well then the others will compensate for it and average out the loss suffered.
• The fund managers will send the account statements quarterly to the investors. The financial reports of the fund are also sent to the investors so that they can monitor how the fund is performing.
• Mutual fund investment is flexible in nature and it can be done in many ways as the minimum investment amount is Rs. 500.
• An investor can invest offline, online, directly or through fund managers.
• It provides easy liquidity to investors as one can easily encash the money at the time of need.
• There is a transparency in the investment making since it is under the SEBI guidelines. 
• A monthly report is shared by investors to make the investment more transparent.
• A load fund charges commission on the purchase and sometimes at the time of sale. But no-loan funds are free from commissions.

MF Utility

• MF Utility (MFU) is an application that connects investors to banks, fund houses, KYC registration agencies, registrars, etc.
• MF Utility is a shared service initiated by Amfi subsidiary MF Utilities India. It’s a transaction aggregation portal that enables consumers to invest in multiple schemes in the fund market. 
• It’s a free-of-cost service for those who sign up with the utility.
• The existing investments of investors will not be migrated. After the creation of Common Account Number (CAN), MFU will map the existing folios of investors across all the fund houses to the CAN, based on their Permanent Account Number (PAN) and the pattern.
• All the transactions submitted through Mutual Fund Utility are then forwarded to the respective Asset Management Company (AMC). No change is there in its processing or brokerage.
• For availing the facilities of MF Utility, an investor needs to get himself a CAN number by submitting the CAN registration form. Then, the investors will be provided the login access to MF Utility.
• KYC compliance is required for CAN creation.
• The CAN provides a lot of facilities to the investors and distributors. In order to avail the MF Utility facilities, a CAN number is required. 
• The CAN is not transferable and in case of eventualities, the holders have to request the transmission with MFU India.

Structure of mutual fund in India

• Mutual Funds have a 3-tier system in India.
• The 1st tier is the Sponsor, 2nd tier is Public trust and the 3rd tier is Asset Management Company.
• A sponsor is a person who establishes a mutual fund and is associated with another corporation.
• It is necessary for a sponsor to seek approval from the Securities and Exchange Board of India.
• After the approval, the sponsor has to make the Public Trust as per the Indian Trusts Act, 1882.
• The Trust itself cannot enter into any contract as it does not have any legal identity. So, for that purpose trustees are appointed to act on behalf of the Trust.
• The instrument of Trust must be in the form of a deed agreement between the Sponsor and the trustees of that mutual fund under the Indian Registration Act, 1908.
• After that, the Trust gets registered with SEBI leading to the creation of the fund.
• The trust, when registered, is known as a mutual fund.
• The sponsor and trust are two separate entities. 
• The Trust acts as an internal regulator of the mutual fund. Its main task is to check whether the money is managed properly or not as per the objectives.
• Then the Trustees appoint an Asset Management Company (AMC) to manage the collected money through the mutual fund.
• The approval of SEBI is required for AMCs.
• The Board of Directors of an AMC has at least 50% of independent directors.
• The AMC functions under the control and supervision of its Board of Directors, SEBI and the directions of the Trust.
• AMC floats new schemes in the name of the Trust and manages these schemes by selling and buying securities.
• For this purpose, the AMC needs to follow the guidelines given by the SEBI as per the agreement signed between the company and the Trust. 

Types of mutual funds

Mutual fund types can be classified as:

Based on Asset Class

• Equity Funds 

• These funds, primarily, invest in stocks. 

• • • They invest the money collected from different investors into shares of different companies.
    • The performance of these shares determines the returns or losses in the market.
    • These funds come with quick growth. So, the risk is comparatively higher in investing money in these funds. 

• Debt Funds

• • They invest in fixed-income securities such as bonds, securities, treasury bills, etc. 
  • They have fixed maturity date and interest rates.
  • They are good for a small but regular income and risk involvement is also minimal.

• Money Market Funds 
  • They are for the investors who trade money in the money market ( also known as capital market or cash market).
  • Usually, they are run by the government, corporations or banks by issuing securities like bonds, T-bills, etc. 
  • The fund manager invests the money and disburses regular dividends in return.
  • They are good for short-term plans and are relatively less risky.

• Hybrid Funds 

• • They are also known by the name Balanced Funds. 
  • They are a mix of bonds and stocks, thereby, bridging the gap between Debt Funds and Equity Funds.
  • There is no fixed ratio. It may be variable or fixed.
  • They are good for the investors who are ready to take high risks rather than holding to lower but regular income. 

Based on Structure

• Open-Ended Funds

• • These funds do not have any issue regarding the time period or the number of units.
  • An investor can trade funds and exit whenever he likes at the current Net Asset Value. 
  • This is the reason for the constant changing of its unit capital with new entries and exits. 
  • They may also stop taking in the investors due to management or other problems.

• Close-Ended Funds

• • Their unit capital is fixed and they cannot sell more than a pre-agreed number of units. 
  • They may be deadlines to buy units.
  • The specific maturity period is there and fund managers are open to diverse fund sizes.
  • SEBI mandates that investors under this fund type should be given either the repurchase option or listing on stock exchanges in order to exit.

• Interval Funds

• • These funds have the characteristics of both Open and Close-Ended Funds.
  • They have a specific time to purchase and exit the scheme and it should be done at intervals only. 
  • No transactions will be permitted, under this type of fund, for at least 2 years.
  • These are suitable for those investors who want to have a lump amount of savings for an immediate goal.

Based on Investment goals

• Growth Funds 

• • These put a huge portion in shares and growth sectors.
  • They are suitable for those who have a surplus of money to invest in riskier plans or they have some positive belief in the scheme.

• Income Funds

• • They distribute the money in a mix of bonds, certificates of deposits and securities.
  • They have historically earned investors better returns than deposits.
  • They are best suited for investors who are risk-averse from a 2-3 years perspective.

• Liquid Funds

• • They also belong to the debt-fund category as they invest in debt instruments with a tenure up to 91 days.
  • The maximum amount you can invest is Rs. 10 Lakhs.
  • The difference between liquid funds and debt funds is the calculation of the Net Asset Value (NAV).
  • NAV of liquid funds is calculated considering all the 365 days including Sundays but others are calculated considering business days only.

• Tax-Saving Funds

• • Equity Linked Saving Scheme is gaining popularity these days as it serves double benefits as well as save on taxes in the lowest lock-in period of 3 years.
  • They make you earn non-taxed returns from 14-16%.
  • They are best suited for long-term investments by salaried investors.

• Aggressive Growth Funds 

• • They are a bit risky and are designed to make steep monetary benefits.
  • They should be chosen as per the beta (a tool to gauge the movement of the fund in the market).

• Capital Protection Funds

• • They are to protect your principal amount.
  • In order to serve this purpose, they earn relatively small.
  • The fund manager invests the amount in bonds and the rest in equities.
  • The incurrence of loss is nil.
  • You need at least 3 years to safeguard the money you invested and the returns will be taxable.

• Fixed-Maturity Funds

• • In order to bring down the tax burden, investors go for this funding scheme.
  • If an investor is uncomfortable taking the debt market risks, Fixed Maturity Funds provide a great opportunity.
  • They have a fixed maturity period which could range from 1 month to 5 years.
  • The fund manager puts the investment for the same time period to receive accrual interest at the time of maturity. 

• Pension Funds

• • This fund type is for those who want to put away some amount of their income to secure their financial needs after retirement.
  • They can solve many problems like medical emergency, children’s weddings, etc.
  • Relying only on savings is not recommended though.

Based on Risks

• Very Low-Risk Funds

• These are liquid funds and are short-termed (1 month to 1 year).

• • They are not risky at all.
  • These are low-return funds (6% at best)
  • They are useful in fulfilling small financial needs and in securing their money until then.

• Low-Risk Funds

• • When a currency depreciates or any unexpected national crisis is going on then investors don’t want to take risk of investing money in riskier funds.
  • In such situations, putting money either in one or in a combination of liquid, ultra-short-term, etc. is recommended.
  • Returns will be somewhere between 6-8%.
  • Investors are allowed when valuations of the fund become stable.

• Medium-Risk Funds

• • They are neither very risky nor very safe as the risk factor is of medium level.
  • The fund manager invests a portion in debt and the remaining in equity funds.
  • The average money that one can make out of this is 9-12% and the NAV is not very volatile.

• High-Risk Funds

• • This fund type is suitable for those investors who are aiming for high returns with no risk-aversion.
  • These need active fund management.
  • Regular performance reviews are compulsory in these type of funds as they are highly volatile.
  • The expected return percentage is 15% and more.

Specialized Mutual Fund Types

• Sector Funds

• • These are theme-based mutual funds and they invest in one specific sector.
  • The risk factor is high as the investment is made only in one sector.
  • The sector-trends must be considered while investing in such funds and if decline starts then you should exit immediately.
  • They are not always risky, they also offer great returns.
  • There are some areas like pharma, IT, banking, etc. which have witnessed huge growth in the investment sector and proved to be promising as well.

• Index Funds

• • These are best suited for passive investors.
  • Money is put in an index and is not managed by a fund manager.
  • In this fund type, the identification of stocks and the corresponding ratio is considered and then the money invested is put in a similar proportion and in similar stocks.
  • They cannot outdo the market and that’s why not much popular in India.

• Funds of Funds

• • These are multi-manager mutual funds and diversified in nature.
  • They put money in diverse fund categories.
  • It involves buying a single fund that can invest in many funds.
  • Like this, it achieves diversification as well as save on costs.

• Emerging Market Funds

• • • Investing in an emerging market is considered to be a risky option as it has given negative returns too.
    • India is itself an emerging market and in order to gain high returns, investors often fall prey to market levites.
    • In a long-term perspective, they are helpful and contribute to the growth of the country.

• International Funds

• • • It is for investors who want to spread their investment to other countries.
    • This fund helps them in getting good returns.
    • The concentration of International fund is solely on the foreign market.

• Global Funds

• • • Global funds are different from those of International funds.
    • It includes both – investment markets worldwide and investment in your home country.
    • They are quite risky as it goes through different policies, approach, variations, market, etc.
    • Investing in this market has historically given high long-term returns and acts as a break against inflation.

• Real Estate Funds

• Investing in real estate comes with high risk and people avoid investing in these.

• • • An investor just puts his money in an already established real estate companies indirectly, making him a participant in the investment.
    • It is a long-term investment.
    • It negates risk factors in purchasing a property and has the liquidity to some extent.

• Commodity-Focused Stock Funds

• • • It is suitable for investors who can easily take risks and looking to diversify their portfolio.
    • They give a chance to invest in multiple and diverse trades. 
    • Returns are not periodic. 
    • It is either based on the performance of the stock company or the commodity itself. 
    • The only mutual fund which can invest directly in India is gold. 

• Market Neutral Funds

• • • This is for the investors who want protection from unfavourable market tendencies and it offers good returns as well.
    • This is useful for small investors also.
    • They come with better risk-adaptability.

• Inverse Funds

• • • It is best suited for investors who are looking for diversified trades and have a high-risk appetite.
    • No periodic returns are there.
    • Returns are based either on the commodity of the performance of the company with which stocks are invested.

• Asset Allocation Funds

• • • These are greatly flexible funds as they combine debt, equity, and gold in a ratio.
    • They are helpful in regulating the equity-debt distribution.
    • It requires great expertise in allocating and in choosing the stocks and bonds from the fund manager.

• Gift Funds

• These funds can be gifted to anyone to secure their financial needs in the future.

• Exchange-Traded Funds

• • It is from the Index funds family.
  • It is a fund type which is bought and sold on exchanges.
  • It has unlocked a world of investment prospects.
  • It gives investors exposure to stock markets and specialized sectors.
  • It can be traded in real-time and it falls and rises many times a day.

Regulation of Mutual Funds in India

The term “regulation” means a rule or directive made and controlled by an authority. 

• Mutual funds are regulated by the Securities and Exchange Board of India (SEBI). 
• In 1996, SEBI formulated the Mutual Fund Regulation. 
• SEBI is additionally the apex regulator of capital markets and its intermediaries. 
• The issuance and trading of capital market instruments also come under the purview of SEBI. 
• Along with SEBI, mutual funds are regulated by RBI, Companies Act, Stock exchange, Indian Trust Act and Ministry of Finance. 
• RBI acts as a regulator of Sponsors of bank-sponsored mutual funds, especially in the case of funds offering guaranteed returns.
• In order to provide a guaranteed returns scheme, a mutual fund needs to take approval from RBI. 
• The Ministry of Finance acts as a supervisor of RBI and SEBI and appellate authority under SEBI regulations.
• Mutual funds can appeal to the Ministry of finance on the SEBI rulings.

Who regulates mutual funds in India

• Primarily, mutual funds are regulated by the Securities and Exchange Board of India (SEBI). 
• A mutual fund should have the approval of RBI in order to provide a guaranteed returns scheme.
• The Ministry of Finance acts as a supervisor of RBI and SEBI and appellate authority under SEBI regulations.
• The Association of Mutual Funds in India (AMFI) has been made to develop this Mutual Fund Industry of India on professional and ethical lines and to enhance and maintain standards in all areas with a view to protect and promote the interests of mutual funds and their unitholders.

Advantages of mutual funds

• It offers you professional management. Through mutual funds, investors get access to the professional money managers who have expertise and experience in the field of buying, selling and monitoring investments by the investors.
• It helps you in holding a wide variety of shares at a much lower price than you really could own by yourself. If one investment in the Fund decreases in value that does not mean that the other will also be decreased, it may increase as well. By holding shares in the market you can take advantage of the changing environment in the industry. It helps in diversification. 
• It gives opportunities to the small investors to take part in the professional asset management and they can have low investment minimums.
• Most of the mutual funds allow investors to deal with shares on any business day. Many funds provide you with an automatic purchase program. It is according to the convenience of the investors and helps them in gaining the best out of the money invested.