The article has been written by Ayush Verma, a 2nd-year student at RMLNLU, Lucknow. It discusses various provisions relating to the delivery of property under CPC.

Introduction

When a decree is passed by a Court in the favour of a decree-holder, he needs to apply to the court for execution of the decree. Execution of a decree means the implementation of a judgement given by the Court. The decree is executed against the judgement-holder who has to satisfy the decree when the court orders for such execution. There are many ways through which a decree can be executed. One such way is by the delivery of property.

Section 51(1) of the CPC says that the Court has the power to order execution of the decree, on the application of the decree-holder, by delivery of any property specifically decreed. Provisions in Order XXI provide for delivery of property under CPC.

It is said that justice must not only be done but it must appear to have been done. Therefore, granting a decree is not enough, but the Court has to make sure that such a decree should be properly enforced. Keeping in mind these words, when a Court asks for delivery of a property, it must be enforced properly and the decree-holder has the right to move to the Court where the property has not been delivered to him.

Kinds of property and its mode of delivery

There are two kinds of property:

• Movable; and
• Immovable Property.

There are different modes of delivery depending on the kinds of property.

Movable property

Movable property refers to assets that can be moved from one place to another like vehicles, jewellery etc.

Order XXI Rule 79 reads that where a moveable property is to be sold, of which actual seizure has been made, it shall be delivered to the purchaser. Where a moveable property is in the possession of some person other than the judgement-debtor, the delivery to the purchaser shall be made after giving the notice to the person in possession prohibiting him to deliver the property to any other person except the purchaser.

Order XXI Rule 31 provides that where the decree is for any specific moveable property or for any share in such property, it may be executed by the seizure of that property or share and by delivery to the party to whom it has been adjudged, or to such person who is appointed for receiving delivery on his behalf.

Immovable property

Immovable property refers to real estate property that cannot be displaced like house, factory etc. Order XXI Rule 35 states that where the decree is for delivery of any immoveable property, possession of such property shall be delivered to the party to whom it has been adjudged, or to the person who has been appointed by that party to receive the delivery on his behalf, and, if necessary, by removing any person bound by the decree who refuses to vacate the land. And, where a decree is for the joint possession of immoveable property, it shall be delivered by affixing a copy of the warrant in some conspicuous place of the property and proclamation by beating of drums, or other customary mode, the substance of the decree at some convenient place. Lastly, where possession of any building or enclosure is to be delivered and the person in possession who is bound by the decree does not give access to that property, the Court may, through its officers, after giving reasonable warning and facility to any woman not appearing in public due to the customs of the country, to withdraw, remove or open any lock or bolt or by breaking the door or any other act to put the decree-holder in possession of the property.

Order XXI Rule 36 states that where a decree is for delivery of any immovable property that is in the occupancy of a tenant or any other person who is entitled to occupy such property and is not bound by the decree to relinquish such occupancy, the Court shall make an order for delivery by affixing a copy of the warrant in some conspicuous place on the property, and by proclamation to the occupancy by beating of the drums or any other customary mode at some convenient place, the substance of the decree in regard to the property.

In the case of Mumtaz Jehan v. Insha Allah, it was held that under Rule 35(1) actual possession is delivered by removing all persons bound by the decree and Under Rule 36, symbolic possession is delivered where the property is in occupancy of the tenants entitled to occupy and not bound by the decree to deliver possession.

In the case of Ratan Lal Jain v. Uma Shankar Vyas, it was held that the former is actual or physical delivery of the possession while the latter is delivery of formal or symbolic possession.

The case of Shamsuddin v. Abbas further cleared the difference between the two. It held that the person in actual possession is not physically dispossessed from the property given to him in execution of the decree. While delivery in Rule 36 remains delivery of formal or symbolic possession so far as the person in actual possession is concerned but as against the person bound by such decree, it amounts to delivery to possession.

Resistance to delivery of possession

A situation may arise where the judgement debtor or any other party may resist or obstruct to deliver the decretal property. The decree-holder, in such a case, can move to the court for enforcement of his decree by removal of such obstruction. The provisions related to resistance or obstruction to delivery of possession has been given from Rule 97 to Rule 103 of Order XXI.

Scope of inquiry

The inquiry needs to be done regarding the possession of the decree by a third party or the judgement debtor. If the person resisting to deliver the possession is judgement debtor or any other person claiming through him, then the scope of inquiry would be of summary nature. However, if a third person is claiming his independent right, title or interest in the immoveable property, then the scope of inquiry would be wider. The executing Court can frame the issues and call upon the parties to lead the evidence in their favour.

Nature of Inquiry

When there is a resistance from a stranger to deliver the possession, and which is recognised by the Executing Court as well as by the decree­ holder, the only remedy available to the decree-holder is to move against such stranger under Order XXI Rule 97 sub­rule (1) and he cannot by­-pass such obstruction caused by the stranger and insist on re­issuance of warrant for possession by the help of police force under Order XXI, Rule 35, as that course would amount to by-passing and dodging the procedure laid down under Order XXI Rule 97 for removal of obstruction of purported strangers to the decree. When the Executing Court recognises such obstruction by a stranger to the decree, it is difficult to appreciate how the Executing Court can tell such stranger that he must first lose possession and then only remedy available to him is to move an application under Order XXI Rule 99 and pray for the restoration of possession.

Application by decree-holder or auction-purchaser

Where a decree-holder is resisted or obstructed in execution of the decree for possession and as a result of which, the decree for such possession cannot be executed in the manner as specified under Order XXI Rule 35, then the decree-holder can move an application under Order XXI Rule 97 for removal of the obstruction. The Court in the case Brahma Deo Chaudhary v. Rishikesh Prasad Jaiswal held the same.

And, the Court after hearing both the parties (i.e decree-holder and obstructionist) can pass an order that it finds appropriate, after adjudicating the matter between the parties as given in sub-rule (2) of Rule 97 of Order XXI.

Application by another person

Order XXI Rule 99 states that where a person other than the judgement-debtor is dispossessed of any immovable property by the decree-holder in whose favour the decree was passed, or where such property has been sold in order to execute the decree, by the purchaser, such a person who has lost his property may make an application before the court complaining of such dispossession. The Court has to adjudicate upon the matter between the parties under sub-rule (2) of Order XXI Rule 99.

Hearing of application

Order XXI Rule 105 deals with the provision relating to hearing of application. It states that:

• The Court before which an application is made under any of the foregoing rules of this Order (i.e Order XXI) is pending, may fix a day for the hearing of the application.
• If the applicant does not appear on the day fixed by the Court or any other date to which the hearing may be adjourned, when called for the hearing of the application, the Court may make an order for dismissal of his application.
• Where the applicant appears before the Court but the opposite party against whom the notice has been issued by the Court, it may hear the application ex-parte and pass an order that it thinks fit.

Questions to be determined by the Court

Order XXI Rule 101 states that all the questions (including those related to the right, title or interest in the property) arising between the parties to a proceeding on an application made under Rule 97 or Rule 99 or their representatives, and relevant to the adjudication of the application must be determined by the Court dealing with the application. It further states that these questions shall not be determined by a separate suit and for this purpose, the Court shall, notwithstanding anything to the contrary contained in any other law for the time being in force, be deemed to be vested with the jurisdiction to decide such questions.

Adjudication by the Court

Where an application has been made by an applicant under Order XXI Rule 97, the Court has the power to pass such orders as given in Rule 98 of Order XXI. It states that the Court shall, upon the determination of the questions given in Rule 101, in accordance with such determination and subject to the provisions of sub-rule (2) –

• Make an order allowing the application and directing that the applicant be put in the possession of the property.
• Make an order dismissing such an application.
• Pass such order as it thinks fit keeping in mind the circumstances of the case.

Sub-rule (2) of Rule 98 states that where the Court, after determination of questions as given in Rule 101, is satisfied that the resistance or obstruction was occasioned without any just cause by the judgement-debtor or by some other person at his instigation or on his behalf, or by any transferee, where such transfer was made during the pendency of the suit or execution proceeding, it shall direct that the applicant to be put in the possession of the property. And, if the restriction or obstruction still exists in obtaining possession by the applicant, the Court may also, at the instance of the applicant, order that the judgment-debtor or any other person acting at his instigation or on his behalf be detained in the civil prison for a term which may extend up to thirty days.

Under Rule 100, similar orders (as given in sub-rule (1) of Rule 98) can be passed by the court, where an application is made complaining dispossession.

Transferee pendente lite

Rule 102 of Order XXI talks about “Rules not applicable to transferee pendente lite. It states that nothing in rules 98 and 100 shall apply to resistance or obstruction in execution of a decree for the possession of any immovable property by a person to whom the property was transferred by the judgement-debtor after the institution of the suit in which the decree was passed or to the dispossession of any such person.

Orders to be treated as decrees

Rule 103 of Order XXI states that where an application has been adjudicated upon under Rule 98 and 100, the order made by the Court shall have the same force and be subject to the same conditions as to an appeal or otherwise as if it were a decree.

Subject to the result or pendency of a suit

Order XXI Rule 104 states that every order made under Rule 101 or 103 shall be subject to the result of a suit that may be pending in the Court on the date of commencement of the proceeding in which such order is made if in that suit the party against whom the order under Rule 101 or 103 is made has sought to establish a right which he claims to the present possession of the property.

Conclusion

Delivery of property is an important way of satisfying the decree that is passed in favour of a decree-holder. A decree for delivery of movable property is granted under Rule 31 while Rule 35 and 36 deals with decree granting immovable property. However, a situation may arise where resistance or obstruction is caused in delivery of those properties. In such situations, the provisions given under Rule 97 to 103 can be utilised.

References

• http://mja.gov.in/Site/Upload/GR/Title%20NO.146(As%20Per%20Workshop%20List%20title%20no146%20pdf).pdf
• https://lawtimesjournal.in/delivery-property-takes-place/

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

The post Delivery of Property Under CPC appeared first on iPleaders.

This article is written by Shivangi Tiwari, a second-year student pursuing B.A. LL.B. from Hidayatullah National Law University, Raipur. This is an exhaustive article dealing with Lapse of Offer.

Introduction

The Indian Contract Act defines the meaning of the term “contract” under Section 2(h). According to the Section, a contract is an agreement enforceable by law. Thus there are two essentials to be fulfilled for the formation of a binding contract. Firstly, there should be an agreement between two or more contracting party and secondly, the agreement should have legal enforceability. The term “agreement” has been defined as every promise or every set of promises in exchange for each other which form a set of consideration for each other. Section 2(b) defines the term “promise” as a proposal or offer which is accepted by the offeree.

Every contract is an agreement but not every agreement is a contract. An agreement becomes a contract when the following conditions are fulfilled:

• There should be some consideration in exchange for both the offer and acceptance by the parties to the contract;
• The parties entering into a contract must be competent to enter into it. The competency of parties to enter into parties has been discussed under Section 11 and Section 12;
• The consent of the parties to the contract should be free and should not be vitiated by any of the vitiating factors mentioned under Section 19;
• The object of entering into the contract should be lawful.

The dictionary meaning of “Revocation” is annulling any work which was previously done. In the law of contract, a contract is entered into between two or more parties when one party makes an offer to another with a view to obtaining the assent of the other party to the offer and once the offer of the person is accepted a valid contract is entered. However, the parties to a contract are at the liberty of revoking both offer and acceptance at a later point of time. The procedure and the rules of revocation are laid down under Section 5 of the Contract Act. Revocation is a way of termination of the offer. There are three ways of termination of an offer, the three of them are mentioned below:

• Revocation;
• Rejection; or
• Lapse of the offer.

In this article different ways of termination of the contract have been dealt with in detail.

Notice of revocation

Section 5 of the Indian Contract Act, 1872 provides that any proposal can be revoked by the offeree at any time before the communication of acceptance is complete as against the offeror and not afterwards. The communication of acceptance is complete as against the offeror or the proposer when the acceptance is put in the course of transmission to him and it becomes out of the control of the acceptor. Therefore, in case of communication of acceptance by electronic mail, the communication of revocation to have the effect must reach the offeree before he mails his acceptance thus making it out of his control. It is important that the revocation in order to be effective should be brought into the notice of the person to whom it is made.

In Henthorn v. Fraser, Mr Fraser who was the defendant handed over a note to the complainant which detailed an option for the sale of the property at 750 euros with the condition that the acceptance should be conveyed within fourteen days of such offer. While this offer was considered another buyer approached the defendant and the defendant concluded the contract with him instead. The very next day the defendant informed the plaintiff about the withdrawal of the offer. The note reached the plaintiff after 5 pm and by that time Mr Henthorn had already responded positively to the offer unconditionally at the price which was offered by the defendant. However, the acceptance did not reach the defendant until the next morning and the defendant did not read the acceptance till the very next day when the acceptance reached the defendant. The court, in this case, held that the postal rule laid down by the court in Adam v. Lindsell will apply according to the rule it is reasonable for the offer to take place by post. However, this rule is inapplicable to revocation of the offer. The post was a way to communicate the offer to the offeree but the acceptance is completed at the moment it is posted so as to be out of the control of the offeree. Practically the rule was a reasonable one keeping in view the fact that the two parties stayed at different towns.

Thus, it is a settled principle that the notice of revocation by the offeror should reach the offeree before he has put the acceptance into the course of transmission which shall then become out of his power. The above principle is further clarified by the illustration which is attached to Section 5. ‘A’ by means of a letter proposes ‘B’ his house which was for sale. B accepts the proposal by the means of acceptance sent through a post. In this case, A can revoke his offer at any time before or at the time when B posts his letter of acceptance.

Section 4 and 5 contains the provisions related to the communication of proposal, acceptance and revocation. Section 4 of the Indian Contract Act states the following with respect to the time when communication is complete:

• The communication of a proposal is complete when the same comes to the notice of the person to whom it is addressed to;
• The communication of acceptance as against the proposer is complete when it is put in the course of transmission addressed to him;
• The communication of acceptance as against the acceptor or the offeree is complete when the acceptance comes to the knowledge of the offeror or proposer;
• The communication of revocation is complete as against the person who makes such revocation when it is out in the course of transmission to the person to whom it is addressed so as to be out of the power of the person making such revocation;
• The communication of revocation is complete as against the person to whom it is made when such communication comes to his knowledge.

Section 5 of the Indian Contract Act contains provisions regarding the revocation of proposals and acceptance. The Section states that the revocation of the proposal can be made at any time before the communication of acceptance is complete as against the proposer but not afterwards. While acceptance may be revoked anytime before the completion of communication of acceptance as against the acceptor but the same can not be done afterwards.

Withdrawal before the expiry of a fixed period

In a case where the offeror prescribes a certain time period to the offeree within which the offeree can accept the offer. The offeror has the authority to withdraw the offer even before the expiry of the prescribed time period. In Alfred Schonlank And Anr. vs A. Muthunayana Chetti, the defendant offered the plaintiff a proposal for sale of indigo and told the plaintiff that he can answer to his proposal within a period of eight days. However, on the fourth day from making the offer the defendant revoked the offer. The plaintiff, on the fifth day from the day when a proposal was made to him, accepted the offer. The Madras High Court held that the acceptance was of no use in the eyes of laws as it can be made clear both on principle and authority that in a case where there is no consideration for the promise to keep the offer open for a certain time period is nothing but nudum pactum or a bare promise.

When the notice of revocation reaches the offeree’s address it is deemed to be complete. In Tenax Steamship Co v Owners of the Motor Vessel Brimnes, the defendant company owned a ship called Brimnes. The defendants agreed to sell the ship Brimnes to the complainants on the condition that a charter party agreement will take place between them. The hire payment was made a period later than which was agreed between the parties under the terms of the contract. On one fine day, the complainant during the normal office hours gave the defendant a notice for the withdrawal of the ship from services through telex. However, the defendant read the letter on a later period and by that time he had already made the payment for the ships. The question before the appellate court was whether notice of withdrawal of service had effect before the defendant made the payment of hire of ships. The court held that the withdrawal was effective when the telex message was received by the defendant and not when the defendant read the message. Therefore, this case became the authority for the reasoning that in the case where the revocation is sent through instantaneous means like telex, the revocation becomes effective from the time on which the revocation could have been read and not the time when it was actually read by the person to whom it was addressed to. 

Acceptance of proposal under the voluntary retirement scheme

Under the Voluntary Retirement scheme, the employees were given the right to apply for voluntary retirement by requesting the same in writing to the authorities. However, the authorities in these cases had the complete discretion to accept or reject these requests. The requirement of the employee who requested under the scheme could take place only once the request has been accepted by the authorities in writing. The scheme was only an invitation to offer and the application made by the employee was an offer made to the authorities who were therefore offeree. The employee being the offeror could withdraw the offer anytime before the same is accepted by the offeree. The term in the scheme preventing the employee from the withdrawal of the proposal was held to be non-binding.

In Shashikala Parashar vs State Of Goa & Another, the employee first made the request for his voluntary transfer but later on, he requested that the request made by him should be suspended for some time. The Government, however, accepted the resignation. The employee aggrieved by the government’s decision moved to the court and the court held that the request made by the employee was a mere assertion without having any backing of proof or an affidavit. The order of Government was like an acceptance which was made after the revocation of the proposal was made and the request to keep the proposal in suspension was not the same as withdrawal of the proposal.

In K. Appa Rao v. M/s Tungabhadra Steel Products Ltd. & Others, the plaintiff submitted his resignation which was accepted on 31 March 2003 the resignation was accepted. However, the resignation offer was to take effect from 23 June 2003 which is after the expiry of the three months of the notice period. The question before the court was that which date should be considered as the effective date of resignation. The court held that the effective date of resignation will be the date on which the employee will be released and not the date of acceptance of the request made by the employee. Meanwhile, the employee is free to withdraw his resignation.

The employer is under no obligation to accept the proposal of premature retirement and therefore no action could lie in any court of law where the employee has refused to accept such proposal. In Visakhapatnam Port Trust & Others v/s T.S.N. Raju & Another, a large number of employees in a company filed an application for voluntary retirement. However, the company decided that it would not entertain all the application as the number of retirements that the company could afford had already been exhausted. The Court held that the employer could not be necessarily bound to accept all the application for resignation.

In New India Assurance Co. Ltd vs Raghuvir Singh Narang & Anr, the general principles of contract provided that once an employee has made an application for the resignation under the voluntary retirement scheme he could not withdraw the same at any time afterwards. The court held that the terms of the statutory scheme guaranteeing voluntary retirement would prevail over the general principles of law.

Agreement to keep the offer open for a specified period

Where the offeror proposes an offer to be open for a specified period of time and it is accompanied by a consideration. The offeror has no discretion to withdraw the offer before the completion of the specified period. In Mountford and another v.Scott, the owner of the house who was the defendant is essential that the communication of revocation should be made by the offeror himself or any agent who is duly authorized by him. This rule does not apply in England. In England, Dickinson v. Dodds is the authority on this matter, in this case, the defendant made an offer to the plaintiff for the sale of the property at a fixed price and the terms of the proposal also made it clear that the offer could be accepted by the plaintiff within a specified time period. However, before the expiration of the specified time, the plaintiff was informed by a party that the offer has already been revoked as the defendant has already sold the property to some other person. Despite knowing the fact that the property which was offered to him the plaintiff before the expiration of the offer gave a letter of acceptance of an offer to the defendant. The court, In this case, the court held that the offer can be revoked anytime before the acceptance by the offeree is made and that the sale to the third party was already in knowledge of the plaintiff and so the plaintiff already knew that the defendant was not minded to sell the property to him and therefore the acceptance by the plaintiff at a later point of time when the property had already been transferred to the other party has no value in the eyes of law.

The defendant in the present case made an offer to the plaintiff for the sale of his house for ten thousand pound and the offer was made for specified time and was backed by consideration according to which the plaintiff had the option of paying one pound to keep the offer of the defendant open for a specified time period. The court, in this case, held that after the plaintiff deposited one pound to the defendant, the defendant was not allowed to revoke the offer before the expiry of the specified period as the effect of the offer made it irrevocable for the specified time and therefore the offeree is free to accept the offer within the specified time notwithstanding the offerors purported revocation.

In State Of Haryana & Ors vs M/S Malik Traders, the bid security was accompanied with a condition that the bid security can not be forfeited by the bidders in case of withdrawal of the bid before the expiry of its validity period. However, the court rejected the conditions put by the authorities organizing the bid by holding them to be invalid and held that the withdrawal of bid before the end of the validity period even before the acceptance did not put an end to the right of the offeree to forfeit the bid security.

Communication of revocation of the offer

In India, as suggested by Pollock and Mulla, this rule has no applicability and reason behind it is the Section 6(1) of the Indian Contract Act, 1872 which mandates that the revocation could be made only by the offeror and no other person. 

Revocation of the general offer

In the case where the offer of general nature is made known to the people through any media, the withdrawal of the offer should be conveyed through the same media. The revocation so made would be effective even where any person in ignorance of the revocation subsequently performs the term of the offer which has already been withdrawn.

In Shuey v. United States, an announcement was published in the newspaper announcing reward for the person who reports certain criminals. However, this announcement was subsequently withdrawn by publishing a subsequent notification. The plaintiff in this case, after the notification was revoked reported the criminals in ignorance of the subsequent publication in the newspaper. The person reporting the crime was held not to be eligible for the reward price as the announcement was withdrawn through the same channel through which it was published.

Superseding proposal by a fresh proposal

In a case where the proposal is renewed not in entirety but in some parts before the acceptance is made to the original offer and the latter appears to supersede the earlier proposal. Then such a proposal will no longer be available for acceptance by the offeree. The acceptance could only be of the renewed part which has superseded the earlier or original proposal.

Cancellation of allotment of land

In Rochees Hotels Pvt. Ltd. And Anr. vs Jaipur Development Authority, under the order of a Development Authority, an allotment of land was made. The people to whom the allotment was made deposited the money and signed the agreement as a result of which a concluded came into effect between the allottees and the authorities who made the allotment of the land. The subsequent cancellation made by the authorities was challenged by the allottees in the court. The court held the subsequent cancellation of the allotment as improper and arbitrary. It was held that the authorities were bound by the obligation to approve building plans for the land. The pending criminal investigations regarding the allotment of land were irrelevant.

Revocation of bid

In a case where the agreement is entered into by auction. The acceptance to the agreement is signified by knocking down the hammer by the seller. A bid can be withdrawn before the hammer is knocked down by the seller. In The Rajah Of Bobbili vs Akella Suryanarayana Rao Garu, the petitioner at an auction made the highest bid. But before the hammer was knocked down he withdrew his bid on finding that the property was subject to a mortgage. But even after the retraction was made by the bidder the auctioneer knocked down the offer signifying the assent to the offer made by the plaintiff. Later on, the owner of the property sued the bidder. The court, in this case, held that the bid made by the plaintiff was nothing more than an offer and he had the discretion of withdrawing the same before his offer was accepted by the auctioneer.

The principle laid down in the above-mentioned case has been significantly extended by the High Courts in the subsequent cases which included even those cases where the bid was provisionally accepted and was subjected to further confirmation by the higher authorities.

In Union Of India & Ors vs M/S. Bhim Sen Walaiti Ram, in a public auction the highest bid was made by the plaintiff and therefore he got the liquor shop which was there for auction. The bid was subject to the consideration of the Chief Commissioner who had the duty to inquire into the financial condition of the bidder before granting him the license. According to the rules of the auction which was conducted the bidder was under the obligation to immediately pay the one-sixth price of the liquor shop immediately. If he defaults in paying the said amount, the Government had the power to can such bid and re-auction the shop. In this case, the plaintiff was unable to pay the amount which was specified and as a result of which the Chief Commissioner ordered the resale. The subsequent resale proved to be a loss for the Government since the price bidding realized in resale was much less than the original bidding. The authorities decided to make the defendant liable for making good the losses suffered by the authorities. The court, in this case, held that the defendant is not liable to make good of the losses suffered due to the resale of the shop as the Chief Commissioner had disapproved the bid made by the defendant.

In Haridwar Singh vs Bagun Sumbrui, a forest by way of the auction was given to the bidder even below its minimum price. The confirmation of the bill was still in the process while the bidder offered to pay the minimum value. The authorities who were holding the bill accepted it and by the way of telegram sent their acceptance to the forest officers for carrying on further transactions. The foreign officer due to some reasons never received the said telegram. Meanwhile, another person offered a higher price for the forest and the same was accepted by the authorities holding the auction. Later on, the authorities informed the forest officials about the acceptance. The acceptance reached the forest officer this time and he passed on the bid to the new bidder. The earlier bidder challenged the passing of bid. The court held that there was no concluded contract from the original bid since the acceptance which was made by the authorities on the earlier bill will be considered to be still present within the authorities as no communication as to their acceptance was ever made to the earlier bidder.

The auctioneer has the authority to specify the manner in which the bids can be revoked by the bidders.

In M. Lachia Setty & Sons Ltd. Etc. Etc vs The Coffee Board, Bangalore, one of the auction rules in the present case specified that any instructions or bids by means of telegraph will not be accepted. The defendant made his bid on the spot by filing the bid form. However, before the result of the bid were to announce the defendant revoked his bid by means of telegraphic communication. But the bid by the defendant was accepted by the auctioneer. The defendant later refused to perform the bid on the grounds that he had already communicated his revocation. The court, in this case, held that the express mentioning by the auctioneer of no entertainment of any telegraphic communication with respect to instruction or anything pertaining to bidding was wide enough to include within its ambit revocation as well. Therefore, the revocation made by the defendant is not a good revocation under law. 

Lapse of time

Where time is prescribed

Where in a contract, a fixed time has been prescribed to the offeree to communicate the acceptance, the offeree is bound to accept the offer within the fixed time so prescribed because after the expiry of the fixed time the offer lapses. With regard to this facet of contract law, the Calcutta High Court has suggested that in a case where the offeree has to communicate his acceptance within a specified time and he posts his acceptance within the stipulated time period, a binding contract will be held to have taken place between the parties. The validity of the offer by the offeree would not be affected if the letter of acceptance so posted within the stipulated time reaches the offeror after the completion of the specified time.

In the case of Bruner v. Moore, the offer was stipulated to last till the end of March. The offeree posted his letter to the offeror on 28th March which reached the offeree on 30th March. The court, in this case, held that the acceptance was valid.

In R. Vinoth Kumar vs The Secretary, the institution invited the applications for admission into the institution for a prescribed time by sending the same either through post or in-person to the institution. The candidate sent the application through the post before four days of the last date of the stipulated date but the same reached the institute after the stipulated time period was over. The court, in this case, held that the candidate was too late in sending the application. The rationale of the majority of the two judges in the case was that where the mode of communication can be decided by the acceptor at his free will, the agency whom the acceptor chooses acts as the agent of the sender, whereas in cases where the delivery is made through the mode which has been prescribed by the person to whom the delivery is addressed to, then the agency so prescribed by the addressee acts as agent of the addressee. In the former case, the delivery to the agency does not tantamount to delivery to the addressee. But in the latter case the delivery to the agency tantamounts to the delivery to the addressee. The dissenting judge, in this case, upheld that when the candidate selects any of the mode prescribed by the addressee, then the agency which is prescribed by the addressee would act as the agent of the addressee.

Where no time is prescribed

In the contracts where no time is specified within which the offer should be accepted it is a settled principle that the offer must be accepted within a reasonable time. In Shree Jaya Mahal Co-operative Housing Society Ltd. v. Zenith Chemical Works Pvt. Ltd. and others, the court held that the determination as to what will be considered as a reasonable time would be decided by the courts on a case to case basis keeping in view the facts and circumstances of the case. The definition of “reasonable period” is a question of facts and it depends upon the circumstances and the situation in which the agreement was entered into.

Contracts which involve precious materials like gold and other precious metals which are prone to high fluctuating price then in those cases the reasonable period would be a very short span of time. However, in contracts involving land the reasonable time period will not be the same as the time period regarded reasonable in the contracts the precious metals.

By failure to accept a condition precedent

Where the offer is subject to conditions precedent that is some preconditions have to be complied with before the acceptance is made. If the acceptance is made without fulfilment of the condition precedent then the offer lapses then and there.

In the State of West Bengal v. Mahendra Chandra Das, a salt lake was offered by way of a lease with a condition precedent which mandated that the person accepting the lease has to deposit a certain sum of money within the specified time. The defendant who was the intended lessee, in this case, did not deposit the amount of money even after the expiration of the stipulated time. The court held that the conduct of the defendant clearly indicated that the allotment stood cancelled. 

Conclusion

The Contract Act is the primary legislation in the country which deals with the contractual obligations between the parties. The Act not only contains the provisions related to entering into the contract but also the provisions related to the termination of the contract which is entered into by the parties. The parties to a contract are at the liberty of revoking both offer and acceptance at a later point of time. The procedure and the rules of revocation are laid down under Section 5 of the Contract Act. revocation is a way of termination of the offer. There are three ways of termination of an offer, the three of them are Revocation, Rejection or Lapse of the offer.

References

• https://blog.ipleaders.in/contract-postage-telephone/
• https://blog.ipleaders.in/rescission-of-a-contract/
• https://blog.ipleaders.in/contract-discharge/
• https://blog.ipleaders.in/forms-of-acceptance-to-an-offer/
• https://chestofbooks.com/business/law/Law-Of-Contracts-4-1/When-Communication-By-Mail-Or-Telegraph-Is-Proper-Theories-Continued.html

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

The post An overview to Lapse of Offer under the Indian Contract Act, 1872 appeared first on iPleaders.

This article is written by Shivangi Tiwari, a second-year student pursuing B.A. LL.B. from Hidayatullah National Law University, Raipur. This is an exhaustive article dealing with Offer of Performance.

Introduction

The term “offer” has been defined under Section 2(a) of the Indian Contract Act, 1872. An offer is an expression of willingness made by a person to do or abstain from doing any act or omission with a view to obtaining the assent of the person to whom such an offer of act or abstinence is made. 

The term performance in its literal sense means the performance of a task or action. In its legal sense “performance” means the fulfilment or the completion of the obligations which they have towards the other party by virtue of the contract entered into by them. For example, ‘A’ and ‘B’ enter into a contract, the terms of the contract state that A has to deliver a book to B on payment of the consideration of five hundred rupees. Here, B pays to A rupees five hundred and as stipulated in the contract, A delivers him the book.

Section 37 of the Contract Act talks about performance. According to the Section, there are two types of performance which are:

• Actual performance: Actual performance of the contract means the actual discharge of the liability or obligation which a person has undertaken to perform and there remains no other task which he is obliged to discharge under the promise. He is said to have made the actual performance of the promise.
• Attempted performance: At times when the performance becomes due. The promisor is not able to discharge his obligation or perform his duty because he is prevented by the promisee in doing so. This situation where the promisor actually intended to perform his obligation or discharge his duty but is prevented from doing so by an intervening disability is known as the attempted performance of a promise. 

Attempted performance is also known as Tender. A tender can be of two types:

• Tender of goods and services: The discharge of the contract to deliver goods and services is completed when the goods are tendered for acceptance in accordance with the terms of contact. If the goods and services so tendered are not accepted they are to be taken back by the offeror and he is discharged from his liability.
• Tender of money: where the debtor tenders the money which is to be paid to the creditor but the debtor refuses to accept the money. The debtor is not discharged from the lability to pay back the money. Therefore, a tender of money can never result in the discharge of debt. 

This article exhaustively deals with the tender of performance and its different aspects, the performance of a contract and joint promises and joint liabilities arising thereto.

Tender of performance

Section 37 to Section 39 specifically deals with the performance of the contract by the parties thereto. According to Section 37 of the Indian Contract Act, 1872 the parties to a contract are under the obligation to either perform or offer to perform the promises which have been agreed upon under the contract. Section 2(b) of the Indian Contract Act defines the meaning of promise as a proposal made by the offeror which has been accepted by the offeree. Thus, each party is under a legal obligation to perform his obligation which has been agreed upon under the terms of the contract. Unless the terms of contract expressly exempts or dispenses the performance of obligation upon the person. 

The promises made by the parties to the contract after their death binds their representatives provided that no contrary intention appears from the terms of the contract. For example, if there is a contract between two persons ‘A’ and ‘B’ in which A promises to deliver to B some goods on the payment of a certain amount of money by B on a particular day. However, if A dies before the completion of contract, in that case, A’s representative will be bound by the promise made by him and therefore they are under the obligation to deliver goods to B and B is also under the obligation to pay the specified amount to A’s representative.

However, in the case where the promise is made with regards to the personal skills and art of the person then his representative will not be bound by the promise made by him. For example, in the case where A promised B to make him painting on a specified day for a certain price. A dies before the performance of the contract. Neither the representatives of A are not bound by the promise made by A nor B can compel the representative for the specific performance of the promise made by A.

The obligation of parties to perform

The obligations in a contract are those duties by which the parties to the contract have to abide by. In a contract, the parties to the contract usually exchange something of value in the eyes of the law. The thing which is decided to exchange can be the product, services, money, etc. An example of contract obligations is with the sale of a product such as an automobile. One party has the obligation to transfer ownership of the car, while the other has the obligation to pay for it. The contract will specify the terms that regulate the obligations, such as the method and amount of payment, and the time or place of delivery.

In the case of M. Kamalakannnan v. M. Manikanndan, there was a contract between the plaintiff and the defendant for the sale of the property. The plaintiff, in this case, retained some part of the money which was stipulated under the terms of the contract in order to compel the defendant for the performance of some of the obligations like vacating the property which was occupied by the tenants and handing over the vacant property to the plaintiff. The contention by the defendant was that non-payment of some part of the consideration resulted in the infringement of the terms of the contract.

In Geo-Group Communications INC v. IOL Broadband Ltd, the parties to the contract signed an agreement and they fully acted the terms of the agreements so much so that there arose no further need for the documents to be executed any further. The agreement was described as one of the preliminary and tentative drafts made for the purpose of discussion and deliberation only. When the contract was challenged in the court of law, the court held that the agreement was valid and it entitles the claimant for relief. 

Submission of tender tantamounts to a proposal

When in response to an invitation a lender is submitted it is considered to be a proposal to contract and not the contract itself. In M/S Great Eastern Energy vs M/S Jain Irrigation Systems Ltd, the tender specified the validity period for four months. The court held that after the expiry of the period of tender, no acceptance could be made. The forfeiture of the security deposit amount by acceptance of the tender after the expiry of its validity period and failure of performance by the tenderer was not improper.

Promises bind the representatives of the promisor

The proviso attached to Section 37 of the Act provides that in case of the death of the promisors the representative of such promisors would be bound by the promises made by them unless a contrary intention appears from the terms of the contract. In the case of Basanti Bai vs Sri Prafulla Kumar Routrai, that in case a person dies without leaving behind any legal representative, then, in that case, the liability to perform the promise on his behalf would fall upon the person who acquires interest over the subject matters of the contract through that deceased party. The Cuttack High Court, however, held that in the present case, the plaintiff was not able to enjoy the above mentioned legal proposition as she was unable to prove the existence of the agreement which was alleged by her.

Clause for renewal

The Clause for renewal is the provision by which the terms of the contract initially agreed upon are renewed or recommenced.

In Hardesh Ores Pvt. Ltd vs M/S. Hede And Company, the terms of the contract contained a renewal clause. The party which have the authority in accordance with the terms of the contract to renew the same exercised it. However, the other party refused to accept the new terms caused by renewal. The Supreme Court held that in such a case the best course of action for the party who is empowered by the terms of the contract to renew the terms of the contract is to get the renewal declared and enforced by the court of law or to get the declaration of renewal of contract by the court.

Tender of performance

The offeror should offer the performance of an obligation under the contract to the offeree. The offer is made is called the “tender of performance”. It is the discretion of the promisee to accept the offer. In case the promisee chooses not to accept the offer then neither the offeror could be held liable for the non-performance of the terms of the contract nor he loses his rights under the terms of the contract. Therefore, it is a settled principle that non-acceptance of the tender of performance would result in the exclusion of the promisor from further performance of the terms of the contract and he is also entitled to sue the other party for not performing the terms of the contract. Section 38 of the Contract Act makes it clear that a tender of performance tantamounts to performance. Every tender of performance must fulfil a certain essential condition:

• Section 38(1): The offer should be unconditional;
• Section 38(2): The offer must be made at a proper time and place so as to allow the party to have a reasonable time for ascertaining that the person who is making the offer to him is competent to enter into a contract;
• Section 38(3): If the offer to the offeree is such as to deliver some goods addressed to the offeree then it is the duty of the offeror to provide reasonable time to the offeree in which he can ascertain that the goods offered to him is the same by which the offeror is bound under the terms of the contract.

Tender of performance should be unconditional

Subsection 1 of Section 38 states that a tender to valid must be unconditional which means that it should not be accompanied with any clause, provision or condition precedent or subsequent. In Haji Abdul Rehman Haji Mahomed, the court, in this case, explained the situations in which the tender becomes conditional. According to the court, when a tender does not follow the terms of the contract which were originally drafted and agreed upon by the parties, the tender becomes conditional. The reason for making it a necessary is because of the fact that it is not reasonable to compel a party to accept the modified or altered terms of contract which were not initially agreed upon by the parties. For example, if A offers to pay B a certain sum of money if B agrees to sell certain goods to him. It is a conditional tender and therefore it is invalid. Similarly in a case where A sent a single cheque for two items, only one of which was due at the time, while the other was payable after some time. The cheque being one and indivisible could be accepted as whole or not at all. It was held that the promisee was within his right in rejecting cheque.

The tender of performance must be made at a proper time and place

Section 38(2) of the Act mandates that the tender of performance should necessarily be made at a time and place and under such circumstances so as to afford the person to whom the offer is made a reasonable opportunity to ascertain that the offeror is able and bound to do whatever he has promised under the terms of contract to do.

In P.L.S.A.R.S., Sabapathi Chetty (Deceased) Vs. Krishna Aiyar, the court held that generally, the parties to the tender of performance fix the time and place. The tender of performance should mandatorily be made at the time and place stipulated under the contract. If the performance is made within the stipulated time and place then the promisor is under no further obligations.

In Startup v. Macdonald, the defendant purchased ten tons of linseed oil to be delivered to the plaintiff within the last fourteen days of the month of March. The plaintiff tendered the defendant at night on the fourteenth day. The defendant however citing the lateness of the tender rejected the acceptance of the tender. The court, in this case, held that the defendant should be held liable for the breach of the terms of the contract and the contention made by him that the late acceptance of the tender was made could not be entertained because, although the acceptance was made lately still the acceptance, was made before midnight.

In Afovos shipping co. v. R Pagnan, an international contract was entered into by the plaintiff and defendant. The term of the contract provided that the payment which formed the consideration of the contract should reach on the 14th day of the month, however, the defendant repudiated the contract before the 14th day of the month. The court held that the defendant should have delayed the repudiation of the contract till 14th of the month.

Section 138(2) of the Act also provides that the tender must be made under such circumstances so as to allow the other party to get reasonable opportunity to ascertain that the person who is making the tender is capable and willing to fulfil all the conditions mentioned under the contract. Section 138(3) of the Act provides that the goods which are subjected to tender must be same as mentioned under the description of the tender otherwise the tender will be invalid.

In Dixon v. Clark the court held that the fact that payment was tendered and refused in no ways discharges the debtor from his liability to make good of the payment of a debt.

In Vidya Vati vs Devi Das, the principle of old standing which was given in the above-mentioned case was endorsed. In the debtor was under the obligation of paying back his loan in order to recover the vacant possession of his premises and his tender was also rejected. However, the court held that debtor was not released from the obligation to pay prior to his recovery of the possession. 

By whom contracts must be performed

Section 40 of the Contract Act contains provisions regarding the performance of the contract. The Section provides that if by the terms of the contract it appears that the intention of the parties to the contract was such that any promise contained in it must essentially be performed by the promisor himself and no other person on his behalf can perform his promise. In all the other contracts the terms of which do not indicate any similar intention then in the absence of the promisor for the performance of the promise any other competent person can perform the promise on his behalf. For example where A promises to B a certain sum of money. The money could be paid to B by A personally or by any other authorized person authorized by A on his behalf. If in the above case A dies without authorizing the person who can make the payment on his behalf. Then his representative will be bound to make the payment on his behalf or they can appoint any other person to do so.

Effect of accepting performance by the third party

Section 41 of the Contract Act contains provisions regarding the effect of acceptance of performance of promise by the third party. The Section provides that where the promisee agrees to performance of a promise which is made to him by the offeror, by the third party. He can not at a later point of time enforce the contract against the promisor who initially promised to perform the promise.

If the terms of the contract indicate that from the very beginning of entering into the contract the parties to the contract intended specific performance of the promise by the promisor himself. The effect of reflection of such intention would be that the promise should essentially be performed by the promisor himself and the promise can not be enforced against his legal representative nor can his legal representatives can enforce the promise. This type of situation can usually be seen in cases which involve the personal skills of the promisor himself.

Generally, the rules laid down under Section 37 is that the promises of the deceased promisor will bind his representatives. Therefore, the general principle of the law of contract is that unless there appears a contrary intention in the terms of the contract. The representatives of a deceased promisor are bound by the promise of the deceased and the promises of the deceased are enforceable against his representatives.

In the case of Kapur Chand Godha vs Mir Nawab Himayatalikhan Azamjah, the court declared that the English and the Indian law differs substantially on the point of performance of the contract by the representatives of the deceased promisor, in the British law system, the rule is that the third party or the representatives of the deceased promisor could discharge his obligations only in the cases where it is clearly evident from the promise that it was the intention of the parties while the formation of the promise to bind their representatives in case any of the promisors dies, in Indian law, however, the position with respect to the performance of the promise by the representatives of the deceased on contrary to the English law and the same could be inferred from the words of Section 41 of the Indian Contract Act, which leave no ray of doubt that in cases where the appellants expressly declare the intention of the performance of their promise from the third party, they can not afterwards enforce the promise against the promisor. 

Joint promises

Section 42 of the Indian Contract Act talks about the joint promises. When two or more promisors agree to perform the terms of the promise together they are said to have made a joint promise and the people who jointly agreed to perform the promise are called the joint promisors. The section provides that the promisors are jointly liable to fulfil the promise until the terms of the contract provide anything to the contrary. The Section also provides that in case of death of any one of the joint promisors his legal representatives will be bound by the obligation under which the promisor was in his lifetime.

Performance of joint promises

According to English law, in a case where one of the several joint promisors dies. The surviving joint promisor would be bound by the rights and liabilities of the deceased joint promisors until a single joint promisor is alive the representatives of the promisor will not acquire any rights or liabilities. This rule is sometimes considered to put the creditor in the loss as he has no security of solvency of the creditors. This lacuna of the rule is filled by Section 42 of the Indian Contract Act. 

Devolution of joint liabilities

Section 42 of the Indian Contract Act deals with the devolution of joint liabilities. According to the Section in case, there are several joint promisors involved in a contract by making a promise then during the joint lives of the promisors they must fulfil the promise jointly. In case of death of any of the joint promisor, the representatives of the deceased promisor along with the surviving promisors should strive to fulfil the promise. On the death of the last surviving promisor, the representatives of all the deceased promisors would be jointly liable for fulfilment of the promise. However, this legal proposition is subject to any private arrangement between the parties to the contract.

Devolution of joint liabilities

When two or more persons enter into a joint promise then unless a contrary intention appears by the contract all promisors during their joint lives and after the death of any of them their representatives will be bound jointly along with the surviving promisor or promisors. After the death of all the promisors, the representatives of all the promisors will be bound by the promise jointly entered into by the deceased promisors.

This Section provides security to the promisee by assuring him that the promisors would be bound by the promise made by them during their joint life and after the death of either of the promisor, their representatives will be bound by the promise made by the deceased promisor. 

In Gannmani Anasuya & Ors vs Parvatini Amarendra Chowdhary, the court held that Section 42 shifts the burden of the fulfilment of the promise on the representatives of the deceased promisors. However, this liability is subject to the express or implied prescription of such provision by the promisors. Such prescription by the promisors could be inferred expressly or impliedly. 

Joint and several liability

Subsection 1 of section 43 of the Indian Contract Act contains the important facets of the joint promises. According to the Section when two or more persons jointly make a promise. The promisee has the authority to compel any of such joint promisors in the absence of the contract expressly prohibiting the promisee to do so.

Each promisor may compel contribution

Subsection 2 of Section 43 provides that each of the promisors in a joint promise may compel the other promisors to contribute equally with him in the performance of the promise unless a contrary intention appears from the terms of the contract.

Sharing of loss by default in contribution

Subsection 3 of Section 43 provides that in the case where any two or more joint promisors makes default in making a contribution in the promise, then the burden of loss must be borne by the remaining promisors and should make good the loss suffered by the other party by contributing in equal shares.

The explanation attached to the Section provides that nothing contained under Section 43 of the Indian Contract Act shall prevent the surety, from recovering the money which he has paid on behalf of the principal nor the Section empowers the principal from recovering anything from the surety on account of the surety’s payment made on behalf of the principal.

Illustrations

Below are the different illustrations provided under Section 43 of the Indian Contract Act:

• A, B and C jointly promised D to pay him 3000 rupees. D has the authority to compel either A, B or C to make payment of 3000 rupees to him.
• A, B and C jointly made a promise to D to pay him 3000 rupees. D compels C to make complete payment of 3000 rupees. Initially when A, B and C made the promise jointly each of them was liable to pay D 1000 rupees. However, in the event of the complete payment by C, C is entitled to recover from the other joint promisors, the amount which he paid to D. here in this case, A is insolvent but he is capable of making payment of half of what he was liable to pay to D therefore, A is obliged to pay 500 rupees to C whereas B would be liable to pay C, the share which was stipulated under the promise which was 1000 rupees and half of the sum which was defaulted by A that is half of 500 rupees. Therefore, B has to make payment of rupees 1250 to C.
• A, B, and C jointly promise to D to pay him 3000 rupees. A is compelled to pay the entire sum of 3000 to D. C is not in the position to pay anything to A in order to make him recover the sum which he alone has to pay to D. in this case B has to pay the amount of sum which he was under the obligation to pay to D along with that B also has to pay half of the sum which C has defaulted to pay A, that is why B has to pay to A rupees 1000 and rupees 500 which equals to rupees 1500.
• A, B, and C jointly promise to pay D rupees 3000. A and B are the sureties to C, in case of inability of C to pay D which he owed to him, A and B made the payment on his behalf. Here A and B can recover the amount paid by them on behalf of C.

Section 43 of the Indian Contract Act lays down the following three rules:

• Rule 1: When a joint promise without any express agreement to the agreement, the promisee has the discretion of specifically making only one of the joint promisors to pay the amount which was jointly promised by the promisors to pay him. A, B, and C jointly promise to pay D rupees 3000. A can compel either of the three promisors to pay him the amount stipulated in the promise.
• Rule 2: Where a specific joint promisor was compelled to pay the entire promised sum. Then he may compel the other joint promisors to pay him the amount which they were obliged to pay to the person to whom they had promised to pay the stipulated amount.
• Rule 3: Where one of the joint promisors due to his inability to make payment defaults in making a contribution to pay the stipulated amount, the remaining joint promisors must bear the cost in equal shares. For example, A, B and C promise D to pay him rupees 3000. In case C is unable to pay anything to D then the amount owed by C must be borne in equal share by A and B. in case C is able to pay half of what he is obliged to pay to D, the remaining amount must be paid by A and B in equal shares to the person whom they promised to pay the amount.

Release of one joint promisor

Section 44 of the Contract Act grants the Right to release to the creditor under which he may release either of the joint promisors from liability. The section provides that where the creditor has released either of the joint promisors from the liability. The other joint promisors are not discharged from their liabilities and they are still bound to fulfil the promise which they have made to the person. The release of the promisor from his liability towards the promisee, however, does not result in his release from the liability which he has towards the other joint promisors.

Section 44 of the Indian Contract Act marks a departure from the common law principle in which the release of one of the promisors from liability tantamounts to the release of the other promisors from their liability towards the promisee. Unless the promisee expressly provides for the preservation of rights against them.

Conclusion

The term “offer” has been defined under Section 2(a) of the Indian Contract Act, 1872. An offer is an expression of willingness made by a person to do or abstain from doing any act or omission with a view to obtaining the assent of the person whom such an offer of act or abstinence is made. 

The term performance in its literal sense means the performance of a task or action. In its legal sense performance means the fulfilment or the completion of the obligation of the parties which they have towards the other party by virtue of the contract entered into by them. For example, A and B enter into a contract the terms of the contract states that A has to deliver a book to B on payment of the consideration of five hundred rupees. Here, B pays to A rupees five hundred and as stipulated in the contract, A in return delivers him the book. Section 37 of the Contract Act talks about performance.

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

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This article is written by Tanya Gupta, a 2nd-year law student, from BVP-New Law College, Pune. In this article, the author has discussed the concept of “False evidence and offences against crime”.

Introduction 

Evidence is every type of proof legally presented at trial (allowed by the judge) which is intended to convince the judge and/or jury of alleged material facts of the case. Evidence is any statement required or permitted by the court on oath and any document which is produced by the court’s instruction. As per Section 3 of the Indian Evidence Act, the evidence is of two types;

1. Oral 
2. Documentary Evidence

A statement or documentary evidence presented to the court when known to be false or is believed not to be true is false evidence. Criminal evidence is any physical or verbal evidence that is presented for the purpose to prove a crime.

False Evidence 

Section 191 of the Indian Penal Code explains that giving false evidence means a person bound by oath or express provision of law, to tell the truth, makes a false statement or a statement that he doesn’t believe to be true or believes to be false. False statement or evidence given by a person can be in written form or otherwise (oral or indicative). Section 191 is also known as Perjury under English Perjury Act 1911. For example, a matter concerning the handwriting of Z for which Z’s son is called to test the handwriting that whether it is of his father or not. Even after knowing it is not the handwriting of Z he states the opposite in court stating that it is the handwriting of Z. It is a typical offence called perjury. Taking up the same scenario of Z’s handwriting, where his son is called to testify his handwriting but this time his son is not confident and states that although I am not confident that it was not the handwriting of Z; in this situation, his son cannot be held liable under Section 193 of Indian Penal Code because his intention is not to lie. A copy of the sales deed shown in the court which is edited or fabricated is known as false evidence. Perjury is all about giving false evidence. Lets us take a classic example in which X is bound under oath that he will speak only the truth in respect to a case in which Y is suspect for the charge of murder that took place in Delhi. Now X says that Y was with me in Shimla on 20th May 2019( the date when the murder was committed). But X lies and gives false evidence. It is a clear example of perjury.

Essential Ingredients of False Evidence

False evidence made by a person who is:

1. Bound by oath, or 
2. By an express provision of law, or 
3. A declaration which a person is bound by law to make on any subject, and 
4. Which statement or declaration is false and which he either knows or believes to be false or does not believe to be true.

Three essential prerequisite condition for the application of Section 191:

1. A legal obligation to state the truth,
2. Making of a false statement or declaration, and 
3. Belief in its falsity. 

Differences vis-a-vis the English Law of Perjury

Perjury has been kept at the position of criminal form under English Law of Perjury because a person is at the guilt by the statutory obligation of crime if lawfully sworn as a witness or as an interpreter in a judicial proceeding where he lawfully makes a statement material in that proceeding which is known to be false or does not believe it to be true. 

The violation of oath is a condition prerequisite. Under Indian law, a statement contrary to oath /declaration requires an express provision to state the truth.

Under the English Law, the false statement is a statement or a declaration falsely made only in a judicial proceeding whereas, under Indian law false evidence is a statement when given to a public servant would also be classified as Perjury. 

Legally Bound by Oath or Law to Say the truth 

1. A Person is legally bound by oath if;

a) A Person should be bound by oath- Section 8 of the Oath act defines it that it is a duty to state the truth.

b) By an express provision of law to state the truth.

c) Or bound by law to make a declaration.

2) Legal obligation to speak the truth in view of the oath administered.

3) Express Provision of law which binds him to speak the truth.

4) Irregularity in the administration of the oath- There is some irregularity in administration on oath by officers i.e oath is not signed properly or there is some procedural irregularity. Now if there is any irregularity will Section 191 be applicable or not? It is immaterial. The person who takes the oath knows that he is lying will be punished under section 191 of the Indian Penal Code.

5) No application to advocates.

Fabricating False Evidence

Section 192 of the Indian Penal Code defines fabricating false evidence. Whoever causes any circumstances to exist or makes any false entry in any book or record or electronic record or makes any document or electronic record containing a false statement, intending that such circumstances, false entry or false statement may appear in evidence in a judicial proceeding, or in a proceeding taken by law before a public servant as such or before an arbitrator and that such circumstance, false entry or false statement, so appearing in evidence, may cause any person who in such proceeding to form is to form an opinion upon an evidence, to entertain an erroneous proceeding touching any point material to the result of such proceeding is said to fabricate false evidence.

Essentials of fabricating false evidence

1. Cause any circumstances to exist; or 
2. Makes any false entry in any book or record etc containing a false statement ;
3. Intending that such circumstances, false entry or false statement may appear in evidence in a:

a) Judicial proceeding, or 

b) In a proceeding taken by law before a public servant,

c) Before an arbitrator; and 

 4) Helps form an opinion upon the evidence, to entertain an erroneous opinion; 

 5) Touching any point material to the result of such proceeding. 

These essentials can be easily understood by a given example. There is a shopkeeper ‘X’ whose shop is in Lucknow and he pretends that his shop was open on 20th May 2019 although his shop was closed. He shows in his book entry that his shop was open. However, on that day ‘X’ went to Delhi and committed the crime of extortion. When Police investigates about it he shows his book entry as evidence. This would qualify as fabricating false evidence. 

An intention that Fabricated Evidence May Appear as evidence in a judicial proceeding

Intention plays a very vital role in Section 192. False document so made should appear in evidence in a judicial proceeding or before a public servant or arbitrator. 

Punishment for False Evidence 

The person who gives false evidence in the court can get imprisonment up to 7 years and also fine, whereas outside the court where the person has given false evidence can get imprisonment up to 3 years and fine. Giving false evidence is a non-cognizable offence i.e police cannot arrest the person who gives false evidence without an arrest warrant. It is a type of bailable offence i.e a person can get bail from the court. He can claim bail as a matter of right. It is non-compoundable means the person who has given false evidence against a person cannot compromise with him and the case can’t be closed and Section 194 to 195A of Indian Penal Code deals with the aggravated form of offences. Aggravate form means serious form. For example, Under Section 302 of Indian Penal Code someone is charged for murder and the person is giving false evidence due to which accused is convicted to a death sentence so this is a form of aggravated form of offence. There are different forms of punishment under Section 194 as:

1) When someone is convicted.

2) When someone is convicted and executed.

Section 195: giving or fabricating false evidence with an intention/knowledge for an offence punishable with imprisonment for seven years or more or life imprisonment. He will be punished as a person convicted of that offence would be liable to be punished. For example, Person X who is accused of dacoity and a person A gives false evidence due to which X is convicted of dacoity. The punishment of dacoity is life imprisonment or rigorous imprisonment of ten years and now if it has been proved that A has given false evidence or fabricated false evidence so he (accused of Section 195) would also get the same punishment that a person who is convicted of dacoity.

Section 195A of Indian Penal Code is added by Amendment Act, 2006. The act must amount to threatening another with an injury to his person, reputation or property or to the person or reputation of anyone in whom that person is interested (eg. family, friends). The intention of the accused person should be to give false evidence. Punishment is imprisonment of either description for a term which may extend to seven years, or with fine, or with both. 

In the case of Santokh Singh vs Izhar Hussain, it was held that test identification of parade is mainly used in rape cases to identify the accused by the victim and if the victim had lied and given a false statement that he was the accused then it is an offence under Section 192 and Section 195. 

Offences Punishable in the Same Way as Giving or Fabricating False Evidence 

Using False Evidence 

A person when uses evidence which he knows it to be false comes under Section 196. Whoever corruptly uses or attempts to use as true or genuine evidence any evidence which he knows to be fabricated or false evidence.

Meaning of ‘Corruptly’ 

The intention which does not fall in dishonestly or fraudulently but against the spirit of criminal law then it comes under the category of corruptly.

Dr S Dutt Vs State of UP

There was a doctor S Dutta who specialized in the field of medicine and he was called for an expert witness where he was asked to furnish the certificate as he was an expert. Now he had furnished certificate but after some time in enquiry, it was found that it was false. Now the court enquires under which section the accused must be charged. Section 465 talks about dishonesty and Section 471 talks about fraudulently but the conduct of Dr Dutta did not come under dishonestly or fraudulently. Supreme Court held that the conduct of Dr Dutta should be covered under Section 196 under a phrase corruptly. Corruptly is a term (long) which is different from fraudulently and intention.

False Certificate 

Section 197 deals with issuing or signing the false certificates and signing that certificate issued or signed must be one which is required by law. Required by law means through any statutory obligation. The essence of this requirement should be any statute to give a certificate and that certificate which is issued or signed in spite of knowledge of falsity. Medical certificate does not come under the ambit of Section 197. It must be one which is admissible as evidence. The certificate must be false in any material point and knowledge of falsity by the accused should be there.

Using of False Certificate 

Introduction: Section 198 states using a true certificate which is known to be false. Ingredients of section 197 must be fulfilled. A Person who corruptly uses or attempts to use any such certificate as a true certificate, knowing the same to be false in a material point. Section 197 is about to issue or signed the false certificate whereas section 198 is to use the certificate as a true certificate which is false. 

False Declaration 

Section 199 states about a false statement made in declaration which is receivable by law as evidence. A person who gives the statement or declaration should be false. A document making the declaration should be received as evidenced by a court of justice or public servant or other person authorised by law. The intention behind giving a false declaration is that the accused was aware of falsity or he has knowledge that the statement is false. The declaration is not limited to oath/ affirmation.

Dy.GM, ISBT Vs Sudarshan Kumari 

An oath was taken in this case which was taken on the name of a notary which does not exist so it was said that it was a clear violation of Section 199 of Indian Penal Code.

Use of False Declaration

A Declaration or statement which a person gives in front of the court is false or believes not to be true is punished Section 200. A person who corruptly uses or attempts to use as true any such declaration, knowing the same to be false in any material point, shall be punished in the same manner as if he gave false evidence. 

Offences Against Public Justice

Section 201 to 229A explains offences against public justice which is described further.

Causing the Disappearance of Evidence

There are two categories: 

1. Causing disappearance 
2. False information

There both intentions are to screen the offender. Suppose there are two friends A and B. A has committed the murder of X and to hide the body of X and to protect A from the charges B helps him so it falls under Section 201 because of causing the disappearance of evidence. B has the intention to screen the offender.

Section 201 deals with two aspects: 

1. Causing disappearance of evidence.
2. Giving false information about the offence.

Ingredients of Section 201

1. The offence must have committed.
2. Accused must cause the disappearance of the evidence with respect to the offence committed.
3. Gives false information about the offence( accused knowns this to be false).
4. Intention- to screening the offender from legal punishment.

Commission of Offence

Commission of offence is sine non qua that is it is an essential condition or a thing which is necessary.

Palvinder Kaur vs the State of Punjab– In this case, the wife committed the murder of the husband with her boyfriend due to her extramarital affair with him. So the wife and her boyfriend have put husband’s body in the trolley and throw it into the well. After one month when his body was found in post mortem only Potassium cyanide is found and nothing else. They both are charged under Section 302 and 201. But there was no evidence which can prove the prosecution that the murder is done by wife with the help of his boyfriend. So the outcome was that as the principal offence under Section 302 was unable to establish due to which consequently under Section 201 was not establish either because the commission of an offence is sine non qua( essential condition). 

Giving False Information

Kodali Puran Chandra Rao vs Public Prosecutor, Andhra Pradesh There was a river in a village in which floating dead body of a woman was found and 2 km away from that river there was a lake in which another body was found. The Investigation officer whose duty was there made a story that two prostitutes came in the village and they both were raped due to which they committed suicide and without post mortem, he had made the report of the case and made criminate both of them. When he has to report to higher authorities he had made false information and when the matter is referred to the Supreme Court, it was held that although there is no definite evidence on investigating authorities it can be said that they have given false information and a prima facie is established based on the facts and therefore the police officer is held guilty under Section 201 for giving false information. 

Omission to Give Information 

Section 202 states that Intentional omission to give information of offence by a person bound to inform. For example, a police officer is going for his duty from his home to the police station. On his way, he saw that there was a crowd and they all were beating a person. When he inquired he comes to know that the person has stolen something from a shop so that’s why they all were beating but he did not take any action and went away so he would be charged under section 202 because it was his responsibility, legal duty, statutory obligation under Criminal Procedural code, to report any cognizable offence when it comes under his knowledge and he should take any action. 

Ingredients of Omission to give information

1) There should be knowledge or reasons to believe that an offence has been committed.

2) The person should intentionally omit to give any information regarding that offence. 

3) The person is legally bound to give still he omits to give information.

4) He shall be punished with imprisonment of either description for a term which may extend to six months or with fine or with both.

Intentional Omission to Give Information 

There are many times Bonafide mistakes are done that are with utmost good faith. So at that time, the intentional omission is avoided if they are committed with a bonafide mistake.

Harishchandra Singh Sajjan Singh Rathod Vs State of Gujarat

It was a case related to Judicial torture in which a police officer has kept a person in judicial custody and had given torture due to which he has got many injuries so police office has sent him to a nearby hospital but till the time the person could reach the hospital. He died and the case was charged under 304(2) i.e culpable homicide not amounting to murder but Supreme Court held that culpable homicide is not applicable because of two reasons first is a commission of offence has not been established and a second the legal duty to report the offence and intentional omission were not there. 

Legal Obligation to Give Information 

There should be a legal obligation to give information then only Section 202 will be a trigger. Until and unless there is no legal obligation to give information a person cannot fall under Section 202.

Giving False Information About an Offence 

Section 203 is giving false information respected an offence committed that is: 

1) Whoever knowing or having reason to believe that an offence has been committed. 

2) Gives any information respecting that offence.

3) Which he knows or believes to be false.

4) Shall be punished with imprisonment of either description for a term which may extend to two years or with fine or with both.

For example, A person ‘X’ has made complain in a police station that in his house 10 lakh of jewellery, TV and any other movable property had been stolen although TV and other property were stolen he had given false information related to 10 lakh jewellery. He will be charged under Section 203.

Ingredients of Section 203 

1) The offence has been committed.

2) Accused know or he had reason to believe that such an offence has been committed.

3) He gave the information to that offence.

4) The information so given was false and 

5) When he gave such information he knew or believed it to be false.

The offence under Section 203 is non-cognizable, but warrant may issue in the first instance. It is bailable but not compoundable and triable by any Magistrate. Sections 201, 202 and 203 are related but different. All these three sections deal with various aspects of offences dealing with the conduct of a person after the commission of the offence.

Impersonation Abuse of Process of Court of Justice 

It is related to the procedural aspect of a criminal proceeding. Section 206 to 210 deals with limited things only. For example, your home in Delhi and the court had given orders to seize the property so to save your home you have agreed with a third party X and sell it to X with the intention that court cannot seize your home and you can say that it is not your property and it belongs to X, then the person will be liable under Section 206.

Now if in the same example X had taken Dhruv’s property so that he can save his property from fortified seizure and he can return his property after some time then X will be charged under Section 207 and Dhruv will be charged under Section 206.

Section 208: Fraudulently suffering decree for sum not due. Suppose there is the movable property of 10 lakh that is car and anubhav had taken a loan from a bank to buy a car and now he is unable to pay EMI of the car and therefore the company had sent notice to him that either he pays EMI to them or his car would be seized. but anubhav had refused to pay so the company had taken notice from the court of justice. Now anubhav said to her friend Simran to file a case against him of Rs 11 lakh and anubhav fraudulently lost the case and asked that Simran can take her car and she took it so that it can be saved from the company and after sometime when the case would be closed he will take his car and give some money to her, therefore, anubhav will be charged under section 208.

Section 210 Fraudulently obtaining a decree for a sum not due. In the above example, Simran will be charged under section 210.

Section 209 Dishonesty making a false claim in court. Whoever making fraudulently or dishonestly a false claim in court to injure or annoy a person. The punishment is imprisonment of two years and shall also be liable to fine. 

Conclusion

False evidence is information given by a person to divert the verdict in a court case. False evidence is also known as forged, fabricated, tainted evidence. The intention to give false evidence is to procure the conviction and to make the innocent guilty. Section 191 explains about giving false evidence and section 192 explains about fabricating false evidence. Chapter 11 of the Indian Penal Code has set out the provision relating to giving and fabricating false evidence and offences against public justice. 

References

Indian Penal Code, 1860

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This article is written by M.S.Sri Sai Kamalini, a fourth-year student currently pursuing B.A.LLB (Hons) from School of law, SASTRA. This is an exhaustive article which deals with the various features of a fair trial.

Introduction

“Lex uno ore omnes alloquitur” which means that everyone is equal before the eyes of the law which is an important principle which forms the basis of judicial proceedings across the world. The law treats everyone equally and this principle is enshrined in various provisions of the Indian Constitution. Article 14 of the Indian Constitution exclusively deals with the Right to Equality. Trials are an indispensable part of any proceeding. Conducting fair trails is an important aspect of the law which ensures equality.

Concept of a fair trial

The concept of a fair trial is not just a right provided in our country but it is also guaranteed by various other legislations all over the world. Article 6 of the European Convention on Human Rights deals with the Right to a fair trial. According to this Article, everyone is entitled to a fair and public hearing within a reasonable time. The trial must be conducted by an independent and impartial tribunal established by law. The African Charter of Human Rights protects the dignity of humans and prevents exploitation under Article 5. Article 6 of the African Charter of Human Rights guarantees individual liberty and security to a person. The right to a fair trial is guaranteed under Article 7 which includes various rights like:

• Right to appeal to the competent jurisdiction.
• Right to defence.
• Right to be tried.
• Right to be presumed innocent until proven otherwise.

Article 14 of the International Convention on Civil and Political Rights (ICCPR) guarantees the right to a fair trial and Article 16 provides a right to recognition everywhere as a person before the law. Article 10 of the Universal Declaration of Human Rights (UDHR), which guarantees the right to a fair trial. The provisions related to a fair trial in the International Convention on Civil and Political Rights (ICCPR) is more exhaustive and detailed than the provisions in the Universal Declaration of Human Rights (UDHR).

Adversary system

The Court proceedings in the countries which follow common law are adversarial in nature. The right to equality is protected in this system as both parties have an equal voice of representation. In this system, the counsels of both the parties defend their parties and establish the facts which are supporting them. The Judge decides on the behalf of the facts mentioned, whereas in the inquisitorial system the involvement of judges are more. The court is actively involved in collecting evidence. In the inquisitorial system, the judges themselves might conduct the investigation and in certain scenarios, sometimes it can be biased. The inquisitorial system is mostly used in the civil legal systems like France and Italy.

Trials

Trials are an inevitable aspect to bring out justice. Trials have to be conducted properly following all the procedures and steps so that it would be fair and free from influences. There is no proper definition of the term trial in the Code of Criminal Procedure,1973. Trials are an examination of offence by the judicial bodies which have jurisdiction over it. Section 225 of the Code of Criminal Procedure,1973 mandates that in every trial before the Court of Session, the Public Prosecutor will conduct the prosecution. Section 304 of the Code of Criminal Procedure,1973 deals provides that it is the duty of the State to provide legal assistance to an accused if the Court feels that the accused has no sufficient means to appoint a pleader for his defence. The Court itself will appoint a pleader in that case at the expense of the State. This provision ensures that the trial is not biased as there is equal representation from both sides. The High Court with the previous approval of the State Government makes rules under various aspects for:

• The mode of selecting pleaders for defence;
• The facilities to be allowed to such pleaders by the Courts;
• The fee which is payable to such pleaders by the Government.

Presumption of Innocence

Presumption of innocence is an important factor to conduct a fair trial as it prevents wrongful convictions. This presumption of innocence is based on the Blackstone’s ratio, which is the idea that “It is better that ten guilty persons escape than that one innocent suffer”. This concept of presumption of innocence is also derived from the Latin term ‘Ei incumbit probatio qui dicit, non qui negat’, which basically means the burden of proof is on the one who declares, not on the one who denies. It is the duty of the prosecution to prove that the accused is guilty with proper evidence beyond any reasonable doubts.

Article 14(2) of the International Convention on Civil and Political Rights also provides that everyone who is accused is presumed to be innocent as long as it is proved otherwise. Article 11 of the Universal Declaration of Human Rights, also deals with the presumption of innocence.

The same principle is also enshrined under Article 6(2) of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

This principle is also followed in various cases decided by the Indian Courts, in the case of Dataram Singh v State of Uttar Pradesh, it was held that the individual freedom cannot be cut off for an infinite period as long as the person is proved guilty. This freedom can only be affected when the guilt is proved. There are certain provisions in the Indian Evidence Act like Section 111A which acts as an exception for this presumption of innocence. According to this Section, if a person has tampered the peace and security in certain places, or if they commit any offences under Section 121, Section 121 A, Section 122 and Section 123 of the Indian Penal Code, then they are not presumed to be innocent. Section 121 of the Indian Penal Code deals with the offence of waging war or planning to war against the Government of India. Section 121A of the Indian Penal Code punishes the person who conspires to commit the offence of war against the Government. Section 122 deals with the offence of collecting arms with an intention to wage war against the Government. Section 123 deals with the offence of concealing certain facts which would facilitate the waging of war. There is also an exception to the presumption of innocence in offences like dowry death. 

Independent, Impartial and Competent Judges

The independence of the judiciary is an indispensable aspect of every fair trial. The separation of powers protects the independence of the judiciary. The competency of judges is an important factor that will decide the fate of the judiciary. If the judges appointed are incompetent then the whole process of trial is damaged. Article 217 of the Indian Constitution deals with the appointment of the Judges of the High Court. According to this article, there are various qualifications that have to be followed while appointing the Judges like,

• The Judges of the High Court are appointed by the President after consultation with the Chief Justice of India.
• The person appointed has to be a Citizen of India.
• The person must have held a judicial office for at least ten years in India.
• The person has to be an advocate of a High Court or of two or more such Courts in succession for at least ten years.

There were recommendations to form the National Judicial Appointments Commission under the 99th amendment by bringing in a new Article 124A and the main functions of the commission would be,

• To recommend persons for an appointment for the post of Chief Justice of India and Judges of various courts in India.
• To ensure that the person recommended has all the eligibility and integrity.
• To recommend persons for transfer from one Court to another Court.

The Supreme Court struck down the amendment and held it to be unconstitutional and thus the old collegium system of appointing the Judges was retained. The Supreme Court later brought in new developments to bring transparency in the collegium system like the Central Government will not prepare a draft memorandum for judicial appointment.

Venue of Trial

The venue of the trial also plays an important role in ensuring the fairness of the trial. The Court has to be competent to deal with the cases. Section 177 of the Code of Criminal Procedure,1973 provides that the ordinary place of enquiry or trial would be the Court within whose local jurisdiction it was committed. Section 178 of the Code of Criminal Procedure,1973 deals with the place of trial. According to this Section, the jurisdiction can be changed in certain situations like when it is uncertain in which of several local areas an offence is completed or when an offence is committed partly in one place and partly in another place and when an offence is a continuing one. According to Section 181 of the Code of Criminal Procedure, 1973 sometimes the place of a trial depends on certain types of offences, for example, offences like kidnapping or abduction can be tried by the Court where the person was kidnapped or abducted.

Right of the Accused to Know the Accusation

Article 22 of the Indian Constitution provides that no person can be detained in custody without giving proper information. The Sixth Amendment of the Constitution of the United States also provides this right of the accused to know the accusation. The accused should be aware of the reason why he is being detained. Section 50 of the Code of Criminal Procedure also provides that it is the right of every accused to be informed about the various grounds of arrest. The police officer has to inform the person of the various reasons for arrest if the arrest is done without a warrant.

Accused Person to be tried in his Presence

It is necessary for the accused to be tried in his presence, however, there are certain situations where the magistrate can dispense the attendance after considering relevant factors. Section 317 of the Code of Criminal Procedure,1973 grants the Magistrate this power. The Magistrate can only dispense the attendance only if it does not affect the process of the trial in any manner. This principle is also supported by Article 14 of the Indian Constitution which guarantees equality.

Evidence to be taken in the Presence of Accused

Section 273 of the Code of Criminal Procedure,1973 provides that the evidence should be taken in the presence of the accused. This provision should not be followed only in rare situations like cases relating to the rape of a minor woman. Section 299 of the Code of Criminal Procedure,1973 provides the conditions to record evidence in the absence of the accused.

Right of accused person to cross-examine prosecution witnesses and to produce evidence in defence

The accused person has the right to cross-examine any number of witnesses so that it would ensure the fairness of the trial. In the case of  Mohd. Hussain Julfikar Ali v. The State (Govt. of NCT) Delhi, the appellant was not provided with an opportunity to cross-examine the fifty-six witnesses. Only one witness was cross-examined to complete the formality. Hence the appellant’s conviction and sentence was set aside for the same reasons.

Right of the Accused Person to have an Expeditious Trial

The concept of speedy trial increases the public confidence in the judiciary. The concept of speedy trial is enshrined in Article 21 of the Indian Constitution. In the case of Babu Singh v State of Uttar Pradesh, it was said that the speedy trial is also part of the fair trial. In the case of Kartar Singh v State of Punjab, it was declared that the speedy trial is a part of the right to life and personal liberty. The same principle is also enforced in various other cases like Husainera Khatoon and others v. Home Secretary, State of Bihar. The undue delay must be avoided and it must be also ensured that all the proceedings of the trial are followed properly.

The doctrine of “Autrefois Convict” and “Autrefois Acquit”

The principle autrefois convict means ‘formerly convicted’ and the principle autrefois acquit means ‘formerly acquitted’.The same principle is also accepted by the various Australian courts by the name “issue-estoppel”.Autrefois convict is a defence plea that is followed and accepted by the common law countries. This plea ensures that no person is convicted twice for the same offence. This plea will stop the entire proceeding. The concept of double jeopardy is also prevented by our Indian Constitution. Section 300 of the Code of Criminal Procedure,1973 provides that the person once convicted or acquitted not to be tried for the same offence. There are certain exceptions to the above-mentioned rule in subsection (2) and (4) of Section 300 of the Code of Criminal Procedure,1973. According to this section the person acquitted or convicted can be tried again if the prior trial was not done by a competent court. The person acquitted or convicted can be tried again with the consent of the State Government for any different offence for which a separate charge has been made against the accused in the formal trial.

Conclusion

The Right to get a fair trial is an essential right of every accused. The concept of fair trial brings confidence in the public and the people start to believe in the judiciary. It is necessary to follow every above-mentioned aspect in order to ensure that the trial is free from biases. These rights are not just domestic rights but also the various international conventions guarantee these rights. Thus the concept of a fair trial is an essential aspect of every proceeding.

References

• https://blog.ipleaders.in/trial-before-a-cour-of-session/
• http://devgan.in/crpc/index.php?q=300&a=2
• https://www.echr.coe.int/Documents/Convention_ENG.pdf

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

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This article is written by M.S.Sri Sai Kamalini, a fourth-year student currently pursuing B.A.LLB (Hons) from School of law, SASTRA. This is an exhaustive article which deals with the various provisions relating to punishment for committing murder.

Introduction

Murder is one of the heinous crime which shocks the entire human race. It affects the various aspects of society irrespective of gender. Murder is considered as “malum in se” that is the act that is evil within itself. According to the statistics, 371 people were known to be under death sentence at the end of the year 2018.

Scope of Section 302

Section 302 of the Indian Penal Code provides the punishment for murder. According to this Section whoever commits murder is punished with:

• Death;
• Life imprisonment;
• The convict shall also be liable to fine.

Section 300 of the Indian Penal Code defines murder. According to this section, culpable homicide is considered murder:

• If the act is done with an intention to cause death.
• If it is done with the intention of causing bodily injury which the offender has the knowledge that it would cause death.
• If it is done with the intention of causing bodily injury to any person and the bodily injury intended to be in­flicted is sufficient in the ordinary course of nature to cause death.
• If the person committing the act has that knowledge that it is very dangerous and it might cause death or bodily injury but still commits the act that would amount to murder.

Section 300 also provides exceptions to situations where the culpable homicide is not considered as the murder in certain situations like:

• When the act is done due to grave and sudden provocation, causes the death of another person who gave the provocation;
• When the act is done by the public servant who is authorized to do the act in order to promote public justice;
• When the act is done for defending himself from further harm(right to private defence);
• When the act is done with the consent of the victim;
• When the act is a result of a sudden fight.

 If the action does not come within the exception provided under Section 300, then it would be punished according to Section 302. 

Life Imprisonment Rule, Death Sentence an Exception

This celebrated rule was brought after Bachar Singh’s case. In this case, it was mandated that the death sentence can only be awarded for the rarest of rare cases. This principle was again considered in the case of Raju Jagdish Paswan v. The State of Maharashtra. In this case, the appellant was awarded death sentence by the trial court for committing rape of nine-year old kid. The High Court also awarded the same sentence and on appeal, the Supreme Court reduced the punishment since the death sentence can be awarded only on the rarest scenarios. The Supreme Court held that life Imprisonment is a rule whereas the death sentence is an exception. The Supreme Court did not award the death penalty in this case for various reasons such as: 

• The murder was not pre-planned.
• The person was not a continuous threat to society.
• There was no evidence by the State to prove that the person cannot be reformed and 
• rehabilitated.
• The appellant was very young and was only 22 years old while committing the crime.

The basic principle is that human life is very valuable and the death sentence has to be awarded only when it is mandatory and there is no other choice of punishment and also in cases where the range of crime committed is very heinous.

Choice of Sentence

The Court considers various factors before deciding the choice of sentences. The Court chooses the mode of punishment like the death penalty or life imprisonment only after proper investigation and after the crime is proved beyond any reasonable doubts. There are no separate sentencing guidelines in India and the need for the guidelines is mentioned in various cases. In the case of State of Punjab v. Prem Sagar & Ors, it was noted that there is no judiciary driven guidelines for awarding sentences. In the State of Madhya Pradesh v. Bablu Natt, it was said that the choice of sentences depends on the facts and circumstances of the case.

Death Sentence: Legislative Mandate 

The first case which questioned the constitutional validity of the death penalty in the case of Jagmohan Singh v State of Uttar Pradesh where the death penalty was challenged for various reasons like:

• The death penalty is violative of right to life guaranteed under Article 21.
• It affects the right to equality guaranteed under Article 14 since awarding the death penalty is in the complete discretion of the Judges.
• It also affects the various freedoms guaranteed under Article 19.
• It was also opposed as the law does not provide any mandate to award death sentences.

In the case of Rajendra Prasad v. State of Uttar Pradesh, it was discussed what are the special situations to be considered before awarding the death penalty. The Court held that we should not just consider the nature of the crime but also importance must be given to various factors of criminals in order to award the death penalty. The case of Bachan Singh v State of Punjab, questioned the constitutional validity of Section 302 as it was violative of Article 19. The Court held that it is not violative of Article 19 as there is no freedom to commit murder. In the Bachan Singh case, the court introduced the “rarest of the rare” guidelines. The court quoted that “the expression ‘special reasons‘ in the context of this provision, obviously means ’exceptional reasons‘ founded on the exceptionally grave circumstances of the particular case relating to the crime as well as the criminal”.

Awarding Death Sentence: General Guidelines and Principles provided by the law commission reports

The death sentences are usually awarded to the capital offenses. There are various capital offenses mentioned under the Indian Penal Code, under various sections like:

The death sentence if awarded should be executed properly after following various procedures mentioned in the Code of Criminal Procedure and the prison manuals. The Court will consider various factors to decide the sentence like:

• Chance of reformation;
• Age of accused;
• The mental unsoundness of the accused;
• The chance of threat to society in the future because of the accused;
• The provocation of another person due to which the accused committed the crime;
• Coercion of another person due to which the accused committed the crime.

Delay in Execution of Death Sentence—An Extenuating Factor

The delay in the execution of death sentence poses a lot of issues in various aspects as it affects the entire process of justice as it affects both the accused and the victim. The Supreme Court in the case of Triveniben v. the State of Gujarat held that only executive delay can be considered violative of Article 21 of the Indian constitution but the judicial delay cannot be considered as violative of Article 21. In the case of T.V Vatheeswaran v. State of Tamil Nadu, the Court held that a delay in the execution of the sentence that exceeded two years would be a violation of procedure guaranteed by Article 21.

However, in the case of Sher Singh v State of Punjab, it was held that the delay can be a ground for invoking Article 21, but there is no binding rule that delay would entitle a prisoner to quash the sentence of death. In the case of Shatrughan Chauhan v Union of India, it was held that various guidelines should be brought out to save the interest of the death row convicts. If there is an inordinate delay in execution, the condemned prisoner is entitled to approach the court requesting to examine whether it is just and fair to allow the sentence of death to be executed.

Conviction of a Pregnant Woman 

Section 416 of the Code of Criminal Procedure, 1973 deals with the postponement of the capital sentences on the pregnant woman. According to this Section, if a woman convicted is found to be pregnant, the High Court can:

• Postpone the execution of the sentence;
• The High Court can also reduce the sentence to imprisonment for life.

The rights of the unborn child are protected under this Section. The main logic behind this Section is that the child who did not make any mistake shouldn’t be killed. The pregnancy should be proved with proper medical reports and examinations.

Conviction of a Minor

The children are the future of every nation, so it has to be carefully evaluated before providing them major punishments like the death penalty and life imprisonment for heinous crimes. The conviction should be based on the principles of law of evidence. Justice Lokur, who is the head of the chairman of the Supreme Court Juvenile Justice Committee, stated that “Every as said that juvenile convicts cannot be handed down capital punishment in every case pertaining to heinous crimes such as rape and murder. He stated that every person who is of around 17 years or close to 18 years cannot be awarded the death penalty just because they committed a heinous crime, a proper conclusion must be achieved after going through all the evidence which are related to the case”.

According to the Juvenile Justice (Care and Protection of Children) Act 2000, the individuals who were under the age of 18 at the time of the crime cannot be executed. The Juvenile Justice Act of 2015 replaced the act that was in 2000. The act which was amended allows the persons of the age group from 16 years to 18 years can be tried as adults if they commit any heinous crimes like rape and murder. The main reason for passing the bill was the Delhi rape case, where one of the accused was 17 years old when committing the offence. He was tried separately by the juvenile court and was awarded only three years of imprisonment. This raised a lot of controversies and mandated there should be an amendment in the age of the juveniles who are committing heinous crimes.

Sentence to Co-accused

The persons who are accused of the same crime will be awarded the same amount of punishment. The confession of the co-accused is provided under Section 30 in the Indian Evidence Act. The confession made by the co-accused has a proper evidentiary value and it affects himself and also the other accused. The parity principle ensures that a sentence should be similar to the same offenders or persons convicted of the same crime. This principle ensures fairness and equality while awarding the sentences.

Imprisonment for Life

There are three types of imprisonment namely solitary, rigorous and simple imprisonment. The imprisonment for life means the person is imprisoned for his lifetime. Section 53 of the Indian Penal Code provides that there can be certain types of punishments where imprisonment for life is also an accepted form of punishment. The term transportation for life was replaced with the term imprisonment for life in the year 1955. According to Section 302, imprisonment for life is also a punishment for committing murder. The imprisonment for life is not a violent punishment like the death penalty but it still affects the accused and the society. 

Section 55 of the Indian Penal Code deals with the commutation of sentences in cases of imprisonment for life. According to this Section, it is mentioned that the term of imprisonment must not less than fourteen years or it can be any other term that has to be decided by the appropriate government. There is a misconceived idea that imprisonment for life is only for fourteen years but it is not true in every case. There are certain special situations where the convict is released after fourteen years after proper consideration by the appropriate government, or else his term of imprisonment extends for life.

Punishment for Murder by a Life-Convict

Section 303 of the Indian Penal Code provides that any person who is sentenced with life imprisonment commits murder then the person shall be punished to death. The constitutional validity of this Section was questioned in the case of Mithu v. State of Punjab. This Section was held to be unconstitutional in this case as the court  held that awarding mandatory death penalty for a life convict is unreasonable and arbitrary, for various reasons like:

• The life convict is already exposed to a lot of stress in the jail premises;
• There is no justification and intelligible differentia for prescribing a mandatory sentence of death for the offence of murder committed inside or outside the prison by a person who is under the sentence of life imprisonment;
• A standardised mandatory sentence and that too in the form of a sentence of death fails to take into account the facts and circumstances of each particular case.

Punishment for Culpable Homicide

Culpable homicide is different from murder and the difference is enumerated in the Indian Penal Code. The Indian Penal Code considers the culpable homicide to be genus whereas the murder is a species. To put it in a nutshell, “all murders are culpable homicide but not all culpable homicide are murders”. The intention to cause death is the main difference between murder and culpable homicide. Culpable homicide is not considered as the murder if it comes under any one of the five exceptions mentioned under Section 300. Section 304 of the Indian Penal Code provides various punishments for culpable homicide not amounting to murder. The various punishments provided for culpable homicide not amounting to murder are:

• Imprisonment for life;
• Imprisonment of either description which may be extended up to ten years;
• Fine.

Proposals for Reform

There are various reforms which need to be done in order to make these provisions more effective like:

• There have to be proper uniform judicial guidelines that would make the process of deciding the sentences.
• The trial can be expeditious also but it has to be noted that all the procedures of the Code of Criminal Procedure are followed.
• There have to be proper guidelines for awarding death penalty.
• Various new provisions have to be brought out which would deal with the reformative form of punishments.
• Section 303 is held to be unconstitutional but still, it is not removed from the act, so there needs to be a necessary amendment in that aspect.

Conclusion

The Court understands the value of life and there are only three executions in recent times. The Court has to award the death penalty only in rare situations if the accused is a threat to the society or else the Court has all the rights to reduce the punishment. It would also be a great advancement if various Courts try to bring out uniform guidelines to award punishment.

References

• https://blog.ipleaders.in/death-penalty/
• https://www.india.gov.in/sites/upload_files/npi/files/coi_part_full.pdf
• http://lawcommissionofindia.nic.in/cpds1.pdf
• http://lawcommissionofindia.nic.in/reports/report262.pdf

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

The post Punishment for Murder Under IPC appeared first on iPleaders.

This article is written by Nishtha Pandey (batch 2023), from Dr. Ram Manohar Lohiya National Law University. In this article basic aspects of the Appropriation of payment and the Discharge by agreement, have been discussed in detail. 

Introduction 

Appropriation means ‘application’ of payments. In case of a creditor and a debtor, Section 59 to 61 of the Indian Contract Act, 1872, lay down certain rules regarding the Appropriation of payments. When a debtor pays an amount to the creditor, the creditor is to take note of these sections before applying the payment to a particular debt, because the creditor would be inclined to appropriate payments to the debt which is not likely to be realized easily. In case both parties do not specify the appropriation then the law would take the responsibility and appropriate accordingly.

A discharge of a contract by agreement, on the other hand, is when the contract is ended because the conditions are not fulfilled. However, the involved parties can also terminate a contract when the primary terms and conditions of the said contract have not been fulfilled. Essentially, the difference between a discharge of a contract and terminating contract is the reasons why the contract is coming to an end.

 Appropriation by debtor

Under Section 59 of the Indian Contract Act, 1872, it is stated that if the debtor owes several debts to the creditor, and makes a payment to any of them and later requests the creditor to apply the payment to the discharge of a particular debt. If the creditor agrees to this request, he is bound by such appropriation. This section applies to several distinct debts and not to a single debt, or to various heads of one debt. This is not applicable where the debt has merged into a decree. The appropriation may be implied or expressed by the creditor. The basic idea is that “When money is paid, it is to be applied according to express the will of the payer and not the receiver. If the party to whom the money is offered does not agree to apply it according to the will of the party offering it, he must refuse it and stand upon the rights which the law has given him”

Clayton’s Case

In England, it has been considered a basic rule since the case of Devaynes vs Noble, also known as Clayton’s case. In this, it was held that the debtor can request the creditor to appropriate the amount to any of the debt in case he owes to the creditor several and distinct debts, if the creditor agrees to it, then he is bound by it. 

Several and Distinct Debts

Section 59 applies to the debt which is several and distinct and does not apply in the cases where there is only one debt even if it is to be paid in installments. The test to know whether the debts are distinct is the person can sue for it separately. 

Intimation by the Debtor

The debtor must at the time of the payment of the debt, must intimate the creditor that the amount must be paid for the liquidation of a certain debt, and the creditor has to appropriate it accordingly. The creditor has the right to refuse any conditions made by the debtor during the payment of the debt. Once appropriation has been accepted, then the creditor cannot alter the terms of the appropriation, without the consent of the debtor. 

The debtor should communicate his appropriation either expressly or impliedly, through the circumstances indicating such intention.

Proof of Intention

Intention about the appropriation of the payment by the debtor must be proved by circumstances. Where the debtor alleges appropriation in a particular manner then he must prove it. Moreover, entries in the book of the creditor could be considered for the proposed appropriation by the debtor.

Contract of Guarantee

The right to appropriate is available to the debtor and not the surety. A surety is also bound by the creditor’s appropriation. Also, the surety has no right to insist on the appropriation of any payment to the guaranteed debt, unless the circumstances of the case are such that they show such intention.

Appropriation by creditor 

Under Section 60, the creditor is also competent for appropriation. If the debtor makes any payment without any appropriation then the creditor can use his discretion to wipe out any debt which is due. He may use it for the payment of a time-barred debt or wipe out the debt which is carrying a lower interest rate. The right of appropriation lies with the creditor until the last moment, even when he is examined at the trial or before any act which renders him inequitable for him to exercise this right. The creditor, in this case, has a lot of scope for exercising his right, he can put himself in the most advantageous position. Moreover, he need not express himself in express terms while doing so. As long as notice has not been given in respect of the appropriation of any amount, the creditor can change it and can appropriate some other claim.

Lawful Debts

The creditor must establish the existence of a lawful debt actually due. Under this section, the appropriation cannot be made against any unlawful debt. In several cases, it was held by the court that a creditor can even appropriate towards an unenforceable debt due to some defect.

Time-Barred Debts

The creditor, in the absence of any appropriation by the debtor, can appropriate the amount of a debt barred by the Limitation Act,1963. This usually happens as the creditor appropriate the amount to a time-barred debt and sue the debtor for the ones not barred. However, the amount cannot be appropriated to a debt barred by a statute after an action has been brought and judgment has been delivered. 

Principal and Interest on Single Debt

There is a lot of conflict amongst the opinion of the court as to whether the provisions of this Section would apply to the principal and interest of the debt or not. In the case of Jia Ram vs Sulakhan Mal (Air 1941 Lahore 386), it was held that the principal and the interest would not be applicable under this. 

As under the common law, the rule that applies is that where the principal and interest has accrued on a debt, sums paid where interest has accrued must be applied first to the interest. This rule is based on “common justice” else it would deprive the creditor of the benefit to which he is entitled under his contract and would be most unreasonable for him.

Appropriation by law 

Section 61 is applied in a situation when neither of the parties makes the appropriation. To settle this deadlock, then the law gets the right to appropriate. In such cases, the debt is settled in accordance with the order of the time they have incurred. In case all the debts are of the same time then the debts would be discharged proportionately. Under this Section not only the express agreement but also the mode of dealing between the parties.

Assignment of contracts 

Assignment of contract means the transfer of the contractual rights or liabilities by a party of the contract to some other person who is not a party to the contract. For Example- A owes B debt and B owes to C. B can ask A to directly pay the amount to C, and if A agrees to this, then this will be an assignment of a contract. 

Assignment of liabilities 

In an assignment of the contract, it is important to note that the liabilities cannot be assigned. The promisor has to insist that the responsibility of the performance of the contract lies on the promisor himself. It becomes more important when the work is of personal nature and demands personalized skills like painting, singing. The promisor, in that case, can object to the performance of the contract which is done by some other person who is not a party to the contract.

The contractual liabilities may be assigned in the following two ways:

By the act of the party

• Assignment with the consent of the other party and the assignee;

For Example- novation of a contract. 

• Assignment with the consent of other parties, but without the consent of the assignee. 

For Example- A and B are party to a contract, they both decided to assign the liabilities on C, who is a stranger to a contract.

• The assignment without the consent of the other party but with the consent of the assignee i.e. a voluntary assignment.

For Example- A and B are party to a contract, B assigns the liabilities of the contract to C, who is a stranger to contract, with his consent but without the permission of A.

By operation of law

The operation of law is another mode of a valid assignment of any contractual liabilities to a stranger. Such assignment is also called an ‘involuntary assignment’ or an ‘automatic assignment’ of contractual burdens or obligations. Such assignment may take place in the following circumstances:

1. On the death of the promisor.
2. On the retirement of a partner.
3. On insolvency of the promisor.
4. On winding up of a company.

Assignment of rights 

The rights are assignable under a contract unless the contract is personal in nature or the rights are incapable to be assigned either by law or under any contract that is entered by the parties. The intention regarding the assignment of the rights needs to be gathered from the nature of the agreement or from the prevailing circumstances. 

Even when there is no prohibition as to the assignment of the rights, but if the court from the facts of the case determines that there are various personal obligations under the contract, hence the rights under this cannot be assigned. 

One of the leading authorities is the decision of the Supreme Court in the case of Khardah vs Raymon, in this case, it the dispute arose because of a contract for the purchase of mill by a Pakistani jute dealer who failed to supply the goods as agreed. The court held that the contract for the purchase of the foreign jute was not assignable because the goods had to be imported from under the license which was not transferable. The other question which was put up was whether the dealer could assign his rights to that price on the delivery of the goods. The court accepted that there is nothing personal about the sale of goods. Moreover, it is established that the arbitration clause does not take away the right of the party to assign if it is otherwise assignable. In fact, the rights of the seller also do not obstruct the assignability of the contract. In the case, there was no provision in the contract which prohibits the assignment. The court stated that in the law there is a clear distinction between the assignment of the rights under a contract by the party who has performed the contract and his obligations, and the assignment of a claim for compensation which one party has against the other party for the breach of contract. The latter is just a claim of damages that can not be assigned in law, the former is the benefit under the agreement, which is capable of assignment.

Personal Nature of the Contract

The contract of personal nature involved the personal creditworthiness of the buyer even in the case of the mode of payment, which was not capable of being assigned. This was held in the case of SAIL vs State of MP in which the central government assigned a piece of land to its own corporate undertaking with rights, liberties and privileges, one of which was the exemption from tax. The court rules that the assignee became entitled to the exemption as the successor.

Unilateral cancellation of the sale deed

It is not possible for the vendor to make a deed of cancellation of the sale deed made, even if the ground is full of consideration was not received by the vendor. Such a deed would result in the revocation of the contract and would require the order of the court. Moreover, a deed of cancellation of a sale unilaterally executed by the transferor does not create, assign, limit or extinguish any right, title or interest in the property and is of no effect. Hence such a deed could not be accepted for registration.

Effect and formalities of assignment

Consideration 

The assignment requires some form of consideration from the assignor to the assignee. In the absence of any consideration between them, the assignment will be revocable. But when an assignment is made by way of gift, by following all the essential conditions of a gift, then it can not be revoked. In order to make a voluntary settlement valid, the settlor must do everything, which according to the nature of the property was necessary to do in order to transfer the property.

Subject to equities 

The title of the assignee is subject to all the equities that exist or arise up to the time when the notice of assignment is given to the debtor. (for instance, A is the assignor, B is the assignee and C is the debtor).The assignee would not be affected by the equity of personal nature between the assignor and the assignee. For example, the right to claim damages for the fraud committed by the assignor cannot be used to defeat the right of the assignee. 

Notice of assignment 

Notice of assignment should be given to the debtor. This is very useful as it binds the debtor. If the notice is not given then the debtor could make the payment of the assignor himself and will get discharged. Moreover, if notice is given then the assignment would not be affected by any equity that may arise. Moreover, if the notice is paid to the assignor who has many assignments then, in that case, the notice is given to him at that point of time, then that assignment will have priority over others even if it was received later.

Discharge by agreement

Discharge of a contract means to end a contract. Discharge of the contract can take place through:

• By Performance;
• By agreement or by consent;
• By promise failing to offer facilities for performance;
• By breach of contract;
• By impossibility of performance;
• By death;
• By refusing tender of performance;
• By unauthorized material alteration of the contract;
• Discharge by lapse of time;
• By operation of law.

The parties to a contract are free to alter or rescind the entire term of the contract. Novation or modification can happen in the same manner as that of the conclusion of the contract. If one party proposes a novation and the other party accepts it but in a qualified manner, then it will not amount to novation. A mutual abandonment, cancellation, or rescission must be clearly expressed. Novation or modification is effected only when all the parties agree to it. The substituted contract need to be enforceable just like the original contract. In case the new contract is not enforceable then the original contract would be operative. In such cases, the consideration would be the release of the existing contract for a promise to undertake a new contract. 

Contracts which need not be performed 

Under Section 62 of the Indian Contract Act, 1872, it is given that if the parties to a contract agree to substitute a new contract for the earlier contract or rescind it all together then the original contract need not be performed.

Novation 

The word “novation” is not used in the section per se but is present in the marginal notes. It is defined that a contract that is already in existence is substituted by a new contract and the consideration mutually discharged of the old debt. The outline principle of novation is “discharge of one debt or debtor and substitution of one debt or debtor”. Novation cannot be done unilaterally, it has to be with the consent of both the parties. Novation is the complete substitution of the old contract with the new contract and not mere variation in the terms of the original contract. Novation would come into effect when the terms of the new contract are so inconsistent with the former, that it is impossible to perform the former. In the case of Vishram Arjun vs Irakulla Shankaraiha, the court held that the essence of novation does not lie in the complete dissimilarity of the terms but in the intention of the parties to substitute the original contract with the new one. 

A common instance of the novation of the contract is in the case of a partnership where on the dissolution if some partners continue to do business and undertake between themselves and the retiring partner that they will assume and discharge the liabilities of the business. They give this notice to the creditor and if he gives his asset to it then a contract and a new firm is formed.

Hence novation of a contract is of two kinds:

• Novation involving a change of the party.
• Novation involving the substitution of a new contract in place of the old.

A novation usually takes place:

• When a new partner is admitted,
• When a partner retires,
• The new firm is constituted after the admission or retirement and it accepts the liabilities of the old firm.

Change of parties 

The substituted contract would subsist between the parties of the original contract. The novation cannot be forced on a party. It has to be considered in every case not only whether the new debtor has accepted the liability but also if the creditor has agreed to accept his liabilities in substitution of the original debtor. The discharge of the original debtor must precede and is distinct from the acceptance of the creditor. The statutory novation is usually comprised in a single statue or decree of practical purposes, they function simultaneously but has a distinct legal identity of its own. 

Substitution of a new agreement

If A is a debtor, and the creditor agrees to accept B in the place of A as a debtor, then the previous contract between A and the creditor comes to an end.

For the novation of the contract, the original contract must be substituted by a new contract and the original contract is now discharged and need not be performed. It is important that the original contract must be subsisting and unbroken. The substitution of the contract can not take place if the original contract is breached.

In the case of Koyal vs Thakur Das Naskar, the plaintiff sued to recover a sum owed to the defendant. After the due date, the plaintiff agreed to accept a particular amount in cash and the rest by way of the bond, which was to be paid on the installment basis. However, the defendant neither paid the bond nor the cash. The plaintiff subsequently sued him for the original bond. The court held that the original bond is discharged by the breach and not by novation, hence the plaintiff has to sue on the basis of breach of contract.

The Supreme Court in Lata Construction vs Rameshchandra Ramniklal stated that one of the essential conditions of the novation of the contract is that there should be a complete substitution of the new contract in place of the earlier contract. In this situation, the original contract need not be performed. Substitution of the new contract in place of the old which would have the effect of completely rescinding or altering the terms of the original contract has to be an agreement between the parties. The substituted contract should extinguish the previous contract. 

It is further necessary that the new agreement should be valid and enforceable. Thus where an existing mortgage is replaced by a new agreement of mortgage and the new agreement is not enforceable because of lack of registration, in this case, it is held that the original contract is still functional.

It is obvious that the presence of consideration in these cases is mandatory, as unilateral alteration of terms is permissible. The promise of a fresh contract in place of the original one is also a sufficient consideration in these cases. 

Effect of Novation

After a novation, when a new contract is enforceable, then the relationship between the parties would be governed by the new contract and the obligor will be relieved of all his pre obligations. The substituted agreement gives rise to a cause of action and limitation would be counted on the basis of a new promise. Where the parties release each other from the mutual obligation of each other, then at that point of time at which such settlement was made would be the time at which the contract terminates.

No Novation

However, where the parties had the option to terminate the contract and the parties by subsequent contract postponed the termination of the contract, then this will not amount to novation of a contract. Even if the terms of the old contract are kept alive, even then, it would not amount to proper substitution and hence no novation will take place. It is important to note that if in the original contract the provision of arbitration is present then the novation of the contract will have no effect on the arbitration clause and it would not get discharged.

There would be no novation where the contract itself contains a provision for the payment by one party of the enhanced rates dependent upon a contingency. Moreover, to secure a debt by a deed, which will operate only as a mortgage and would not replace the existing personal liability, then such is not a novation of a contract.

Formality

A subsequent contract substituting the original contract or rescinding it or altering it, may be oral or written or even be implied from the conduct of the parties. Section 92 of the Indian Evidence Act 1872, excludes the oral evidence from the purpose of varying, adding or subtracting from the terms of the contract or any matter required by law to be in writing. However, the proviso four of that section provides that the existence of any distinct subsequent oral agreement to rescind or modify such contract, grant or disposition of property may be proved. But where the original contract is of such a nature as that the law requires to be in writing or where its execution has been followed by registration, the only way of proving the modification the original contract will be by proof of an agreement with a like formality.

What do a novation contract consist of?

Release Clause

It is important that a clause in the novation deed outlines the discharge of both rights and obligations from the outgoing party. It is important to ensure that the clause is clear and concise so that there is no scope for confusion.

Representations and Warranty Provisions

The deed should also outline that both the outgoing and continuing party have the full legal capacity to proceed with business, including relevant authorisation. It should also evidence that both parties have taken all actions to the best of their abilities to finalise the novation deed.

Insurance/Indemnity Clause

If one is the incoming third party, he or she may want to have an indemnity clause. This can protect him or her from being liable for the work completed before the novation date. This again can help to reduce the chances of a conflict.

Costs

For various transactions like novated leases etc., parties should calculate and include the agreed costs.

Conclusion 

Under the appropriation of a contract, the debtor has the first right to intimate appropriation of a debt at the time of payment if he fails to exercise his right, this right then goes on the creditor and if the creditor also fails to exercise his right the appropriation will be done in order of time by the law itself. In case of debts of equal standing, each will be appropriated proportionately. 

The discharge of the contract involves the novation of the contract. In novation, the whole contract is substituted by a new contract. This substitution takes place mutually by both parties. The parties could communicate their opinions expressly or it could be implied due to the circumstances.

References 

• Avtar Singh, the law of contract
• Pollock and Mulla, The Indian Contract Act,1872
• https://lawpath.com.au/blog/what-is-novation
• https://blog.ipleaders.in/contract-discharge/

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

The post Appropriation of payments and Discharge by agreement appeared first on iPleaders.

The article is written by Ayush Verma, a student of RMLNLU, Lucknow. This article deals with the provisions relating to receipt of stolen property under IPC.

Introduction

Receiving a property that a person knows to be a stolen one is a crime. Such property may have been stolen by way of theft, extortion, or by any other way. It is considered a crime because buying of such property would encourage crimes like theft, robbery etc as the person stealing such property would get money after selling the stolen property. Therefore, receiving of stolen property is a crime to prevent the selling of stolen property which may reward thieves for their criminal acts. It also prevents concealing of property by a person who knows that such property is obtained by an illegal way. There are various provisions related to the receiving of stolen property in IPC. These are given under Section 410 to 414 of the IPC.

Stolen Property

Section 410 states that a property whose possession has been transferred by theft, extortion, or robbery and which has been criminally misappropriated or in respect of which criminal breach of trust has been committed, is considered a “stolen property”, where the transfer of it has been made, or its misappropriation or breach of trust has been committed, within or without India. It further states that if the property subsequently comes into the possession of a person who is legally entitled to possess that, it then ceases to be stolen property.

Essential Ingredients

Property should be Stolen Property

The property being received by a person must be a stolen property to constitute an offence of receiving stolen property under the provisions of the Code. Property whose possession is transferred by the five ways given in Section 410 is considered a stolen property. Those are:

1. By theft;
2. By extortion;
3. By robbery;
4. By criminal misappropriation; and
5. By criminal breach of trust.

Ownerless Property

It is based on the concept of res nullius which means that a property which has no owner or which has been abandoned by its actual owner. A property which has no owner cannot be subject to theft and hence, receiving it would not lead to receipt of stolen property. For e.g- a bull which has been abandoned by its owner and belongs to no one, taking it would not amount to receiving of stolen property.

‘Within or Without India’

Section 410 says that it is immaterial to consider whether the transfer has been made, or criminal misappropriation, or breach of trust has been committed, within or outside India. The transfer of such property can be made within or without India to qualify it as “stolen property”.

Property Obtained Otherwise

It must be noted that a property obtained by cheating or forgery is not called a stolen property.

Property exchanged or converted

A property which is obtained by exchanging or converting stolen property is not stolen property in itself. For e.g. if some amount of cash is obtained by selling a stolen property then that cash would not be called stolen property. However, if an ingot is made by melting a stolen jewellery or ornament, then that ingot would be stolen property as it is the same in substance, though altered in appearance.

Dishonestly Receiving or Retaining Stolen Property

Section 411 proposes that whoever dishonestly receives or retains a stolen property, knowing or having reason to believe that such property is a stolen one, shall be imprisoned for a term which may extend up to three years, or with fine, or both. Therefore any person having belief or knowledge about any stolen property must not receive or retain it. 

The liability under Section 411 arises not only for dishonest “reception” but also for dishonest “retention”. The difference between the two is that in the former, the person has received the property dishonestly but may not necessarily retain it dishonestly. However, in the latter, there is a change in the mind of the person from “honest” to “dishonest” and he then retains that property dishonestly with himself.

Following are the ingredients that need to be established to prove the guilt of the accused:

• That the accused had possession of the stolen property.
• That before the accused got the possession of the property, the property was in some other person’s possession.
• That the accused had knowledge and reason to believe that the property was a stolen one.
• That the accused had intent to deprive the owner of his or her property by keeping or selling it to another party.

Offence under Section 411 is cognizable and warrant should be issued in the first instance. The offence is non-bailable and compoundable with the permission of the Court. The offence is tried under the Magistrate.

Receiving or Retaining Stolen Property with Knowledge

The offence under Section 411 is not made punishable just for receiving a stolen property from any person for any particular reason. The offence is made punishable only when someone buys such property with the knowledge or having reason to believe that it was stolen property.

The word “believe” involves the necessity of establishing that the circumstances were such that a reasonable person would be convinced that the property he is purchasing or dealing with, is stolen.

If a person has obtained a property that he does not know to be stolen, it is not sufficient to show that the accused was careless, or he had reason to suspect that the property was stolen or he did not make sufficient enquiry to ascertain the status of that property. It is immaterial whether the person receiving it knows or not who stole it. Initial possessing of that property is not a crime but if the person retains it after knowing that it was stolen property, then the person is liable.

In the case of Bhanwarlal v. State of Rajasthan, the accused purchased 9kgs of silver for a paltry sum, having knowledge that it was stolen property. The person was not considered a bona-fide purchaser by the Court. Silver ingots were recovered from many persons at his instance and his conviction was held to be sustainable.

In the case of Nagappa Dhondiba v. State, here the stolen ornaments of a deceased person which she had been wearing when she was alive were discovered, from the information given by the accused, within thirty days of the murder of the deceased. It was held by the Court that the accused can only be made liable under Section 411 and not under Section 302 for murder or Section 394 for voluntarily causing hurt in pursuance of robbery as there was no evidence to establish the liability of the person on those grounds.

In the case of State of Karnataka v. Abdul Gaffar, a copper pot containing Rs. 200 in it was stolen from the temple. The presumption was made that the person in whose possession the pot was found must have committed theft. The property was worth Rs. 600. A fine of Rs. 200 was imposed under Section 411 considering the fact that it was stolen from a temple.

Possession

It is not necessary to establish that the stolen goods should have been produced from the actual possession of the accused. It should be shown that the accused after believing that the property is a stolen one held that property in his possession with a dishonest intent. Therefore the “possession” must be a conscious one, that the person having knowledge about the stolen property held the same, in order to charge him with criminal liability. 

The criminal liability for possession of stolen property must be actual and exclusive. It must not lead to constructive possession i.e. a person who is the superior person in a joint family is presumed to have possession of the entire family property, and if one of the members of his family commits such a crime, that supreme person cannot be held to be liable for the possession of stolen property by that member. Only that person shall be exclusively made liable who was in actual possession of the stolen property with a dishonest intention and having knowledge or reason to believe that such property was a stolen one.

An accused would only be held liable for the property that has been recovered from him and not for the rest of the property that may be connected with it. The fact that the rest of the property is not recovered from him does not change his liability. Also, mere knowledge about the whereabouts of the property does not make a person liable under Section 411.

In the case of Trimbak v. State, the place from which the property was taken was in open and easily accessible to all sundry and that in these circumstances it was not safe to hold that the place was in the possession of the accused, or that the property was recovered from his possession. The fact that the recovery is done from accused is compatible with the circumstance that somebody else having placed the articles there and that resulted in accused acquiring the knowledge about their whereabouts and the case being so, the fact of discovery cannot be regarded as a conclusive proof that the accused was in possession of these articles. Based on the reasons given above, the Supreme Court ordered the acquittal of the accused.

Receiving Property Stolen in the Commission of a Dacoity

Section 412 says that any person who dishonestly receives or retains any stolen property, the possession of which, after having knowledge and reason to believe, has been transferred by the commission of dacoity, or has dishonestly received from a person, whom he knows or has reason to believe to belong or to have belonged to a gang of dacoits, a property which he has knowledge or has reason to believe that the property is a stolen one, shall be punished with imprisonment for life, or with rigorous imprisonment for a term which may extend up to ten years and shall also be liable for a fine.

Following ingredients must be satisfied to make a person liable under Section 412:

• That the property is stolen property;
• That such property was concerned with dacoity;
• That the accused dishonestly received it; and
• That accused had knowledge or reason to believe that the said property was stolen in dacoity.

The offence under Section 412 is cognizable, non-bailable and non-compoundable and triable by a Court of session.

Habitually Dealing in Stolen Property

Section 413 states that any person who habitually receives or deals in a stolen property, having knowledge or reason to believe that the property is a stolen one, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend upto ten years, and shall also be liable for fine.

Following ingredients shall be satisfied for making a person liable under Section 413:

• That the property in question is a stolen property;
• That the accused received that property;
• That the accused habitually deals in such property; and
• That the person did so having knowledge or reason to believe that the property was stolen property.

The offence under this Section is cognizable, non-bailable and non-compoundable and it is triable be a Court of session.

Concealing and Disposing of Stolen Property

Section 414 deals with concealing and disposing of stolen property. It states that any person who voluntarily assists in concealing or disposing of that property or making away of that property which he has knowledge of or reasons to believe to be stolen property, shall be punished with imprisonment of either description for a term which may extend up to three years, or with fine, or both.

Following ingredients need to be satisfied before making a person liable under Section 414:

• That the property in question is a stolen property;
• That the accused had knowledge or reasons to believe that the property was stolen property; and
• That the accused voluntarily assisted in concealing or disposing of or making away with such property.

The offence under Section 414 is cognizable, non-bailable and non-compoundable and triable by a Magistrate.

Conclusion

The provision seeks to protect the crimes like theft, robbery as receiving of stolen property would encourage such acts. A person engaging in obtaining of stolen property commits a crime of receiving stolen property. However, there must be a dishonest intention and knowledge or reason to believe that the property being received is a stolen one to establish the guilt of the person. 

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

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This article is authored by Miran Ahmed who is a student of BBA.LLB(H) at Amity Law School, Kolkata; and deals with the essentials and fundamentals of contract under the Indian Contract Act, 1872.

Introduction

Criminal cases can be divided into two types: Summons Case and Warrant Case. A summons case relates to an offence not being in a warrant case. Warrant cases are those that include offences punishable with death penalty, imprisonment for life or imprisonment exceeding more than two years. The criteria that differ a summons case from a warrant case is determined by the duration of punishment in any offence. The case of Public Prosecutor V. Hindustan Motors, Andhra Pradesh,1970, is a summons case as the convicted is sentenced to pay a fine of Rs. 50. The issue of summons or warrant, in any case, does not change the nature of the case, for instance, a warrant issued in a summons case does not make it a warrant case as observed in the case of Padam Nath V. Ahmad Dobi, 1969. A trial in a warrant case begins by either filing a First Information Report or FIR in a Police Station or filing it directly before the Magistrate.

Section 238 to 250 of the Criminal Procedure Code, 1973 (CrPC) deals with the trial of warrant cases by magistrates. Trial of warrant cases are of two types:

1. By a police report- Section 173 of CrPC mentions a police report as a report forwarded by a police officer to the Magistrate. In this case, the accused appears or is brought before a magistrate at the commencement of trial. Section 173(2)(i) mentions that as soon as the police investigation is completed, the police station must forward it to the Magistrate empowered to take cognizance of the offence.
2. By other than a police report- The complaint is filed directly with the Magistrate in this case.

The procedure of trial in warrant cases by magistrates in the following way:

1. Compliance with Section 207;
2. When accused shall be discharged;
3. Framing of charge;
4. Conviction on a plea of guilty;
5. Evidence for Prosecution;
6. Evidence for Defence Side;
7. Evidence for Prosecution;
8. When accused shall be discharged;
9. Again Evidence for Defence;
10. Acquittal or conviction;
11. Absence of Complaint;
12. Compensation for accusation without a reasonable cause.

Scope

The Magistrates’ Court forms the bedrock of the legal system in India and the process of trial of warrant cases conducted by magistrates. This is explained in the Criminal Procedure Code, 1973, which classifies warrant cases as those that involve offences punishable with death penalty, imprisonment for life and imprisonment exceeding more than two years. Warrant case proceedings can begin by filing an FIR in the police station. In this case, the police conduct an investigation and forward the report to the Magistrate. The Magistrate then furthers the proceedings under the procedure established by law and the offender is brought before the Magistrate or appears voluntarily. Or the complaint can be filed directly with the Magistrate to initiate the proceedings against an offender.

Cases instituted on a police report

This type of case is filed as an FIR in the police station and is the first step in the process of warrant cases instituted on a police report. The case is then forwarded to the Magistrate. When any case is instituted on a police report, and the accused is brought or appears voluntarily before the Magistrate, the Magistrate shall satisfy himself for complying with the provisions of Section 207. And Section 238 to 243 of CrPC lays down the procedure of trial of warrant cases instituted on a police report and the steps are mentioned below.

Initial steps in the trial

The initial steps involve the filing of an FIR. Once the FIR is filed in the police station, an investigation is conducted to discover the facts and relevant details of the case. Once the investigation is completed, a charge-sheet is filed and the documents are forwarded by the police station to the Magistrate. The steps in warrant cases instituted on police report are:

1. Supply of copy of police report to accused in compliance with Section 207. (Section 238)
2. Discharge of accused on baseless charges. (Section 239)
3. Framing of charges. (Section 240)
4. Conviction on a guilty plea. (Section 241)
5. Evidence for the prosecution. (Section 242)
6. Evidence for defence. (Section 243)

Supply of copies to the accused

A copy of the police report and other documents relevant to the case should be supplied to any person or persons who appears or is brought before a magistrate at the commencement of the trial. And the Magistrate shall satisfy himself in complying with the provisions of Section 207. This is to ensure that the accused are aware of the charges against him and can prepare for defence under fair trial by law.

Discharge of accused if allegations against him are baseless

Once the Magistrate receives the police report and other relevant documents and provides them to the accused, the Magistrate shall consider each report. A hearing shall be convened and a reasonable opportunity shall be provided for both the accused prosecution to present their case. The Magistrate examines the accused if necessary. If the charge against the accused is discovered to be baseless and lacking in substance, the accused shall be discharged under Section 239. The prima facie of the case is also considered.

In the case of State vs Sitaram Dayaram Kachhi, 1957, the accused, Sitaram was acquitted under Section 239.

In the case of State of Himachal Pradesh V. Krishan Lal Pradhan, 1987, the Supreme Court held that there was sufficient relevant material on record and the prima facie of the case was established by one judge. But the succeeding judge came to the decision on the same materials that no charge could be established and therefore, an order of discharge was passed. But it was held by the Supreme Court that no succeeding judge can pass an order of discharge.

Framing of charge

Section 240 of CrPC authorises the Magistrate to consider the police report and even to examine the accused if he feels the need to. If the Magistrate feels the presence of valid grounds to presume that the accused has committed the offence and is capable of committing such an offence, and he is competent to try the offence to adequately punish the accused in his opinion. Then the written charge is framed against the accused and the trial is conducted after the charge is read and explained to the accused. Framing of the charge is a duty of the court and the matter must be considered judiciously.

In the case of Lt. Col. S.K. Kashyap V. The State Of Rajasthan, 1971, the accused files an appeal challenging the authority of the special judge appointed to hear the case. The appeal is failed and dismissed and the case proceedings are continued.

Explaining the charge to the accused

Clause 2 of Section 240 describes that the charge against the accused shall be read and explained to the accused. Once the accused understands the charges against him, he shall be asked whether he pleads guilty of the offence or wishes to challenge the charge by a fair trial under the law.

Conviction on a guilty plea

The accused can plead guilty to cut short the procedure of law and reduce the punishment for his offence. The Magistrate records the guilty plea and convicts the accused on his discretion. (Section 241)

Evidence for prosecution

Section 242 of CrPC defines the procedure with regards to the gathering of evidence against the offender and recording the evidence after examination and cross-examination to acquit or convict an accused individual. In a criminal trial, the case of the state is presented first. The burden of proving the accused guilty is on the prosecution and the evidence must be beyond a reasonable doubt. The prosecution can summon witnesses and present other evidence in order to prove the offence and link it to the offender. This process of proving an accused individual guilty by examining witnesses is called examination in chief. The Magistrate has the power to summon any person as a witness and order him to produce any document. State vs Suwa, 1961 is a case where the orders of the Magistrate to acquit the accused were set aside and a retrial was ordered by sending the case to a District-Magistrate who sent them for a trial to a Magistrate other than the one that tried the case originally.

Steps in evidence presentation of prosecution

Fixing date for the examination of witnesses

Section 242(1) declares that once the charge is framed and read to the accused and he does not plead guilty and wishes to proceed with the trial, the Magistrate shall fix a date for the examination of witnesses.

Examination of witnesses

According to Section 242(2), the Magistrate, on the application of the prosecution, has the authority to issue summons to any witnesses and direct them to attend or produce any document or thing relevant to the case. The cross-examination by the defence is allowed by the Magistrate before some other witness has been examined. This is done to ensure that no perjury is committed and the prosecuting witness does not vilify the accused and gets him convicted on false information. And that the relevant information can be refuted by the defence or further explained in a defensive manner.

Presentation of evidence

The testimonies of witnesses once they are cross-examined by the defence are considered evidence. And other documents or relevant things are brought to the Magistrate to link the accused to the offence. The defence is informed of the evidence presented and may challenge the evidence as may be deemed necessary.

Record of the evidence

Section 242(3) declares that on the date fixed, the Magistrate shall proceed to take all pieces of evidence produced in support of the prosecution and record them based on their relevance to the case. The testimonies of witnesses and any evidence provided to prove the accused had committed the offence by the prosecution is recorded by the Magistrate. The Magistrate may permit the cross-examination of any witness to be deferred until any other witness or witnesses have been examined or recall any witness for further cross-examination by the defence.

Evidence for the defence

Section 243 of CrPC describes the procedure with regards to collecting and presenting evidence in the defence of the accused. After the prosecution is finished with the examination of the witness, the accused may enter his defence in a written statement and the Magistrate shall file it with the record. Or defence can be produced orally. After the accused has entered his defence, an application may be put to the Magistrate to perform cross-examination of any witness presented by the prosecution. The Magistrate may then summon any witness under Sub-section 2 to be cross-examined by the defence. The prosecution must establish the case beyond a reasonable doubt and if the defence can prove a reasonable doubt then the evidence submitted by the prosecution is not valid and cannot be recorded in court against the accused.

Written statement of accused

Section 243(1) declares that the accused shall be called upon to enter his defence and produce relevant evidence. Any written statement presented by the defence shall be recorded by the Magistrate and filed. Under Section 313(1), the accused shall have the opportunity to be heard and explain any circumstances appearing against him or other facts and circumstances of the case that are relevant. This may be done by a written statement or orally.

Examination of witnesses for the defence

Section 243(2) describes the process of examination of witnesses for defence of the accused. An application can be made by the defence to the Magistrate to compel the attendance of a witness for the purpose of examination or cross-examination, or for the production of any relevant documents or other things. The Magistrate shall issue such directions unless he feels the application has been put for the purpose of delay or vexation or defeats the ends of justice and refuse the application on those grounds. The grounds of refusal of the application by defence shall be recorded by the Magistrate in writing. However, if the accused has had an opportunity to cross-examine a witness presented by the prosecution, or has already cross-examined a witness, then the attendance of such witness shall not be compelled under this section; unless the Magistrate feels such attendance is necessary for justice. Sub-section 3 mentions that the reasonable expenses incurred by the witness in attending the Court for the purpose of the trial must be deposited in Court.

Record of the evidence

CrPC declares that any evidence or witness testimonies shall be filed by the Magistrate with the record. The evidence submitted can be in the form of a written statement or orally submission which the Court shall record. The evidence submitted is recorded to prevent tampering by an interested party to further their agenda and prevent justice from being served to the accused. Any written statement submitted by the accused is also filed with the record by the Magistrate.

Steps in evidence presentation of defence

Court witness

The defence shall have an opportunity to present witnesses to defend the accused. This may include an alibi or individuals that can point out that the accused was present elsewhere from where the offence was committed. The witnesses presented by the defence can be cross-examined by the prosecution and their testimonies challenged. The purpose of defence witness is to create a reasonable doubt to point out that the accused may not have been the exact individual that committed the offence. However, the prosecution can challenge the testimony of said witnesses and isolate the accused to prove beyond a reasonable doubt that the offence was committed by him.

Arguments submitted on behalf of defence

After the closing of evidence, the defence may produce an oral argument and submit a memorandum to the Court. A copy of this memorandum should be supplied to the prosecution. The court possesses the power to interfere if the oral arguments are not to the point and irrelevant to the case and made to waste the time of the court and delay the delivery of justice. The memorandum of argument must be submitted before the closing of oral delivery. Section 313(3) is a rule against self-incrimination and declares that the accused shall not render himself liable to punishment if he refuses to answer any question when examined by the prosecution, or gives false answers.

Judgement

The Magistrate holds the authority to judge the evidence provided by the defence and its relevance. If any evidence or testimony is in his opinion irrelevant or lacks substance, it may be thrown out and not filed with the record and shall no longer be considered in the case. The relevance of the evidence and testimony can be challenged by the opposing party but only the Magistrate has the authority to decide whether it shall be filed with the record or thrown out of the case.

Cases instituted otherwise than on a police report

A warrant case instituted otherwise than on a police report begins when a complaint is filed directly with a magistrate. The accused is brought or appears before a magistrate. The Magistrate begins the proceedings of the case by initiating the hearing process and files all the evidence received with the record. Sections 244, 245, 246 and 247 of CrPC sets the procedure of a warrant case instituted otherwise than on a police report and brought directly to a magistrate by filing a complaint.

Initial steps in the trial

The initial steps involve filing a complaint with a magistrate. Once the complaint is filed in the Magistrate, the accused is brought before the Magistrate or appears voluntarily. A hearing is conducted to determine the facts of the case. The prosecution begins the steps to prove that the accused has committed the offence beyond a reasonable doubt. And the defence can take the necessary steps to challenge the accusations and prove that the accused did not commit the offence. The steps in warrant cases instituted otherwise than on a police report are:

1. The preliminary hearing of the prosecution’s case.
2. Discharge of accused if the accusation is baseless. (Section 245)
3. Framing of charge. (Section 246)
4. Explaining charge to the accused. (Section 246(2))
5. Conviction on a guilty plea. (Section 246(3))
6. Choice of the accused to recall prosecution’s witness. (Section 246(5))
7. Evidence for Prosecution. (Section 244)
8. Evidence for Defence. (Section 247)

The preliminary hearing of the prosecution case

This is the first step in the proceedings of the case after the accused is brought or appears before a magistrate. The Magistrate considers the accusations and determines if the accusations have any base and a case can be made out against the accused. If the Magistrate determines that no case has been made out as the accusations lack substance and are groundless than the case will be dismissed and the accused shall be discharged.

Discharge of accused

Section 245 of CrPC states that the accused shall be discharged by the Magistrate if no case has been made out against him by the prosecution, which if unchallenged would warrant his conviction. And nothing can prevent the Magistrate from discharging the accused at any previous stage if the accusations presented by the prosecution is considered baseless by the Magistrate.

Framing of charge

Once all the evidence is presented to the Magistrate by the prosecution and after the examination of said evidence is conducted by him, the Magistrate is of the opinion that there is a reasonable ground for the accusations mentioned in the complaint and the accused is capable of committing the offence; a charge is framed and a fair trial is conducted. The accused is given an opportunity to defend himself. In the case of Ratilal Bhanji Mithani vs The State Of Maharashtra, 1978, it was determined that there were reasonable grounds to believe the accused had committed the offence, and the Magistrate began the trial proceedings by rejecting the dismissal of the case under Section 246(1).

Explaining the charge to the accused

Section 246(2) states that the charge against the accused should be read and explained to him, and he shall be asked whether he wishes to plead guilty to the charges or contest the said charges by proceeding with a trial.

Conviction on a guilty plea

Section 246(3) gives the accused an opportunity to plead guilty and present himself in mercy of the court. The Magistrate has the authority to record the guilty plea, convict and punish the accused as he sees fit. If the accused does not plead guilty, a subsequent hearing shall be held and the accused will be granted a fair trial. The Magistrate may state in writing, the reasons he thinks fit for recalling any witnesses for a cross-examination and if so, which witnesses of the prosecution, whose evidence has been recorded. The same reasons are recorded and prosecution’s witnesses are recalled for cross-examination by the Magistrate.

Choice of the accused to recall prosecution witnesses

Sub-section (5) and (6) under Section 246 empowers the accused to recall any witness named by the accused and perform a cross-examination or re-examination, after which they are discharged. The evidence of remaining witnesses provided by the prosecution is taken and they shall be discharged after cross-examination and re-examination as seen necessary. The application of this can be observed in the case of Varisai Rowther And Anr. V. Unknown, 1922.

Evidence for prosecution

Section 244 states that in warrant cases instituted otherwise than a police report and filed directly with the Magistrate, the accused is presented before the Magistrate who begins the hearing process by summoning the witnesses named by the prosecution and taking all the pieces of evidence produced as such. All evidence must be taken into consideration as under Section 138 of the Indian Evidence Act and filed with the record by the Magistrate.

Steps in evidence presentation of prosecution.

The accused cannot be charged by the Magistrate until the prosecution names witnesses or presents evidence in relation to the case. All the important evidence is collected after the witnesses are examined and the Magistrate determines if there is enough substance to frame a charge against the accused. The case cannot proceed further until the prosecution names witnesses and evidence is collected, examined and recorded as can be seen in Gopala Krishnan V. State Of Kerala. The magistrate is not obligated to file summons for the presence of a witness, but it is the responsibility of the prosecuting party to file an application with the Magistrate to request the summons of witnesses who shall present themselves before the court on a specified date and time as seen in Parveen Dalpatrai Desai V. Gangavishindas Rijharam Bajaj.

Summoning witnesses

The application is made to the Magistrate by the prosecution to summon any witnesses and the Magistrate issues the order to summon any witnesses or produce any document or thing in relation to the case as seen in Jethalal V. Khimji. 

In the case of P.N. Bhattacharjee V. Shri Kamal Bhattacharjee, 1994, the Gauhati High Court observed that the complainant was making extra efforts to order a summons to the witnesses and it was the duty of the Magistrate to order a summon to all witnesses before giving the order of dismissal just because the witnesses do not turn up. 

The Magistrate can also deny to examine witnesses whose names were not mentioned under the list provided by the prosecution initially by rejecting the application. However, a second application can be made to summon more witnesses other than the ones mentioned in the list and the Court is bound to issue summons to them as seen in Jamuna Rani vs S. Krishna Kumar, 1992.

Absence of complainant

Section 249 states that when the proceedings have been instituted upon complaint directly with the Magistrate, and the complainant is absent on the date and time of the proceedings set by the Magistrate; and the offence may be compoundable and non-cognizable, the Magistrate may at any time before the charges are framed against the accused, discharge him. It is the discretion of the Magistrate to discharge the accused or proceed with the case. But such a discharge is not considered judgement as observed in the case of Banta Singh V. Gurbux Singh, 1966. The accused cannot be discharged after the charges against him are framed despite the default of appearance by the complainant.

In course of trial, if the complainant dies, the Magistrate need not discharge the accused but rather continue the trial.

Examination of witnesses

The Magistrates examines the witnesses after summoning them to the Court. The law provides the accused to re-examine or cross-examine any witnesses produced by the prosecution after the charges against him are framed. However, this is not the same as an opportunity given for examination before the charges are framed. The witnesses are examined and the Magistrate collects testimonies and pieces of evidence and files them with the record based on their relevance to the case. The Magistrate may throw aside any baseless or irrelevant testimonies and pieces of evidence as he sees fit and orders the re-examination of any witness as seen necessary for the service of justice.

Record of evidence

All evidence brought before the court that holds relevance to the case and can link the accused to the offence committed beyond a reasonable doubt or any evidence which can get him acquitted is filed with the record by the Magistrate. Recorded evidence is secured away from parties that may be interested in tampering with them to gain the upper hand and prevent the application of justice.

Evidence for defence

The defence has the opportunity to present his side of the case and defend himself against the accusations of the prosecution, as mentioned under Section 247. A written statement may be put forwarded and the Magistrate shall record it. The accused can issue an application requesting the Magistrate to summon witnesses or the production of any document or thing with relevance to the case. And the Magistrate must issue such summons unless he feels they are baseless, irrelevant and done for the purpose of vexation and delay of the delivery of justice. The reasons for rejection of application must be recorded in writing by the Magistrate. Any witness that has already been cross-examined by the accused or had the opportunity to be cross-examined by the accused cannot be summoned again unless the Magistrate deems it necessary for the delivery of justice.

Conclusion of the trial

The trial can only end in either a conviction or acquittal of the accused. The decision of the Court with regards to the conviction or acquittal of an accused is known as judgement. If the accused is acquitted of the offence, the prosecution is given time and an opportunity to appeal the Court against the order of acquittal. If the accused is convicted after observing the evidence and judged to be guilty of committing the offence, both sides are given an opportunity to give arguments on punishment to be served. This can be often observed in conviction cases of life imprisonment or death penalty.

Judgement and connected matters

Judgement of acquittal or conviction

Section 248 states that once the decision is made after the Magistrate examines the evidence, the judgement is delivered. If the accused is not found guilty, an order of acquittal shall be recorded by the Magistrate under as stated under Section 248(1). If the accused is found guilty, the Magistrate after hearing the accused shall pass the sentence if he does not proceed in accordance with the provisions of Section 325 or Section 360. And this order of conviction shall be recorded as under Section 248(2).

Procedure in case of previous conviction

In a case where there is a previous conviction under the provisions of Section 211(7), and the accused does not admit that he has been convicted previously as alleged in the charge; the Magistrate may, after the conviction of accused shall collect evidence with respect to the alleged previous conviction and record that finding. However, no charge shall be read by the Magistrate, the accused shall not be asked to plead and the previous conviction shall not be referred to by the prosecution or adduced by it unless the accused has been convicted under Section 248(2).

Compensation for accusation without a reasonable cause

Section 250 discusses the procedure related to cases where a case is instituted on complaint to a magistrate or police officer and the Magistrate finds that there is no ground against the accused person. The accused shall be discharged immediately. The complainant shall be summoned to justify his complaint and explain why he should not pay compensation to the person against whom the complaint was made. The Magistrate shall then order to pay a particular amount of compensation not exceeding the amount of fine to the accused if he is satisfied that the reasons for filing the complaint are baseless and lacks ground.

If there is more than one accused person, the Magistrate shall order the complainant to pay compensation to all the accused. This can be observed in the case of Valli Mitha V. Unknown, 1919.

In the case of Abdur Rahim V. Syed Abu Mahomed Barkat Ali Shah, 1927, it was declared by the Court that the amount of compensation will only be paid to the accused and not his relatives or any other person.

Failure in payment of compensation amount by the complainant will result in simple imprisonment not exceeding 30 days. If the person is already in imprisonment then Section 68 and 69 of the Indian Penal Code will be applied. And a person who has been directed to pay compensation amount will be exempted from any criminal or civil liability in respect of the complaint. 

Section 250(6) states that a complainant or informant ordered by a Magistrate of second class to pay compensation exceeding one hundred rupees under Sub-section (2) can be appealed as seen in the case of A.M. Pereira vs D.P. Demello, 1924.

The compensation amount shall not be paid before the period of appeal lapses or after the decision of the appeal is given by the Court. And in cases where there is no relation to appeal, the amount will be paid after one month from the date the order was passed.

Conclusion

The Court decides if there is ground against the accusations of the complainant and the proceedings are initiated under the Magistrate’s discretion. Furthermore, we discussed that the evidence and witnesses presented by both the prosecution and defence are essential in determining the facts of the case and declare judgement. The judgement is taken by the Magistrate after both sides have presented their arguments. And if the accused is acquitted of the charges, the case is dismissed but the prosecution can file an appeal to challenge the decision of the court. But if the accused is convicted, both sides are allowed to present their arguments as to the extent of punishment which shall be inflicted on the convict. But the final decision as to the punishment lies with the Magistrate.

References

1. https://blog.ipleaders.in/difference-between-session-trial-and-warrant-trial/
2. https://blog.ipleaders.in/all-about-the-various-stages-of-criminal-trial-in-india/
3. https://www.lawnotes4u.in/2018/12/stage-of-criminal-trial-in-warrant-case.html
4. https://indiankanoon.org/doc/445276/
5. https://indiankanoon.org/doc/1953529/
6. https://indiankanoon.org/doc/1569253/

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

The post Trial of Warrant Cases by Magistrates Under Indian Contract Act, 1872 appeared first on iPleaders.

This article is written by M.Arjun, a 5th-year student studying in Government Law College, Thrissur. This article deals with the essential clauses in a Venue-Hire Agreement.

Introduction

A venue-hire agreement governs the general terms and conditions for booking an event at a particular venue. It is vital for the owner of a venue and the hirer to be clear about their rights and responsibilities in relation to the venue and the event concerned. A venue-hiring agreement ensures that there is no misunderstanding between the parties and no details are left unaddressed. Any ambiguities or complications can be detrimental to the interest of both parties. 

Nature of events varies greatly in their duration, purpose, and target audience. There can be private events such as marriages, birthday functions and public events such as musical concerts and award nights. No single agreement works perfectly for every kind of events. A venue-hire agreement should be catered in accordance with the nature of events. Hence it is important to understand the nature of the event before drafting a venue-hire agreement.  Despite the lack of general format, there are few standard clauses that a venue-hire agreement should incorporate. Let’s discuss some of these in detail.

Definition Clause 

The definition clause helps to set out a clear understanding of various terminologies used in connection with the contract so as to avoid any ambiguity or indirect interpretations. Therefore terms like venue, event, vendors, guests, contracting parties and so on are defined within the clause to make the agreement more transparent.

Price And Payment

A clause governing the payments to be made for booking a venue is one of the most important clauses in a venue-hire agreement. The agreement should be clear on the total payment to be made by the hirer. It should also mention the advance amount which the hirer is required to pay while booking the event. A security deposit is usually charged for covering the damages caused to the property when a venue is hired. Also, the provisions relating to the refundability of various payments made by the hirer should be clearly mentioned. The time period for which the hirer should make the payments, as well as the mode of payment, should be specified. At the same time, a provision regarding the interest laid for late payments or cancellation of the venue-hire agreement should be present to make it more beneficial for the owner of the venue, in cases where the hirer fails to pay the requisite amount on time. The time period is required to be present in the agreement, within which the owner has mandated the security deposit after the completion of the event.

The Hirer’s Use of Event Space

The agreement should always mention the purpose of the event. Stating such purpose avoids any room for misrepresentation of the event by the hirer. The venue-hire agreement should contain provisions that specify how the hirer can use the venue as per the directions of the owner or officers in charge. This clause can also be used to prohibit the hirer from using the event space, contrary to the directions of the owner. Some of the restrictions may include restrictions such as an entry into a particular space, the permissible level of sound from audio devices and loudspeakers, decor restrictions, usage of hazardous equipment and so on. 

Entry To The Event Space

The venue-hire agreement precisely refers to the time period for which the venue is available to the hirer. The duration, start time and end time for access to the event space should be provided to avoid ambiguities. The hirer may need time for making various preparations such as decoration, in relation to the event. So it is important that this clause provides the exact time from which the hirer can use the space. There may be instances in which the owner can enforce the hirer to specify the type of the audience attending the event and limitations imposed upon them. In such cases, it might be important to include the audience who can access the event. All areas and rooms within the venue for which the client has been granted access including the granted access time should be pointed out in the agreement. Vendors/Service providers of the hirer who are given access to the event space should be mentioned. The maximum number of audience permitted to access the event should also be included in the agreement. The hirer can also set out a provision for limiting the access for particular staff/employees of the owner. 

Deliverables

Deliverables include services like accommodation, electricity, furniture, generators and all other equipment and amenities. The agreement should have clear provisions as to mention the services provided by the owner for the price. All the inclusions and exclusions should be set out in detail. The owner of the venue may mandate the client to avail some of the services exclusively from him or from any accredited vendors. For instance, some owners do not allow third-party catering providers to provide food for the function at the venue. In such cases, the agreement should expressly provide all the services provided exclusively by the owner or other exclusive vendors designated by the owner. The time for delivery of the deliverables should also be mentioned clearly. It is always better to quantify or describe each of the services provided in detail such as the food menu, maximum units of electricity authorized to use or maximum hours of operation of the generator in an appendix to the end of the agreement.

Insurance

The Insurance clause sets out the types and limits of insurance policies the hirer must obtain in order to cover for the damages caused in relation to the event. The insurance policies cover in respect of losses incurred to the venue, employees or visitors from bodily injury or property damage. Venue owners may not provide their space if the hirer does not avail proper public liability insurance in his name for indemnifying the venue owner. An insurance policy also protects the hirer from losses arising due to the cancellation of an event or from the absence of a performer or a guest to the function. Hence the losses suffered by the venue owner and the hirer are covered under the policy. The insurance policy also helps the parties to avoid unnecessary litigation.

Cancellation and Postponement of the Event

The cancellation clause lays down the conditions by which the hirer can cancel his booking. The method, conditions for cancellation and the notice period for such cancellation should be agreed by the parties to the agreement. Cancellation fee which is to be realised from the hirer should be expressly provided to avoid complications. Cancellation fee depends on the size of the event. Queries such as whether the cancellation fee applies if the venue is rebooked after cancellation, should be dealt with in the agreement. The owner of the venue can also lay down certain conditions by which he reserves the right for cancelling the event at times when the hirer has not complied with such conditions. Provisions regarding postponement, change in times of the event and amendments made to the event such as extending the time period of booking should be dealt with in the clause. Additional payments incurred during these circumstances should be addressed accordingly. A notice period within which the hirer should request a cancellation or postponement of the event should be agreed upon by the parties.

Responsibilities of the Hirer

The venue owner expects his client to fulfil various responsibilities throughout the event. This clause includes detailed provisions regarding safety, health, security and other code of conduct in connection with the owner’s premises, equipment and his employees. All the attendees and third-party vendors of the hirer are also expected to act in accordance with the obligations agreed by the hirer. Besides, the responsibility for complying with statutory obligations for conducting the event shall be passed on to the hirer in the agreement. 

Indemnity and Limitation of Liability

The indemnity clause indemnifies the owner from all the damages caused to any personnel or property managed by the owner. The hirer shall be liable for all the physical damages, legal expenses and loss of reputation caused to the owner in relation to the use of the venue by the hirer. On the other hand, the owner should indemnify the hirer for all his losses caused to him due to non-delivery of deliverables or negligence from the part of the owner. The limitation of liability clause limits the liability of the owner during instances such as theft, death, injury, physical damage caused to the property or guests of the hirer except in cases of negligence by the owner. The owner can also provide a provision for limiting his liability when the cancellation arises due to a breach of duty on the part of the hirer.  

Miscellaneous Provisions 

As mentioned earlier, it is very difficult to draft a venue-hire agreement which is adequate for various kinds of events. The clauses for a business conference very much differ from a musical concert. Hence there are various clauses which should be added to the agreement consonantly with the nature of the event. Considering the nature of the event, there can be separate clauses for: 

• Cleaning/rubbish removal
• Decorations
• Parking
• Catering
• Smoking and usage of alcohol
• Broadcasting the event
• Advertising/publicizing the event

Governing Law And Dispute Resolution

The venue-hire agreement should provide a clause regarding the governing law and jurisdiction according to which the provisions of the agreement are construed or interpreted. The procedure for dispute resolution should be laid out in the agreement. For instance, if the parties agree to arbitration for settling disputes, it should mention whether the arbitration shall be before a sole arbitrator or else wise. The parties should also agree upon a governing law and appropriate jurisdiction for dispute resolution.

Common Pitfalls In Drafting a Venue Hiring Agreement

A venue-hire agreement should serve the needs of both the hirer as well as the owner of the venue. These agreements are catered considering the changing nature of the events. The wording, clauses length of these agreements differ greatly. 

When Venue-Hire agreements are small they may not serve the purpose

For instance, a very short venue-hire agreement looks like this. Here the agreement focuses too much on matters related to payment whereas it is silent on various provisions such as cancellation policy, deliverables included in the price, provisions relating to outside vendors/suppliers and so on. Not furnishing adequate details leads to uncertainty between the clients.

Where there is a substantial influence on the interests of the owner

On the other hand, here is a much detailed venue-hire agreement. The agreement stresses more on the rights of the owner and the obligations of the hirer. It misses out key clauses such as provisions for complaint and dispute resolution mechanism. The hirer is made to indemnify the owner and his property under every possible scenario thereby omitting the responsibilities of the owner. 

When the hirer’s rights are not expressed in detail

A venue-hire agreement is mostly drafted in favour of the owner. Hirer’s right such as timely delivery of deliverables, repayment of the security deposit by the owner, duties of the owner are not usually addressed in the agreement.

Conclusion

Therefore, the venue-hire agreement should be drafted in such a way that it provides sufficient details regarding the scope of the event, payments, liability of the parties  and so on. It should lay down the rights and obligations of both parties without any discrimination. A musical concert involves a large amount of advertising, publicity and brand sponsorships. Drafting a venue-hiring agreement for a musical concert in a similar fashion as to a private function such as a retirement party can be an absurd idea. Hence, the nature of the event should be considered thoughtfully before drafting the agreement. Not entering into a venue-hiring agreement can be a bad idea, especially when the event and the cost involved in hiring the event space, is substantially of high value. There can be several disputes arising at such instances such as disputes related to non-payment of the amount, cancellation related disputes, disputes concerning delivery of deliverables, liabilities of the parties and improper use of event space. As a consequence, is always a good idea to enter into a venue-hire agreement before booking a venue for any sort of event, be it big or small or private or public.

References

1. https://www.printablecontracts.com/Venue_Hire_Agreement.php
2. https://www.jcu.edu.au/__data/assets/pdf_file/0015/120417/Hire-Agreement-Form.pdf
3. http://crownpavilion.com/wp-content/uploads/2017/08/Event-Venue-Hire-Agreement.pdf
4. https://www.newcastle.edu.au/__data/assets/pdf_file/0010/473563/Venue-Hire-Agreement-2018-Terms-and-Conditions.pdf

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

The post Essentials Of A Venue-Hire Agreement appeared first on iPleaders.

This article is written by M.Arjun, a 5th-year student studying in Government Law College, Thrissur. The article deals with what YouTubers should know about YouTube’s Copyright Policy.

Introduction

With more than 31 million active channels and technically being the world’s second-largest search engine, YouTube has become a lucrative career for content creators. Back in its initial days, Youtube as a video-based platform was not monetized. The acquisition of YouTube by Google and Google’s acquisition of ad management solution DoubleClick, enabled YouTube to run advertisements, thereby generating revenue for the company as well as the community. The monetization fueled the growth of youtube empowering it to be one of the present-day giants of the ever-growing digital media industry.

The biggest strength of YouTube is that it is open and accessible for the masses. Around 500 hours of video are being uploaded to the platform every minute. YouTube has become the go-to option for video consumption on the internet for over 2.5 billion monthly users throughout the globe. YouTube’s monetary rewards have attracted a large number of audience towards the platform. Various malpractices for triggering income from YouTube such as copyright infringements, duplication and reuse of original content became frequent. These practices drastically impact the monetary benefits of the original content creators. Hence, YouTube treats copyright as an important issue and has developed a detailed copyright policy to tackle the issues relating to it.

YouTube’s Copyright Policy

Youtube takes copyright infringement seriously and a video alleged to be infringing the copyright of the original owner is normally blocked or taken down. If a person uploads a video created by someone else, then he is said to have committed a copyright infringement if he has uploaded the video without valid permission or license for the same. YouTube does not permit any user to use the content of the right owner even if they do not have any monetary interest in copying the content. Even copying a very minute portion of a youtube video is considered as an infringement.

A video uploaded to youtube is taken down or blocked for 2 reasons:

• When there is a takedown notice against the video; and
• When there is a content-id mismatch.

Takedown Notice

When a copyright owner feels that an infringer has uploaded his content on YouTube, he can file a takedown notice through the platform. A takedown notice is a formal notice governed by the principles of law. YouTube reviews the notice and takes down the content if it is satisfied that the infringer has breached the rights of the owner. A person filing the takedown notice has to be sure about his rights as he is initiating legal action against the opposite party.

Content Id Mismatch

While filing takedown notice is a legal action, Youtube has developed a unique copyright enforcement tool called a “Content Id”. YouTube grants a content-id for videos exclusively to the copyright owners. Whenever a video is uploaded to youtube, youtube algorithm scans whether the audio or video uploaded matches with millions of those uploaded to the platform. When it finds a match, youtube by itself files a copyright claim for the owner, liberating the owner to take action by himself. When there is a content-id mismatch the owner of the video has 3 options:

1. To block the video.
2. To monetize the video- The owner gets more ad traffic for his infringed video which generates more revenue for the owner. The copied content does not receive any monetary gain but the video remains on the platform.
3. The owner gets viewer data to get the detailed information regarding the video such as the country or area within which the video has received good popularity.

Content id allows the users on the platform to create modification works and funny videos from the original content without hurting the interest of the right owners. The main aim of the content id is to minimize takedown notices. However, the owner is always at the option to block the video or to select a more rewarding option without blocking the usage of the video by the other party. In 2018 a news report, YouTube’s chief business officer Robert Kyncl said that in more than 90% of Content ID cases, copyright holders opt to collect revenue. Youtube has paid out billions of dollars to the content owners when there is a content-id mismatch. This is to ensure that more users and videos remain with the platform. The news report also claims that 98% of the copyright issues in youtube is addressed through the content id mechanism.

In July 2018, YouTube introduced a tool called “Copyright Match” tool which is a shortened version of the Content ID system. The tool is available to the channels with more than 100,000 subscribers. It helps these channels by preventing the infringers from downloading their videos and re-uploading it to a different channel for monetary gains.

Laws Governing the Policy

YouTube’s takedown policy is based on the provisions incorporated under the Digital Millennium Copyright Act 1998. It forms the basis of youtube’s copyright strike mechanism. YouTube has to comply with DMCA to avail its “Safe Harbor Protection”. Safe Harbor Protection protects online service providers such as YouTube from copyright liability for innocent hosting infringed content in its own platform. Hence, youtube is bound to act as per the DMCA for any copyright claims through a takedown and notice process. When youtube receives a DMCA takedown notice it takes the alleged video immediately.

Why Should YouTubers Understand The Policy?

Most of the content creators in youtube are motivated to create content for the reason that it generates decent revenue for the YouTubers. For this purpose, a channel has to enable monetization and the video uploaded should be as per the “Advertiser Friendly Guidelines” prescribed by youtube.

The primary source of income through youtube comes through running advertisements in the video. A channel becomes more exposed to advertisements when the popularity of content increases. So, when a content created by a party is reused or re-uploaded by another party, the content gets duplicated and the owner of the video loses revenue. Hence a YouTuber should always be well versed with YouTube’s copyright policy along with the procedures governing copyright strike down and content-id mismatch.

YouTubers whose rights are violated should know how to file takedown notices for taking down the infringing video. Those who are notified with a copyright strike down notice, should be aware of their remedies such as filing a counter-notice under the DMCA.

A video purported to match with the content of a subsisting video is either blocked or loses its capability to generate monetary gains for the creator. On the other hand, YouTubers should also be conscious of their rights such as disputing a content-id match.

Success as a Youtuber greatly depends on the viewership of his videos. If his content is being reused or duplicated, the viewership gets segregated. There were instances were youtube had to take down a modified video as it got more views than the original one. Also, YouTube pays out revenue to the infringer until a claim is made by the original owner. It is not conducive for the content owner to claim the profits made by the infringer before the copyright claim is made. Timely action in cases of copyright claims helps to tackle this issue, thereby generating more views for the content created by the owner.

What To Do When Someone Copies Your Content?

When YouTube’s content-id system does not recognize the copying of original content, a YouTuber can report the same. Things such as channel art, video description, the portion of a video or the full video can be reported to the platform.

Step 1: Click on report option found under the video that is alleged to be infringing your right and select the option “Infringes My Rights” and then click on “Infringes My Copyrights”.

Step 2: Once you are sure that you hold the rights for the content and if the usage of the content does not come under the fair dealing or fair use, a copyright takedown notice can be made by filling a webform provided by the platform. Click on the “Submit Copyright Complaint” option.

Step 3: You will have to specify the party affected by copyright infringement and paste the URLs of the infringing video and original video. Youtube provides an option to add multiple videos if more than one of your videos are found to be copied.

Step 4: To make a complaint under the DMCA, you will have to enter a few personal details such as your legal name, address, email id, phone numbers and so on. A declaration has to be made stating that the notice made is:

• Accurate.
• In good faith.
• The party is aware of the legal ramifications in case of a false notification.
• Complainant is the owner or authorized agent who can act upon the infringement of such exclusive right.
• Use of the content is not authorized by the copyright owner.

Step 5: Youtube will send you a mail regarding the confirmation of the takedown request and shall also notify the opposite party about the complaint filed against him. 

Filing a takedown notice is initiating a legal proceeding against the opposite party under the DMCA. Hence the person submitting such complaint should always keep in mind that a false allegation can result in the suspension/termination of his youtube account and he may be liable for other legal consequences as well. In cases where the copyright owner finds that he had misidentified the content or had submitted an infringement notification by mistake, youtube provides an option for retracting such notification. YouTube provides a procedure for retracting such complainants. A creator affected by such notification can request the complainant directly to make a retraction.

What Happens When A Video Is Taken Down?

When a video has been taken down as a result of a legal notice filed by the owner of the content its termed as a “copyright strike”. YouTube takes down such videos on the request of the owner for complying with the copyright laws such as the DMCA. When the creator gets a copyright strike for the first time, it acts as a warning and the person is taken to youtube’s “Copyright School” wherein the creator has to watch some videos and answer some questions on the copyright policy followed at youtube. When an account is subjected to a copyright strike, it loses the ability to monetize the content. Details of the copyright strikes can be accessed from the “YouTube Studio” application or website.

When your channel gets 3 copyright strikes:

• Your account, along with any associated channels, is subject to termination.
• All the videos uploaded to your account will be removed.
• You can’t create new channels.

A copyright strike can be resolved by:

• Filing a counter-notice if the video was taken down mistakenly or if the use of the content comes under fair use or fair dealing.
• Asking the complainant to retract their copyright infringement notice.
• After the expiry of 90 days.

What To Do When A Video Is Removed For Copyright Infringement?

When a video is removed for copyright infringement, the creator of such video usually has 2 remedies:

1. 1. Filing A Counter-Notice in reply to a takedown notice filed under the DMCA; When a copyright owner files a takedown notice for uploading a video without his authorization, youtube takes down the video. However, the opposite party can file a counter-notification for reinstating the removed video. A counter-notification can be filed only when the party is sure that his use of the content comes under the fair use policy or if there is a misidentification of content by the copyright owner. If the video is removed for other reasons, the opposite party has to wait until the expiry of the copyright strike. YouTube reviews the counter-notification and evaluates the ground by which the creator has contested against the takedown notice. After which, the counter-notification is forwarded to the claimant. The claimant within 10 days, has to provide the evidence of initiating a legal action to keep the content down. A counter-notification can be filed by logging in the “YouTube Studio” feature. Users whose account has been suspended can file a free-form counter-notification. 
   2. Disputing a Content-id claim: A content creator whose video has been found to be matching with existing content can dispute such claim:

• If the content was misidentified 
• if the creator has valid authorization or licenses to use such content.
• If the usage comes under fair use or fair dealing
• If it is your original content.

When a content-id dispute is filed, the copyright owner gets a 30 day time period to respond. If the copyright owner fails to reply within 30 days, the claim expires on its own. The copyright owner can:

• Release the claim: If they agree with your dispute, they can release their claim. If you were previously monetizing the video, your monetization settings will be restored automatically when all claims on your video are released.
• Uphold the claim: If they believe their claim is still valid, they can uphold it. If you feel it was mistakenly upheld, you may be able to appeal their decision.
• Takedown your video: They can submit a copyright takedown request, which means you’ll get a copyright strike on your account. A counter-notification can be filed at such instances.

When a content-id dispute is initiated, the monetization of the content is withheld and it is distributed later to the appropriate party.

Provisions For Fair Use

Fair use allows a creator to reuse the content created by the copyright owner without his permission. Fair use is applicable only on certain circumstances and the provisions for fair use or fair dealing aren’t determined by Youtube. Content creators have to be careful while using the content belonging to the copyright owner. Youtube’s content id system may not recognize fair use since it is a relative concept. Using a small portion of the content, using the same with disclaimers or usage without monetary intentions does not mitigate the risk of copyright infringement. Hence, there is always a risk in using copyrighted material in the name of fair use. Fair use differs from country to country and is decided by a Court of Law. Commentaries, criticism and research are normally accepted as fair use in the United States. US courts consider factors like the quantum of the content copied, the scope of the reused content, and impact on monetary gains of original content for determining fair use. Youtube has introduced various features that allow claimants to specify timestamps of infringements while making fair use claims.  It provides tools for easy removal of claimed music or content and to swap it with copyright free content from “YouTube’s Audio Library”.  

Conclusion

From September 2019, YouTube shut the option for music companies to make manual claims. YouTube, in a blog post, announced the changes in its manual claim policies to prevent music companies from stealing the revenue of content creators in youtube. The platform considers music companies to be using the manual claiming option in an unfair and aggressive manner. The manual claiming policy is different from its content-id system in such a way that the copyright owner themselves identify the infringement instead of relying on youtube’s automated tool. Music companies were said to be looting the revenue of creators even when the music is played unintentionally for a second. For eg, a blogger who is making a live recording walks past a store that plays a copyrighted song loses all his revenue to the music owners. To tackle this issue, Youtube has made it compulsory for claimants to add timestamps for pointing out the infringement while making complaints. Content creators are given the option to trim out such portion from their videos and add copyright-free content from “YouTube’s Audio Library”. They can now monetize the video after removing such portions. Copyright holders can now only prevent the creators from monetizing the video or block the content. The ability of the copyright holders to monetize the infringing video is now minimized.

References

1. https://www.youtube.com/intl/en-GB/about/copyright/#support-and-troubleshooting
2. https://support.google.com/youtube/answer/2797449?hl=en
3. https://www.dummies.com/business/marketing/social-media-marketing/10-things-to-know-about-copyright-and-youtube
4. https://www.tubefilter.com/2018/11/07/youtube-payouts-content-id/
5. https://www.theverge.com/2019/8/15/20806189/youtube-manual-music-copyright-claim-update-more-blocked-videos

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

The post What Youtubers Should Know About Youtube’s Copyright Policy? appeared first on iPleaders.

The article is written by Ayush Verma, a student of Ram Manohar Lohiya National Law University, Lucknow.

Dispute resolution is the process of resolving disputes between the parties. It is one of the most widely practised areas in the field of law. It has become a tool to resolve disputes between the disagreeing parties in the Courts.

There are two dominant methods by which disputes are settled in law firms. They are:

1. Litigation
2. Arbitration

In litigation, issues are presented before a court, comprising of a judge or jury, who give their ruling on the issues. And, in Arbitration, dispute between the parties is settled by a neutral third party, called an arbitrator. Based on the pieces of evidence, arbitrator or arbitrators decide the matter.

The article has been written after taking into account the rankings of given firms on different websites and recent awards given to the firms, working in the field of dispute resolution. After assessing the data, a list of firms is taken which can be said to be top law firms in the country in the field of dispute resolution. Though the list is only suggestive, it would be of great help to the students who want to intern in the top dispute resolution firms, and young lawyers who are finding good dispute resolution firms to work into.

Cyril Amarchand Mangaldas

The firm started in 2015 after separating from its parent firm Amarchand Mangaldas & Suresh & Shroff Company. It is one of the most prestigious firms in India. It has over 750 lawyers, including 130 partners and its offices are located in Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai and Ahmedabad.

The firm is highly experienced in providing successful strategies for resolving conflict situations and disputes of its clients. It provides legal help not only in litigation but also by alternative dispute settlement methods like arbitration, mediation and conciliation.

The firm handles domestic as well as international commercial cases before all courts, tribunals and forums including:

• Joint Venture related disputes
• Rights of the shareholders
• Transaction related to Real Estate
• Tax-related matters
• Competition related matters
• Commercial and infrastructure contracts
• Matters relating to Company Law
• Regulatory matters
• Securities law matters

Key Clients

The firm has represented the Board of Control for Cricket in India with Herbert Smith Freehills in a matter relating to the arbitration over the damage claim of $62.9 million initiated by the Pakistan Cricket Board before the Dispute Resolution Committee of the International Cricket Council. Here the petitioner had alleged the breach of a letter from the client in 2014 tour to Pakistan that did not take place.

Contact details of the firm can be accessed here.

AZB and Partners

The firm was founded in 2004 by Zia Mody along with Bahram Vakil and Ajay Bahl. It has 500+ professionals and its offices are located in Delhi, Bangalore and Mumbai.

The firm has dealt extensively in the resolution of civil, criminal, commercial and constitutional law disputes through litigation in the Supreme Court, High Courts and several other courts and tribunals. It conducts arbitration, mediation and negotiation for its clients within and outside India.

Key Clients

It has represented Reserve Bank of India against Internet and Mobile Association of India where the Bank issued a circular prohibiting banks from either dealing in virtual currencies or providing other services facilitating entities in dealing with the currencies.

It has represented Nissan Motors in an arbitration case against the Indian government under the India-Japan comprehensive economic partnership agreement for claiming the damages and the unpaid valued added tax refunds which were promised by the Tamil Nadu government when Nissan Motors set up a manufacturing plant with Renault in Oragadam near Chennai in 2010.

Other notable clients include ASF-Keystone, Actis, BSES Rajdhani Power, BSES Yamuna Power, ETA Star Holdings, KKR India Asset, IHH Healthcare and Tokheim India etc.

Contact details are given here.

Shardul Amarchand Mangaldas

The firm was founded in 2015 and is headed by Shardul Shroff as the executive chairman of the firm along with Pallavi Shroff as the managing partner. The firm has over 600 lawyers including 110 partners and its offices are located in New Delhi, Gurgaon, Mumbai Ahmedabad, Bangalore, Chennai and Kolkata.

The firm deals in domestic and international arbitrations, commercial & corporate and regulatory disputes in various courts, tribunals, forums, administrative authorities & regulators in India.

Key Clients

It has represented Tata Communications in filing a writ petition for challenging an award passed by the land acquisition collector in the acquisition of land that belonged to the client at Greater Kailash Enclave for construction of a metro station as part of the project of Delhi Metro Rail Corporation.

It has also represented the National Dairy Development Board and an executive director in filing Public Interest Litigation challenging the director’s appointment that he did not complete a minimum of three years’ service on the date of appointment, which was in violation of an office memorandum of the government.

Other notable clients include Channel Vas Services India, Reebok International, Sterlite Technologies, Tata Sons and Thiess Minecs India etc.

Contact details are given here.

Karanjawala & Co.

The firm was founded by Raian Karanjawala and its managing partner, Manik Karanjawala. Its offices are located in Delhi. The firm is well experienced in dealing with dispute resolution matters across different sectors.

Key Clients

It has represented Star India in the writ petition challenging the Telecom Regulatory Authority of India’s new regulations that fixed the price of TV channels and the price of the content.

It has also represented Adani Enterprises in a dispute over the Chhendipada coal block at the approximate amount of $73.8 million.

Other notable clients include Air Asia International, Go Air, HT Media, Piramal Enterprises, Tata Motors and Tata Singapore Airlines etc.

Contact details are given here.

Agarwal Law Associates

It was established in 1968 by its senior most member Mr. EC Agarwal. It comprises of 7 partners and 21 associates and its offices are located in Delhi.

Key Clients

The firm represented Essar Oil before an International Tribunal against UII (backed by International Re-insurers) wherein Essar Oil was seeking an advance loss of profit claim for the delay caused by a cyclone in construction of its refinery project in Gujarat.

Contact details are given here.

Khaitan & Co.

The firm was founded by Late Debi Prasad in 1911 with the assistance of his brothers Mr. Lakshmi Prasad Khaitan and Bhagwati Prasad Khaitan. It has over 530 lawyers including 115 partners and directors and its offices are located in Mumbai, Delhi, Kolkata and Bangalore.

It offers services across litigation, arbitration, regulatory and pre-disputes advisory assignments. It also offers advice to its clients on matters relating to complex domestic and international commercial arbitration such as pre-arbitration strategy, settlement discussions, representation during arbitral proceedings and recognition and enforcement of awards or challenges.

Key Clients

It has represented Cement Manufacturers’ Association, Ambuja Cements, DCM Shriram, Graphite India and HEG in seeking immunity from the ban on the use and import of petroleum coke in India, which would have led to the shutdown of calcium carbide and graphite electrode manufacturing industries and severely affected the cement industries as well.

It has also represented a Japanese joint venture partner in securing its investment in the joint venture company which could not be completed due to disputes among the joint venture partner in international commercial arbitration and before the National Company Law Tribunal.

Other notable clients include Essar Oilfields Services, GX Technology Corporation, IVL Dhunseri Petrochem Industries and Voestalpine Schienen etc.

Contact details are given here.

Bharucha and partners

It was founded in March 2008. It has over 10 partners and 70 associates and its offices are located in Delhi, Mumbai and Bangalore. 

It has gained wide recognition for its arbitration experience. The firm’s senior partner MP Barucha handles the firm’s dispute resolution practice and has made a mark for his arbitration expertise. The lateral hire of Karthik Somasundaram has added to the firm’s expertise in this area.

Key Clients

It has advised Idea Cellular when it merged with Vodafone in its $23 billion deal, and again when it merged its shareholdings with Indus Towers into Bharti Infratel to create $14.6 billion entity.

Contact details are given here.

Luthra and Luthra Partners Law Offices

It was established in 1990 by its founder and managing partner Rajiv Luthra, who runs the firm along with Mohit Saraf, who is a senior partner of the firm. Its offices are located in Delhi, Mumbai, Bangalore and Hyderabad. It comprises 350 counsels including 78 partners. 

Its dispute resolution practices are one of the largest in India covering numerous sectors in representational and advisory legal services by guiding its clients, individuals and companies, on disputes relating to:

• litigation or arbitration;
• appearances in court and tribunals;
• selection and management of experts; 
• development and execution of strategy; and
• conduct of hearings and settlement negotiations.

Key Clients

It represented the International Air Transport Association in the filing of consumer complaints against the United India Insurance Company which failed to process the loss claims based on its insurance policy before the National Consumer Disputes Redressal.

Other notable clients include Protection Insurance and Regency Creations etc.

Contact details are given here.

J. Sagar Associates

The firm was founded in 1991 by Jyoti Sagar, and was later joined by Berjis Desai on April 1, 2003, by starting its Mumbai office. It has over 300+ lawyers and its offices are located in Ahmedabad, Bangalore, Chennai, Gurgaon, Hyderabad, Mumbai and New Delhi.

The firm has around 30 partners and 100 litigators working in the field of multi-jurisdictional and multi-disciplinary dispute resolution. It has dedicated practice groups for managing disputes in the areas of regulatory & policy disputes, telecommunications, securities law, taxation and competition law.

Key Clients

It has successfully represented the Association of Power Producers, Rattan India, GVK, GMR Group and Coastal Energen in the challenge against the 12th February circular of Reserve bank of India on stressed assets as arbitrary and ultra vires of Article 14 and the Banking Regulation Act.

Other notable clients include Louis Dreyfus Armateurs, SAP India and West Bengal Industrial Development Corporation etc.

Contact details are given here.

Economic Laws Practice (ELP)

The firm was set up in 2001 by eminent lawyers from diverse fields. It has 200+ professionals with 54 partners and its offices are located in Delhi, Mumbai, Pune, Ahmedabad, Bangalore and Chennai.

It has been consistently recognised as a leading Dispute Resolution firm in the country. It deals in disputes across all domains including corporate disputes, commercial disputes, regulatory disputes, tax disputes, domestic and international arbitration and white collar crimes.

It has represented GE India Industrial in the pending customs duty litigation proceedings before various courts and tribunals in India including the Supreme Court and Customs Excise and Service Tax Appellate Tribunal.

Key Clients

It has represented Multiplex Association of India in a dispute against the Karnataka government where the government imposed a uniform price cap of Rs 200 on all films displayed in cinemas in Karnataka. Here the client challenged the price cap since the government, especially the Kannada Cultural and Information Department does not have the power for regulating or restricting prices that are charged by private entities.

Other notable clients include Heligo Charters, Larsen & Toubro Sapura Shipping and Meridian Shipping Agency etc.

Contact details are given here.

Trilegal

The firm was founded in 2000. It has over 300 lawyers and 40 partners and its offices are located in Delhi, Mumbai, Bangalore and Gurgaon.

It has rich experience in settling disputes related to cross border financial and investment disputes before various courts and tribunals. It handles a wide variety of corporate-commercial and regulatory disputes in diverse sectors.

Key Clients

It has represented TerraForm Global Inc. and its Indian subsidiaries in a London seated ICC governed arbitration with Wind World (India) Limited in a dispute concerning operation and maintenance of wind power projects in India.

It has also represented Mitsubishi Hitachi Power Systems, Ltd. (MHPS) and other MHPS entities before the Madras HC in disputes arising under the terms of certain joint venture agreements. The primary allegation against the MHPS entities was that they had induced the breach of non-compete obligations under these joint venture agreements. 

Other notable clients include General Motors, Tata Communications, Abu Dhabi National Energy Co. PJSC (TAQA), AugustaWestland and Telenor ASA etc.

Contact details are given here.

Kachwaha & Partners

It is a full service law firm with its offices in Delhi and Mumbai. It is emerging as a leading firm in the area of Dispute Resolution. 

Its practice areas include wide arrays of litigation and arbitration matters, focusing particularly on cross-border work, including acting for large multinational corporations before the ICC. Other areas of focus include general commercial, construction and infrastructure disputes. Its managing partner, Sumeet Kachwha, is a leading individual in dispute resolution and is ranked as one of the top lawyers in India.

Key Clients

It successfully represented Korean conglomerate Daelim in Delhi High Court which enforced an earlier ICC arbitral award of $197 million in the client’s favour.

Contact details are given here.

Nisith Desai Associates

It was established in 1989. Its offices are located in New Delhi, Mumbai, USA (Silicon Valley), Singapore and Bangalore.

It specialises in cross-border work, particularly international arbitrations. It also offers expertise in investment treaty issues as part of the wider dispute resolution practice.

Key Clients

It represented Navigator Capital Advisors in complex arbitration and litigation proceedings, started by Business India Exhibitions and concerning a dispute between the parties on provisions relating to share subscription and debenture share subscription agreements concluded in 2007.

Other notable clients include Enercon Technologies, Fortissimo Capital and Multisphere Power Solutions etc.

Contact details are given here.

If you want to know about the best tax law firms in India, you can see here.

References

• https://www.legal500.com/c/india/dispute-resolution
• https://www.leadersleague.com/en/rankings/litigation-arbitration-international-arbitration-ranking-2019-law-firm-india
• https://www.leadersleague.com/en/rankings/litigation-arbitration-commercial-litigation-ranking-2019-law-firm-india
• https://chambers.com/guide/asia-pacific?publicationTypeId=8&practiceAreaId=467&subsectionTypeId=1&locationId=110
• https://www.asialaw.com/countries/india/in
• http://chamberpractice.com/recommended/recommend.htm
• https://www.vantageasia.com/india-top-law-firms-2019/

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

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This article is written by Tanya Gupta, a 2nd-year law student, from BVP-New Law College, Pune. In this article, the author has discussed the concept of “Free Consent and Undue Influence”.

Introduction

Section 13 of the Indian Contract Act (ICA) defines consent as the meeting of mind of the parties i.e consensus ad idem (when two or more persons agree upon the same things in the same sense). Section 14 further qualifies consent is said to be free if the parties enter into a contract with free will, that means with no pressure and not caused by any of the following:  

1. Coercion (Section 15),
2. Undue influence (Section 16),
3. Fraud (Section 17),
4. Misrepresentation (Section 18),
5. Mistake (section 20 to 22). 

When there is no consent at all the contract is said to be Void Ab Initio.

Definition (S16) of The Indian Contract Act

Undue Influence is defined under Section 16 of the Indian Contract Act. When one party is in a position to dominate the will of others and actually misuses the power, then it is a case of undue influence, and the contract becomes voidable. When all the following three conditions are fulfilled then only the situation is considered as an undue influence:

1. One person is in a position to dominate the will of others.
2. He misuses his position.
3. He obtains an unfair advantage.

The word undue means unnecessary, unwarranted, or more than required. Influence means convincing the mind of a counterparty through changing his mind or changing his will, but this influence must be undue i.e it is not required. Undue influence applies to a relationship which may be blood relation or some other kind of relation i.e fiduciary or relation based on trust. It means the unfair use of one’s superior position to obtain the consent of a person who is in a weak position. For example, A police officer bought a property worth Rs 1 lakh for Rs 5000 from Ram, an accused under his custody. Later this contract can be cancelled and it can be held as void because there is a mental pressure on a person.

Ability to dominate the will of other

The dominant position is not defined in the Indian Contract Act but Section 16(2) provides certain conditions when a person is in a position to dominate the will of another. Cases, where a person is in a position to dominate the will of others, are as follows:

1. There must be a relation between the parties:

a) Real or apparent authority/relation in which one party can be dominated by the other party. For example, father and son, mother and daughter.

b) Fiduciary relation is the relation which is made upon the belief and trust between the parties. One party must believe the other. For example, Advocate and client, teacher and student, Doctor and patient.

Example of real or apparent authority:

• A Father exerts undue influence upon his son to do something on the will of his father.  Otherwise, he will part his relation with a son.
• A factory owner exerts undue influence upon his employee to make a certain agreement with him. If not he (employee) will be drawn from his job.

Example of fiduciary relation: 

• An advocate asks his client to give him extra money to fight the case from his side.

2. Mental or bodily distress means the mental capacity of a person is affected. It can be either permanently or temporarily affected. The reason behind such health condition can be age, illness, mental or bodily distress.

Consent under pressure

Consent under pressure means when consent is obtained forcefully. In this manner, consent is not lawful, so it had no binding effect.

Subtle species of fraud

Undue influence is said to be subtle species of fraud due to which a party controls the mind of the victim by his clever skills and with gradual proceedings but with very harmful effects. Sometimes the contract is signed due to fear, coercion, importunity or other domination. It was observed by the Privy Council in Someshwar Dutt vs Tribhawan Dutt that acts of undue influence range themselves under the heads of coercion or fraud. Generally, undue influence is often confused with coercion or duress. Duress occurs when there is a physical compulsion or direct force upon a person or there is a threat to a person’s life. In contrast to duress, undue influence may exist with or without force or threat to a person’s life.  For example, ‘A’ advances a sum of money to his son ‘B’ in his age of minority and through his parental influence over his son make him sign a bond of a greater amount of a sum due in respect of the advance. A used undue influence in this case as there is a fiduciary relationship between father and son as there is natural confidence between both which A abuses by making his son sign a bond. 

Relations which involves domination

All cases where there is an active trust and confidence between the parties and both parties are not on equal footing. The principle of undue influence applies to all the cases where influence is acquired and abused. It applies to all relations where domination can be exercised by one party over another. i.e where exists a real or apparent authority or fiduciary relationship. In the category of undue influence, the circumstances under which the contract was made is taken in the account along with their relationships. The existence of a dominating position along with its use is mandatory to invoke an action. Merely a dominant position does not lead to undue influence. It arises only when this position is used for gaining an undue advantage. Undue advantage means any kind of advantage which is not warranted by circumstances in which the contract was entered. In the case of Ganesh Narayan Nagarkar Vs Vishnu Ramchandra Saraf, it was stated by the court that unfair advantage is the advantage or enrichment which is obtained through unjust means. It comes into existence when bargains favour a person who enjoys influence and which proves unfair to others.

Real or Apparent authority

Section 16(2) of the Indian Contract Act states that Undue Influence can arise wherever the donee stands in a fiduciary relationship to the donor or holds a real or apparent authority. In this type of influence, there is a real authority like a police officer or an employer who uses his dominance for his enrichment. Apparent authority is pretending as a real authority without its existence.

Mental distress

An only mental distress state of mind does not amount to undue influence until the defendant has used this opportunity to take unfair advantage from another party. Similarly, instigating a person to enter into a contract who has just attained majority amounts to undue influence under this category due to a lack of the plaintiff ‘s experience. In the case of Inder Singh Vs Dayal Singh, the court states that the undue influence arises when one party taking the temporary or permanent advantage of another’s mental condition executes a contract. For example, A entered a contract with B, who is a minor and is unable to understand the complex terms of a contract. It will amount to undue influence unless A proves that the contract was entered in good faith and with adequate consideration of B. A case of undue influence is established more easily when there is evidence to establish to show that the person influenced was of feeble mental capacity or in a weak state of health.

Burden of proof

Generally, the party bringing a claim has the burden to prove the truth of the facts on which he or she is relying. The burden of proof is on the claimant to show that undue influence was exerted by a stronger party over the weaker party, and the latter could not exercise free choice when entering the agreement. However, this burden can be shifted to the defendant in an undue influence case if the plaintiff can demonstrate that a confidential relationship existed between the testator and defendant, and that suspicious circumstance surrounded the preparation and execution of the will. When this occurs, the burden shifts totally on the defendant to prove that undue influence did not occur. When a person is found to be in a position by which he can dominate the will of the other or a transaction appears to be affected due to dominance, the burden of proof that no undue influence was exercised in the transaction lies on the party who is in a position to dominate the will of others. In the case of Diala Ram Vs Sarga, the defendant was already indebted to the plaintiff, who was village moneylender. He again took a fresh loan from a plaintiff and then executed a bond, wherein he agreed to pay some interest. The court held that the contract was unconscionable and therefore, the burden of proof was on the plaintiff to show that there was no undue influence in this case. The burden of proving that the contract was not induced by undue influence is to lie upon the person who was in the position to dominate the will of others if the transaction appears to be unconscionable.

Presumption of undue influence

There are some cases in which the Honourable Courts of India presume the existence of undue influence between the parties:

1. Where one of the parties to a contract is in a position to dominate the will of the other and contract is prima facie unconscionable i.e unfair, the court presumes the existence of undue influence in such cases.
2. Where one of the parties to a contract is a Pardanashin Woman, the contract is presumed to be induced by undue influence. In relation to Pardanashin Woman, Bombay High Court made an opinion that a woman becomes Pardanashin because she is totally exempted from ordinary social intercourse not because she is the seclusion of some degree.

A Transaction with Pardanashin Woman

When a Woman can be viewed from the screen or is placed behind the screen i.e veiled is called Pardanashin Woman. The protection of those women is rooted in the principle of good conscience and equity. Special laws are made for these women because they are subjected to ignorance, infirmity, illiteracy, etc are thus easily influenced. The burden of proof should be provided against the person who is transacting with a Pardanashin woman. He has to prove that the transaction had taken place with the consent of the women and her decision was taken by her without any coercion or enforcement and she was made well aware of the provision mentioned in the document of the transaction by the other party with whom she has made the contract. In the case of Tara Kumari vs Chandra Mauleshwar Prasad Singh, it was delivered by the court that the essential thing to establish the burden of proof is that the party executing them should be a free agent and the women should be informed about the terms and conditions of a contract. In the case of Kuna Dei vs Md Abdul Latif, it was delivered by the court 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 were explained clearly the facts in the document of the transaction.

This principle also applies to men also, as in the case of Daya Shanker Vs Bachi, who by their physical or mental capacity is prone to easy influence and after inducement tends to enter into a contract or transaction relating to purchase and sale of the property. The principle on which the protection by law is made for a pardanashin women is based on equity and good conscience of women.

Natural justice

Undue influence affects natural justice when the provision of a will are unjust, unreasonable and unnatural doing violence to the natural instincts of a heart, to the dictates of parental affection, to natural justice, to solemn promise, and to moral duty. Such unexplained inequality amounts to undue influence.

Conclusion

While concluding, it can be said that there is an inadequate consent in the presence of undue influence as defined in section 13 of the Indian Contract Act. Thus, in a fiduciary relationship and in other such forms of relationship, the party which enjoys the real or apparent authority must ascertain that the other party is free from external manifestation.

Reference

• Indian contract Act,1872

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This article has been written by Lakshmi. V. Pillai of 5th year pursuing B.A. LL.B from GLS Law College, Ahmedabad. This article discusses the documents trail Order 11,12,13 and 19 of the Civil Procedure Code, 1908  in detail.

Introduction

One of the essential elements of the rule of law is its procedures. To run a fair trial, equal opportunities shall be given to both parties to access the documents related to the case. In the Civil Procedure Code, 1908, separate chapters are provided so that a fair trial is attainable by both the parties of the suit. After the plaint has been filed by the plaintiff and written statement by the defendant, if the parties feel that proper facts were not disclosed in the suit, either of them can ask for the documents to obtain proper facts of the case.

Before we go further, we need to understand that there are two types of facts:-

1. ‘Facto probanda’ – the facts which constitute a party’s case.
2. ‘Facto probantia’ – the facts which will be considered as evidence if proven.

Under the procedure of discovery, only Facto Probanda can be asked by the parties.

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Discovery – Order 11

Under Civil Procedure Code, 1908 discovery basically means a pre-trial procedural aspect wherein each party is given an opportunity to obtain evidence from the opposite party or parties. In other words, we can say that it is a formal process wherein the parties get a chance to exchange information regarding the witnesses and evidence which will be presented before the court during the trial.

The main purpose of discovery is to make the parties aware of the case, that means there shall not be any ambiguity between parties while the trial is going on. Both the parties shall be clear about the plaint made and issues thereby.

There are various types of discovery:-

1) interrogatories; 

2) requests for production of documents and inspection; 

3) requests for admissions; 

4) depositions; 

5) subpoenas duces tecum; 

6) physical and mental examinations.

Nature and scope

The scope of this section is basically determined by the extent of discovery which can be made by the party with the intervention of the court. The information which is obtained during the discovery is not needed to be admissible in court. As per the requirement, parties can obtain an order from the court for the discovery of required facts/ documents from the opposite party to understand the purpose of the case. Thereby, the scope or extensibility of applying this section depends upon the nature of the case and material which is asked by the other party. So it is the discretion of the court to decide whether the application is covered as per the scope provided to the section under the code or not.  

But there are certain limits to the extensibility of the discovery of the documents. If they are redundant or overly burdensome, they are not called for discovery.

Therefore, it is understood that this procedure is provided to compel the other party to produce documents on which they are relying on, other than the evidence. When such particulars regarding the case are asked through questions, then they are termed as interrogatories. And if the other party is requesting documents then it is the discovery of documents.

Interrogatories

Section 30 and Order XI Rule 1 to 11, 21 and 22 of CPC covers interrogatories. When, with the leave of the Court, parties administer a set of questions on the other party then it is called ‘Interrogatories’. Interrogatories shall be confined to the facts, it shall not be conclusions of law, construction of words or documents, or inference from facts. Under CPC, this is known as the ‘right to obtain information’ by the parties. The party to whom the set of questions were administered shall give reply to another party in writing and under oath. ‘Discovery of interrogatories’ means when the party, while giving answers to the interrogatories, discloses the nature of the case, with affidavit .  

As per the provisions of the code, any party in a suit can file an application to obtain an order from the court to ask interrogatories from the other party. So after filing the plaint, when the written statement is filed by the defendant and when the court sends summons to parties for the first hearing, if any party feels that there is a gap in the facts, then they can file an application under this section and ask order from the court.

Objective

The objective of the interrogatories are:-

1. To determine the nature of the case when it is not clear from the suit filed.
2. To make own case stronger by making the other party do admissions.
3. To destroy the case of the opponent.

Procedure

The willing party to deliver interrogatories shall apply for leave to the court and shall submit the proposed interrogatories to the court. As per Rule 2, the court shall decide the matter within 7 days of filing the application by the party. 

While deciding the matter the court shall take into consideration the following points:

• Any offer which may be sought by the party to be interrogated to deliver particulars;
• To make an admission; 
• To produce documents associated with the matters in question; or
• Any of them.

Further, the court shall consider whether it is necessary in a particular matter, to dispose of the suit fairly or for saving costs. After one set of interrogatories are served, the parties can not serve another set without the permission of the court. The set of questions shall be the ‘question of fact’ rather than the ‘question of law’. Interrogatories shall not be allowed at the premature stage of the case.

Within 10 days of the service, the affidavit to answer shall be filed by the party to whom the interrogatories were administered. If the party fails to comply with such order of the court:-

1. the suit will be dismissed if the party is the plaintiff; and
2. if he is the defendant, his defence can be struck off.

Who may administer interrogatories?

Any opposite party can apply for an order for allowing the party to deliver interrogatories to another party/ies in the suit. This means that the plaintiff can apply for an order from the court  to be administered to the defendant. The defendant can also do the same. In some cases, the plaintiff/ defendant can administer the interrogatories to the co-plaintiff/ co-defendant.  

Against whom interrogatories may be allowed?

As per Rule 5 of Order XI, any party to a suit which can be a:- 

(i) Corporation; or

(ii) Body of persons;

which may be incorporated or not incorporated; empowered by the law to sue or to be sued; on its own name or giving any other person responsibility to sue or any officer, against whom interrogatories can be filed.

If a body corporate is a party to the suit, then in interrogatories it shall be specifically mentioned that to which person or the officer the questions are to be served. 

Form of interrogatories

Interrogatories are filed as per the form provided in Appendix C Form No. 2 of CPC, with required variations as per requirement.

The reply to interrogatories is filed with an affidavit in the form provided in Appendix C Form No. 3 of CPC, with required variations as per need.  

Objections to interrogatories

Objections can be raised by the parties on the following grounds:-

1. Questions are scandalous;
2. Questions are irrelevant;
3. Questions are not exhibited bona fide;
4. Matters which are inquired into are not sufficiently material at this stage;
5. On the ground of privilege; or
6. Any other ground. 

Rules as to interrogatories

While replying to the interrogatories, if the opposite party does not give sufficient answer, or ignore to give an answer, then the party who administered the interrogatories can apply for an order from the Court for ordering the other party to reply sufficiently, or reply further as the case may be. The Court shall pass such an order to the other party after giving them sufficient opportunity to be heard. If the party who fails to reply is the plaintiff, then the suit can be dismissed for want of prosecution. If the party is the defendant, then it will be considered that the fact has not been defended.  

As per Rule 22 of Order XI, the opposite party can use the answers to the interrogatories as evidence, partly or in whole. But at the same time, the court shall check whether the part of the answer which has been considered as evidence by the party is connected to the whole answer, or is it adverse in nature.

As per Rule 6, the parties can object some of the interrogatories but not all. If the parties want to object to the interrogatories, then within seven days of service of such interrogatories, the party shall file the application of the opposition as per Rule 7 of the Order XI of the Code. 

At the same time as per Indian Evidence Act, 1872, if the parties refuse or object to produce any particular document or information in the court, then while using it as an evidence they shall inform the court and other parties. Without the consent of the court, such documents or information which were refused initially can not be used as evidence later, unless it is lawful to do so.

Interrogatories allowed

Interrogatories which are made to be related to “any matters in issue” can be questioned to another party. By “matter,” it means a question or an issue which is related to the dispute in the suit. It need not be an issue which arises from the dispute.

Interrogatories shall not be disallowed or discarded merely on the ground that there are other ways to prove the fact in question. Interrogatories are not the same as pleading. They need not be material facts on which party will be relying, they can be evidence by which parties want to establish a particular fact at the trial.

Interrogatories not allowed

Interrogatories are used when the facts laid down in the suit are not clear. However, under certain circumstances the discovery of the facts can not be applied if:-

1. it constitutes evidence of the opposite party;
2. it involves the disclosure of public information or interests; 
3. it contains any privileged or confidential information. 

Interrogatories which are in the nature of fishing or roving enquiries are not allowed. Questions in the nature of cross-examination shall not be asked. Questions of law are not permitted. Questions which are not bona fide or irrelevant to the case shall not be asked.

Setting aside and Striking off Interrogatories can be made on the following grounds (Rule 7):

• Unreasonably or vexatiously exhibited;
• Prolix, Oppressive, Unnecessary or Scandalous.

The Application for setting aside or striking off interrogatories shall be made within 7 days after service of interrogatories.

Cases 

In the case of Govind Narayan and Ors. vs. Nagendra Nagda and Ors., the Rajasthan High Court observed the importance of interrogatories and the time period in which it shall be filed by the party. The court held the following:

• Reading section 30 with Order XI Rule 1 of the Code, it makes clear that the courts have the discretion to allow service on interrogatories at any stage of the suit. The court confers wide discretion, at the same time the discretion shall be exercised judiciously. 
• The information asked under interrogatories shall have nexus with the dispute in question.
• The stage of the suit shall be significantly considered by the court. At the same time, it is to be understood that the main purpose of this procedure is to save time and cost by encompassing the issues or narrowing down the disputes.    

In a recent case of 2018, Samir Sen v Rita Ghosh, the petitioner filed an application under Order XI after five months of the closure of the plaintiff’s – respondent’s evidence in the trial court. Because of the delay, the lower court dismissed the application for which an appeal has been filed by the aggrieved. The Jharkhand High Court observed that as per the scheme laid down for the trials in the Order XIII CPC, it requires parties to produce their original documents as per their claim founded during the time of presentation of the plaint or filing of the written statement. And because of this, the interrogatories are given under Order XI of the Code. And held that the defendant failed to file the application on time, thereby the order of the trial court was right and the writ petition was dismissed.

Appeal and revision

There is no appeal allowed in the cases where an order for granting or rejecting prayer to administer interrogatories to the other parties pronounced by the trial court. The order which is granted or rejected under this provision is not considered as ‘decree’ and therefore, are not appealable.

The revision under this section is not encouraged normally by the High Courts. As per section 115,  the matter decided by the court is at the discretion of the court and said to be ‘case decided’. The High Court interferes only when the order is clearly illegal or wrong.

Discovery of documents

When the adversary party is simply compelled to disclose the documents which are under its possession or power, then that is called as the discovery of documents. The discovery of documents is covered under the Rule 12-14 Order XI of the code.

Who may seek discovery?

Any party to a suit under oath may apply for an order from the court for the discovery of documents which are related to the matter in question of the suit from the adversary party.

Against whom discovery may be ordered?

An appropriate court can order any party of the suit to dispose of the documents which are in its power or possession to the asking party. However, the party need to be related to the suit.  

Conditions

While the discovery of documents is being asked, two conditions need to be taken care of by the court:-

1. The discovery ordered is necessary for the fair disposal of the suit.
2. The discovery will save costs.

Objection against discovery

The party can raise an objection if the documents required to submit comes under the purview of the privileged documents. However, objecting by filing an affidavit would not be enough, the party who is objecting also needs to give proper reasoning behind such objection. The proper reasoning will enable the court to decide the objection raised by the party. It is open to the court to inspect the documents and check the viability of the objection raised by the party. Another objection which can be filed is that discovery is not necessary at this stage of the suit. 

Admissibility of document

The documents which are asked under the discovery of documents are not always admissible in court. The documents may be admissible in the case if they are relevant to the case and which may have some impact on the issues dealt under the case.   

In Gobinda Mohun v. Magneram Bangur & Co, it was held that:

“Rule 12 of Order 11 is considerably wider than Order 13, Rule 1 of the Code. The right to obtain discovery of an adversary’s documents is a very wide one and is not limited merely to those documents which may be held to be admissible in evidence when the suit is ultimately tried.

It is true that in a suitable case a defendant may object to the production of a document on the ground that it relates solely to his title, but if on the other hand, that document may have some bearing in support of the plaintiff’s title, such objection cannot be validly raised. If an order for discovery is made under  Rule 12 of Order 11 all the documents relating to the case should be embodied in the affidavit of documents by the person against whom the order for discovery is made. If however, the defendant considers that he is entitled to protection in respect of the production of any particular documents which may be entered in the affidavit under Order 11, Rule 13 of the Code, he will be at liberty to raise such objection at the proper stage of the proceedings if and when he is ordered to produce such documents under Order 11, Rule 14 or to give inspection of them under Order 11, Rule 18.

The Calcutta High Court sought to distinguish the Judgment of the A.P. High Court in P. Varalakshmamma v. P. Bala Subramanyam 1958 wherein it was held that:

It is lawful for the Court, under Order 11, Rule 14, Civil P.C., at any time during the pendency of any suit to order the production of a document. The words “at any time” are very significant and important. Rule 14 does not require that the order for production should be made only after an order of discovery is obtained under Order 11 Rule 12 C.P.C.”.

Documents disclosing evidence 

The document which is related to the evidence of the adverse party can not be ordered by the court. Such orders can be detrimental to the administered party which is restricted under the code. 

Affidavit  of documents

The documents under this rule are provided with the affidavit as under the Form No. 5 in Appendix C with required variations as per circumstances.

Privileged documents

Privileged documents are covered under “crown privilege” which is based on the doctrine of “public welfare is the highest law”. However, even if this doctrine is given the importance, it does not mean that justice shall not be paramount. Thereby when parties use it as an umbrella of defence, then under such circumstances, the court has the right to verify the admissibility of such defence. After checking the document, the court can decide on the matter. Mere assertion by the party will not be entertained or accepted by the court.

Oppressive discovery

While ordering the discovery of the documents it shall not be an oppressive order by the court. The court while using its discretion power shall consider two questions:

1. Whether it is important to order such discovery;
2. Whether it is impossible for the administered party to give the documents ordered under discovery.

Rules as to discovery

The general rules for the discovery of the documents are as follows:

1. Any party can get an order from the court for the discovery of the documents or for inspection of documents. 
2. It is the discretion of the court to pass such an order.
3. The court can use its power any time during the suit, either suo moto or by the application of the party.
4. The court shall not pass an order for the discovery, inspection or production until the written statement has been filed by the defendant.
5. No such order shall be passed if the application is made by the defendant until he has not filed a written statement.
6. Discovery of the document shall not be made if the court is not of the opinion that this order will lead to fair disposal of the suit or useful for saving cost.
7. A party to whom an order of discovery of documents has been passed, as a general rule, shall produce all the documents which are under his possession related to the suit.  
8. If the parties are taking any legal protection under the privileges provided under the code, then the court shall verify such documents and give the protection.
9. Failure to comply or default from the side of the parties to the order for discovery, production or inspection,  can lead to adverse inference on the party. 

Inspection of documents

Under Order XI Rule 12-21 of the CPC, the rule for the inspection of discovery is provided. As per Rule 12 of the code the party can compel other parties to produce the documents without filing an affidavit to apply to the court, relating to any matter of question-related to the suit. However, such documents need not be admissible in court unless they give out some connection in a matter of controversy.

As per the Rule 15-19 of Order XI of the code, the inspection of documents can be divided into two categories:

1.  The documents which are referred to in the affidavits or pleadings of the parties.
2. The documents which are not referred to in the pleadings of the party but are in the power or possession of the parties.

And the parties are allowed to get the inspection of the former category documents, not the latter one.

Privileged documents

Privileged documents are :

1. Public records;
2. Confidential communication;
3. Documents which have exclusive evidence of the parties’ title.

Such mentioned privileged documents are protected from the production. So to get benefit from this privilege and to avoid the risk of repetition, the court can order the parties to produce the document to the court. And the court can inspect such documents and ascertain the validity of the claims which were made to make that set of documents underprivileged.

Premature discovery

As per Rule 20, a discovery is termed as premature discovery or inspection:

1) When the right to discovery is based on the determination of any issue or question in dispute; or 

2) For any reason, it is desirable that any issue or question in a suit should be determined before deciding upon the right of discovery.

Non-compliance with order of discovery or inspection

As per Rule 21, the order of the court is binding in nature, and the parties who do not comply shall be liable to pay the penalty. Hereby, we can understand that the intent of the legislature to provide such provision is: 

1. To compel the parties to disclose all the material documents and facts on oath.
2. To restrict the parties from coming up with new documents which are actually in power or possession of the party during the trial. 

The court has the discretion to postpone a premature inspection or discovery. Under such circumstances the first thing court shall do is to determine that question or issue and afterwards, deal with the discovery. The main logic of this provision is to enable the court to distinguish between the difference of deciding an issue in suit from deciding the suit itself. However, it needs to be kept in mind that this provision will not work if the discovery in itself is necessary for solving the issue or question.

The importance of such provision is that if the defendant denies complying with the provision it will be deemed that the defense from the defendant’s side will be struck off and that will restore the position of the defendant to where he had been as if he has not defended. In the case, if the plaintiff does not comply to the provisions then it will lead to an adverse effect that means the plaintiff will disentitle to file a case as a fresh suit on the same cause of action and res judicata will be applicable. Therefore, non-compliance will impact the case adversely.

Admissions – Order 12

Admission basically means the voluntary acknowledgement made by the person against his own interest. It can be an important piece of evidence against a person. It can either be in oral, electronic form or documentary in nature. Admissions are different from the confession which is made under the criminal law. Admission is weaker than confession because the parties have the right to prove that admission made earlier was false. 

However, assertions are different from admission. It can be made in favour of themselves. It can be true or false, therefore assertions are not considered as an important piece of evidence which can be used against a person. 

Importance

As per the case of  Bharat Singh And Anr vs Bhagirathi, the Supreme Court held that:

Admissions are substantive evidence by themselves. But as per section 17 and section 21 of the Indian Evidence Act, they are not conclusive in nature. However, if admission is proved beyond doubt and duly proved, then irrespective of the fact if the witness appeared in the witness box or not, the admission can be considered admissible. 

In the case of Biswanath v Dwarka Prasad, the Apex Court observed that:

1. The admissions are made by the maker against himself unless otherwise proved or explained.
2. The admissions are considered as proprio vigore that means a phrase which by its own force. 

In another case of Supreme Court, Bhogilal Chunilal Pandya vs The State Of Bombay, it has been stated that even if admissions made are not communicated to the other person, then also that can be used against him. For example: if the person has written in the accounts book regarding debt, then if such evidence is available then that will be considered as an admission even if the debt was not communicated to other people.

Kinds of admissions

Under the Code, the admissions are admitted in three ways:-

1. By agreement or by notice;
2. Actual admissions, oral or by documents;
3. The express or implied admissions from the pleadings or by non-traverse by agreement.

Conclusiveness of admission

The admissions are not conclusive in nature. They can be erroneous or gratuitous. Admissions made can be withdrawn or explained away. It can be proved wrong. The context of the admission can be made after hearing the pleadings in entirety. Oral admissions prevail over documentary or records of rights. Even the admission, if made earlier, can be proved to be collusive or fraudulent. And one more important thing is, if the admissions are made by the co-defendant then that can not be used against other defendants.

Notice to admit case

As per Rule 1, any party to the suit can admit the whole or part of the case of the other side in writing.

Notice to admit documents

Within seven days of the notice served by the other party to admit the documents, the party shall respond to the notice. If not responded on the mentioned time then the party which fails to do so will be liable to answer the delay and the costs of providing them. 

Every document which was called upon to admit if:

1. Not denied specifically or by necessary implication, or
2. Not stated to be admitted by the party in their pleading, or
3. Not replied during the reply to the notice;

shall be deemed to be admitted.

One exception to the above provision is the person under disability.

If a person without any valid reason refuses or neglects to admit documents then that person shall be penalised and will be made to pay to the opposite party. The court can suo moto call the party to admit the documents. The form of the notice to submit the documents shall be in Form No. 9 in Appendix C, with variations as per requirement.

Notice to admit facts

Any party in the suit can call the other party to admit facts of the case by giving them notice which shall not be later than nine days before the day fixed for the hearing.

And the other party if refuses or neglects to admit the facts then within six days after service of notice or as per the time prescribed by the court, shall be informed to the court. However, the costs of proving such fact or facts shall be paid by the party.  

Further admissions shall be used only for the purpose of the suit for which it has been made. It shall not be used against the party on any other occasion or in favour of any person other than the party giving the notice.

The form of the notice shall be as per Form No.10 in Appendix C and the admissions made thereby shall be in Form No. 11 in Appendix C, as per the requirements needed. 

Judgment on admissions

As per Rule 6 Order 12, Judgment on admissions can be read as-

Where admissions are made during: 

1. Facts or pleading or otherwise;
2. May be in oral or in writing;

The court at any stage of the suit- 

1. Either on the application or of its own motion;
2. Without waiting for the determination of questions by parties;  

can give out judgment as it may think fit, with regard to such admissions.

The relief which is provided under this section is discretionary in nature. It gives wide discretion to the court by giving it the power to give decree in the suit and at the same time, it is not bound to pass a decree in a reasonable and proper manner. Even the court can call for evidence before passing such decree. But if averments are made in the written statement which leads to trivial issues then under such circumstances the decree under this provision shall not be passed. In case of R.K. Markan vs. Rajiv Kumar Markan, wherein it was observed as under:-

“For passing a decree on the basis of admission of the defendants in the pleadings, the law is well settled that the admission has to be unequivocal and unqualified and the admission in the written statement should also be taken as a whole and not in part….”

While we talk about judgments which are relied upon by the court passing decree, those must be clear, unequivocal and categorical, it shall not be vague and conditional. 

However, in the case of Razia Begum v. Sahebzadi Anwar Begum, the Apex Court discouraged the courts to pass a decree under this provision which not only affects the parties but which also affects the generations.

The court observed that while passing a decree under Rule 6 Order 12, the judge should also look at Rule 5 Order 7 of the code. By reading both sections at the same time it shall be concluded that decree passed under Rule 6 is applicable to commercial transactions only, not otherwise where the claim is based on documents which need proof. So in the matters of will, gift, sale or coparcenary documents admissions can be proved to be erroneous, hence, they shall not be treated as proved on the basis of such admissions.

Production, impounding and return of documents- Order 13

Production of documents

As per Rule 1 of Order XIII, the parties or their pleaders shall produce the documents at or before the settlement of disputes. 

Admission of documents

Subject to the provisions of the Code the admission of the documents are allowed as evidence in the suit when the following particulars are made:

1. The number and title of the suit,
2. The name of the person producing the document,
3. The date on which it was produced, and
4.  A statement of it having been so admitted;

The endorsed documents shall be signed by the Judge.

Where the admission of documents in evidence is:

• An entry in a letter-book or a shop book; or
• Other accounts which are in current use, or
• Entry in a public record produced from the public office or by a public officer, or 
• An entry in a book or account belonging to a person other than a party on whose behalf the book or account is produced;

under such circumstances, the person can produce a copy of the document, after the proper examination, comparison and certification as per Rule 17 of Order VII of the Code.  

Further, the documents admitted into evidence shall be part of the record of the suit.

Return of documents

If any party to the suit or not is having the desire to receive back any of the documents submitted by him in the suit which is placed on the record is entitled to receive the documents unless it is impounded by the court under Rule 8. 

The court can return the documents on the following grounds:-

1. Where the suit is one in which an appeal is not allowed, when the suit has been disposed of, and;
2. where the suit is one in which an appeal is allowed when the Court is satisfied that the time for preferring an appeal has elapsed and that no appeal has been preferred or if an appeal has been preferred when the appeal has been disposed of;
3. During the pendency of the suit, the party can receive the documents if the following conditions are fulfilled:

• the party is substituting the original document with a certified copy from a proper officer;
• Undertakes to produce the original copy if required.

While returning the document which has been admitted in evidence, a receipt shall be given to the person who is receiving it. 

Rejection of documents

Rule 3 gives the discretion to the court to reject the documents on the basis of inadmissibility or irrelevance of the document. The court while rejecting the documents shall also mention the grounds of such rejection.

Impounding of documents

The court can order the parties in the suit to produce any documents or book before the court as per Rule 8 notwithstanding Rule 5 or Rule 7 of  Order 13 or Rule 17 of Order 7 of the code. 

The documents or books impounded by the court shall be in the custody of an officer of the court, for such period with subject to conditions if required. 

Affidavits – Order 19 

Affidavits are dealt under Order 19 of the Code. It is a sworn statement made by the person who is aware of the facts and circumstances which has been taken place. The person who makes and signs is known as ‘Deponent’. The deponent makes sure that the contents are correct and true as per his knowledge and he thereby concealed no material therefrom. After signing the document, the affidavit must be duly attested by the Oath Commissioner or Notary appointed by the court of law.

The person who gives attestation to the affidavit shall make sure that the sign of the deponent is not forged. The affidavit shall be drafted as per the provisions of the code. It must be paragraphed and numbered properly. 

Even though the “affidavit” has not been defined in the code, it basically means “a sworn statement in writing made specifically under oath or affirmation before an authorized officer or Magistrate.”

Essentials

There are some basic essentials which are required to be fulfilled while submitting the affidavit in the court:

1. It must be a declaration by a person.
2. It shall not have any inferences, it shall contain facts only.
3. It must be in the first person.
4. It must be in writing.
5. It must be statements which are taken under oath or affirmed before any other authorized officer or a Magistrate. 

Contents of affidavit

As per Rule 3, an affidavit shall contain only those facts to which the deponent is aware off as true to his personal knowledge. However, interlocutory applications can be filed wherein he can admit his belief. 

Evidence on affidavit

As per section 3 of the Evidence Act, affidavits are not considered as evidence. When there is a need to prove the facts, oral evidence is normally taken into consideration by the court. However, Rule 1 Order 19 is invoked by the Court when it finds that it is necessary to make an order for any particular fact which may be proved by affidavit. If a person provides evidence under the affidavit then the opposing counsel has the right to cross-examine or reply-in-affidavit.

Further, the person who is making an affidavit shall put on those facts only to which he has true personal knowledge. If he gives a statement, not to his personal knowledge then in such case he shall mention the true source. The counsel shall advise the deponent to make sure that he puts facts which he knows rather than what he believes.

The court can reject the affidavit if it is not properly verified and not in conformity with the rules of the code. At the same time court can also give an opportunity to the party to file the affidavit properly. 

In the interlocutory applications like interim injunctions, the appointment of receiver, attachment of property wherein the rights of the parties are not determined conclusively, can be decided on the basis of the affidavit.

False affidavit

Under Section 191, 193, 195, 199 of IPC,1860, filing a false affidavit is an offence. Giving a lenient view will undermine the value of the document and it will harm the proceedings and will provide no justice to the parties. Criminal contempt of court proceedings can be initiated by the court against the person who files false affidavits in the court of law. Strict actions are taken against public officials who files false affidavits.

As per section 193 of the IPC:

• a person who intentionally gives false evidence or fabricates false evidence during a judicial proceeding, he shall be punished with seven years of imprisonment and fine; 
• and whoever intentionally gives or fabricates false evidence in any other case, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine.

Conclusion

The procedures provided under the CPC are so important, that if not followed properly, can adversely affect the parties. The court has discretionary powers under Order 11, 12, 13 and 19 to pass such order which it deems fit to adjudicate matter fairly. The parties shall also follow the procedures provided within the time frame, so that the case can be disposed off quickly and effectively.

References

• https://www.supremecourtbc.ca/sites/default/files/web/The-Discovery-Process.pdf
• http://www.mondaq.com/india/x/730266/court+procedure/Discovery+By+Interrogatories
• http://www.legalserviceindia.com/legal/article-771-interrogatories-and-privileged-documents-a-discovery-device-in-civil-suit.html
• http://www.legalserviceindia.com/legal/article-771-interrogatories-and-privileged-documents-a-discovery-device-in-civil-suit.html
• https://lawtimesjournal.in/discovery-inspection-documents/
• https://www.lawnn.com/law-evidence-admissions-admissions-indian-evidence-act-1872/
• http://cja.gov.in/data/Civil%20Law.pdf
• https://www.lawnotes4u.in/2018/09/affidavit-under-cpc-order-19-format-meaning-essentials-etc.html

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This article is written by Gauraw Kumar, a 2nd-year student of BVP-New Law College, Pune. In this article, he covers “Proceedings for maintenance of wives, children and parents” and tries to discuss all the Sections of the Code of Criminal Procedure, 1973 related to it. 

Introduction

The word ‘Maintenance’ is not defined in the Code of Criminal Procedure, 1973. Chapter IX of the Code of Criminal Procedure deals with provisions for maintenance of wives, children and parents. ‘Maintenance’ in general meaning is keeping something in good condition. ‘Maintenance’ in legal meaning is money (alimony) that someone must pay regularly to a former wife, husband or partner, especially when they have had children together. It is the duty of every person to maintain his wife, children and aged parents, who are not able to live on their own. 

Scope and objective of Proceedings

Scope and objectives of proceedings for maintenance of wives, children and parents are the following:

• The proceedings are not punishable in nature. The main objective of Chapter IX of Cr.PC is not to punish a person who is not maintaining those whom he is bound to maintain.
• The main objective is to prevent homelessness by way of procedure to provide a speedy remedy to those who are in pain.
• It does not make any distinction between persons belonging to different religions or castes.
• It has no relation to the personal laws of parties.

Order for maintenance of wives, children and parents

Section 125 of Cr.PC deals with “Order of maintenance of wives, children and parents”. In this Section, it is given the name of parties who are entitled to get maintenance, essential ingredients to claim and get maintenance and order of the first-class magistrate.

In the case of Mohd. Ahmed Khan v Shah Bano Begum, Supreme Court delivered a judgement favouring maintenance given to an aggrieved divorced Muslim woman.

Who can claim and get maintenance?

Section 125 of Cr.PC deals with “Order for maintenance of wives, children and parents”. According to Section 125(1), the following persons can claim and get maintenance:

• Wife from his husband,
• Legitimate or illegitimate minor child from his father,
• Legitimate or illegitimate minor child (physical or mental abnormality) from his father, and
• Father or mother from his son or daughter.

Wife

In the case of Chanmuniya v Virendra Singh, Supreme Court has defined ‘Wife’ and it includes even those cases where a man and woman have been living together as husband and wife for a reasonably long period of time. Strict proof of marriage should not be a precondition of maintenance under Section 125 of the Cr.PC.

In the case of Smt. Yamunabai Anantrao Adhav v Ranantrao Shivram Adhav, the Supreme Court held that marriage of women in accordance with Hindu rites with a man having a living spouse is completely nullity in the eye of law and she is not entitled to benefit under Section 125 of the Cr.PC.

In the case of Sirajmohmedkhan Janmohamadkhan v Hafizunnisa Yasinkhan, the Supreme Court held that maintenance can be allowed to the wife when her husband is impotent.

A wife can claim and get maintenance from her husband in the following conditions:

• She is divorced by her husband, or
• Obtained divorce from her husband, and
• She has not remarried, and
• She is not able to maintain herself.

Note: Muslim wife can also claim maintenance under Cr.PC though they have a separate Act (Muslim Women Protection of rights on Marriage Act) for them.

A wife can not claim and get maintenance from her husband in the following conditions:

• Wife living in adultery, or
• Refuses to live with husband without any valid reasons, or
• Living separately by mutual consent.

Legitimate or illegitimate minor child

Son

‘Minor’ means a person who, under the provisions of Section 3 of the Indian Majority Act, 1875 is deemed not to have attained his majority i.e., above the age of 18 years.

Minor Son (Legitimate or Illegitimate) is entitled to get maintenance under Section 125 of Cr.PC.

Daughter

If Minor Daughter (Legitimate or Illegitimate) is unmarried, then she is entitled to get maintenance from her father and if she is married, then she is also entitled to get maintenance from his father but the magistrate has to be satisfied that her husband has not essential and sufficient means for the maintenance of his minor wife. In the case of Shahbuddin v State of UP, a minor daughter attaining majority during the pendency of the application for maintenance was held entitled to maintenance up to the date of majority.

Legitimate or illegitimate abnormal child who has attained majority

If any major child (Legitimate or Illegitimate) is abnormal (mentally or physically unfit), then the father of that child has to maintain him and he can claim maintenance on this ground of abnormality.

Father or mother

• Natural father and mother can claim maintenance.
• Mother includes adoptive mother, she can claim maintenance from adoptive son.
• Father can claim maintenance, it is a statutory obligation, this claim cannot be defeated by pleading that the father failed to fulfil his parental obligation.
• A childless stepmother can claim maintenance.

In the case of Pandurang Bhaurao Dabhade v Baburao Bhaurao Dabhade, Bombay High Court has held that the father or mother can claim maintenance under Section 125(1)(d) if he or she is unable to maintain himself or herself. But it is also important that if parents claim maintenance to their children, children must have sufficient means to maintain their parents and yet neglects or refuses to maintain the father or mother.

Essential conditions for granting maintenance

There are some essential conditions which should be fulfilled for claiming and granting maintenance:

1. Sufficient means for maintenance are available.
2. Neglect or refusal to maintain after the demand for maintenance.
3. The person claiming maintenance must be unable to maintain himself/herself.
4. Quantum of maintenance depends on the standard of living.

Sufficient means to maintain the person

If any person has sufficient means for maintenance, then it is his duty to maintain his wives, children and parents. If sufficient means are not available, then it will be a perfect and valid defence for people who are legally bound for maintenance of wife, children and parents.

Neglect or refusal to maintain

Any person neglects or refuses to maintain his wives, children and parents in malafide intention or in any type of egoistic behaviour on the demand for maintenance by them.

The person who claims maintenance must be unable to maintain himself/herself

It is a very important condition for granting maintenance that a person who is claiming maintenance must be unable to maintain himself/herself. For example- If a wife is earning well, then she can not claim maintenance under this Section. In the case of Abdulmunaf v Salima, it was held that the wife who is hale and healthy and is sufficiently educated to earn for herself but refuses to earn from own and claim maintenance from her husband will be entitled to claim maintenance but that her refusal to earn under the circumstances would disentitle her to get complete amount of maintenance.

Special provision for maintenance of minor married girl

If the husband of a minor daughter does not have sufficient means to maintain her, then it is the duty of her father to give maintenance. In these circumstances, married minor daughter is entitled to get maintenance from the father. In the case of Alok Banerjee v Atoshi Banerjee, a person who is unable to maintain themselves.

Quantum of maintenance

Quantum of maintenance means the amount of maintenance. Quantum of maintenance depends on the standard of living. For example- If any issues raised in a rich family, then demand for maintenance will be more as compared to poor family according to their standard of living in a prior life.

In simple words, the Court should also make sure that whether maintenance granted is justified according to the status of a family or not?

Jurisdiction of Magistrates to deal with maintenance proceedings

According to Section 125(1)(d), If any person neglects or refuses to maintain his wife, children or parents, then a Magistrate of the First Class can order such person to make a monthly allowance for the maintenance of his wife, children or parents, at such monthly rate as such Magistrate thinks fit, and to pay the same to such person as the direction of magistrate.

If a minor female child is unmarried, then the magistrate can order to make such allowance, until she attains her majority. In case a minor child is married and the magistrate is satisfied that the husband of such minor female child is not possessed of sufficient means, then the magistrate can order father of the minor female child to make such an allowance for maintenance.
When a proceeding is pending regarding monthly allowance for maintenance, the Magistrate can order such person to make a monthly allowance for the interim maintenance of his wife, children or parents and the expenses of such proceeding which the Magistrate considers reasonable.
An application for the monthly allowance for the interim maintenance and expenses of proceeding should be disposed within sixty days from the date of the notice of the application to such person.

According to Section 125(2), If a court order for such allowance for maintenance or interim maintenance and expenses of the proceeding, then it should be payable from the date of the order or if so ordered, then it shall be payable from the date of application for maintenance and expenses of proceedings.
According to Section 125(3), If any person fails to comply with the order without sufficient cause, then Magistrate can order to issue a warrant for levying the amount with fines. If the person again fails after the execution of the warrant, then the punishment of imprisonment for a term which may extend to one month or until payment of sooner made is awarded.

Procedure for maintenance

Section 126 of Cr.PC deals with “Procedure for maintenance”. This Section says the following:

• Proceeding under Section 125 may be taken in the following district:

1. Where he is, or
2. Where he or his wife resides, or
3. Where he last resided with his wife or mother of an illegitimate child.

• Evidence to be taken in the presence of a person against whom maintenance is to be ordered.
• If a person is wilfully avoiding summons, then ex-parte evidence is taken in that case.

Alteration in allowance

Alteration in allowance means an order to increase, decrease or remove/cancel the allowance which was ordered by the Magistrate under Section 125.

According to Section 127(1), if a magistrate ordered to give allowance for maintenance under Section 125 according to the conditions of parties at that time, but if the present conditions of parties have changed, then he can also order to alter the allowance. For example- 

1. Husband had a well-settled job and means for maintenance, on this basis the Court has ordered him to maintain his wife and to allowance under Section 125. But in the present condition, the husband has no job and means for maintenance. Then, the Court can alter the allowance and can reduce the amount of allowance.
2. If a wife was not having any job or she was unable to maintain herself and she got the order of allowance under Section 125. But after some months, she is well settled and she has the means to maintain herself. In this case, the Court can order to remove or cancel allowance.

According to Section 127(2), Magistrate shall cancel or revoke any order given under Section 125 by him, if it appears that it should be cancelled in consequences of any decision of the competent Civil Court. For example- If Magistrate has ordered to give allowance to wife after divorce but Civil Court has ordered to live together. Then, Magistrate has to revoke his order which was given under Section 125.

According to Section 127(3), where an order has been made in favour of women under Section 125, then the magistrate can cancel the order in the following case:

1. If a woman is remarried after divorce.
2. If a woman has taken allowance under any personal laws after divorce.
3. If a woman has voluntary leave her right to maintenance.

According to Section 127(4), the Civil Court shall take into account the sum which has been paid to such person as monthly allowance for maintenance and interim maintenance under Section 125 at the time of making any decree for the recovery of any maintenance or dowry.

Enforcement of order of maintenance

Section 128 deals with “Enforcement of order of maintenance”. According to this Section, the following are the conditions for enforcement of the order of maintenance:

• Copy of order under Section 125 is given to that person free of cost in whose favour it is made. In case the order is in favour of children, then the copy of the order will be given to the guardian of children.
• If any Magistrate has made an order under Section 125, then any Magistrate of India can enforce this order where that person lives who have to give maintenance.
• The Magistrate has to satisfy two conditions before enforcement of order:

1. Identity of parties, and
2. Proof of non-payment of allowances.

Conclusion

Chapter IX of the Code of Criminal Procedure is essential for the protection of the rights of the divorced wife, children and aged parents. It is made to protect them from unusual livelihood. Maintenance is the duty of everyone who has sufficient means for the same. In this chapter of Cr.PC, there are various provisions given related to maintenance like who is entitled to maintenance, essential conditions for granting maintenance, Procedure of maintenance, Alteration of the previous order, Enforcement of order of maintenance etc.

Reference

• Bare Act of Cr.PC

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This article is authored by Miran Ahmed who is a student of BBA.LLB(H) at Amity Law School, Kolkata; and deals with the distribution of assets under the Code of Civil Procedure.

Introduction

The Civil Procedure Code, 1908 is a procedural law related to the administration of civil proceedings in India. It lists the procedure for the distribution of assets by a Court for cases involving one party or more, on deciding which assets are available for rateable distribution and which are not; and the method of distribution of assets in such cases. The individuals holding a decree can participate in the assets of the judgement-debtor. In cases where multiple parties hold a decree, the judgement for co-plaintiffs is passed as a whole but the execution of decree can be done in a matter of attachment and sale. There is a special provision in the Civil Procedure Code that deals with the execution of decree when there are multiple parties involved.

Nature, scope and objective

The distribution of assets involves evaluation of the market value of assets, analysation of the share of individuals entitled to the assets, granting a decree to the individuals entitled to the assets by passing judgement and executing the decree to divide the assets among the entitled individuals. 

For example, ‘X’ and ‘Y’ are co-plaintiffs and become decree-holders after the judgement is granted which entitles them to the assets. Let us say for the purpose of the execution of decree since ‘X’ is entitled to half of the assets in the suit related to property, whereas ‘Y’ is entitled to only a quarter. The execution of such property shall be done according to respective shares of individuals in a matter of the sale. And whatever the amount be received after selling off that property, for the purpose of execution of such decree, ‘X’ will get exactly half the amount whereas ‘Y’ will get exactly one fourth the amount. This process of distribution is called distribution of assets for civil suits and the provisions regarding the same are provided under Section 73 of the Code of Civil Procedure, 1908.

The object of Section 73, which provides for the distribution of proceeds of execution sale rateable amongst the decree-holders, is to provide a cheap and expeditious remedy for the execution of money decree held against the same judgment-debtor by adjusting the claims of rival decree-holders without the necessity for separate proceedings. The special provision was provided to ensure all the decree-holders had an equal footing in the property or assets they were entitled to, for the purpose of execution. And that each decree-holder secured their share of the assets lawfully. There are two prime objectives of the special provision under Section 73, which are:

1. It helps prevent an unnecessary multiplicity of proceedings when dealing with multiple parties holding a decree or claim to be entitled to a share in the assets.
2. To ensure a lawful and equitable distribution of assets among all decree-holders by providing an equal footing to them.

Conditions

The following conditions must be met to entitle a decree-holder to participate in the assets of a judgement-debtor and are essential for the application of Section 73:

1. An application must be made to the Court which holds the assets by the decree-holder claiming to share in the rateable distribution;
2. Such an application should have been made before the receipt of assets held by the Court;
3. Only the assets held by the Court can be claimed in rateable distribution;
4. Both the attaching creditor and the decree-holder claiming to participate in the assets should hold the decree for payment of money;
5. Such decree should have been obtained against the same judgement-debtor.

In the case of Bharat Paint Mart V. Bhagwati Devi, 1961, it was held that the essential conditions of Section 73 must be met for its application as stated above.

The holder of a decree against two or more persons applies for a rateable distribution of the assets realized from the property of one person, the application is one for the execution of the decree against the same judgement-debtor. Also, a decree against a partner and a decree against him in his individual capacity are decreed against the same judgement-debtor. But a decree against a firm and a decree against a partner in his individual capacity are not against the same judgement-debtor.

In the case of Boban V. Sajith Kumar, 2003, the Kerala High Court reiterated that the application for execution of decree must be filed to the Court before the assets came into the custody of the said Court.

Separate Application

Section 73 does not require a separate application for rateable distribution and there cannot be any objection to include a prayer for distribution of assets in an application which is, in fact, the execution of the decree itself  This can be observed in the case of M/s. Suraj Lal V. P.R.K Sugar Works,1960 by the Allahabad High Court and Shamsunder and Co. V. Sunnilal Vesaji, 2001 by the Mysore High Court, where the decree-holder had his decree under execution before the Court received the assets and was entitled to claim rateable distribution. Section 73 has nothing in it that warrants the decree-holder to make a separate application for rateable distribution.

Assets available for rateable distribution

Section 73 provides for a case where the assets are held by a court, and multiple individuals have made an application to the court for the execution of decrees and payment of money before the receipt of assets. And have not obtained the assets after deduction of the cost of realization. Such assets will be rateaby distributed among all persons entitled to the property provided if any property is sold subject to mortgage or charge; the mortgagee shall not be entitled to share in any surplus arising from the sale. And any property liable to be sold in execution of decree subject to mortgage or charge may be ordered by the Court to be sold free from mortgage or charge with consent of the mortgagee, giving him the same interest in the proceeds of the sale as he had in the property sold.

With regard to the distribution of the proceeds of the sale, Section 73(1)(c) provides, “Where any immovable property is sold in execution of a decree ordering its sale for the discharge of an incumbrance thereon, the proceedings of sale shall be applied in the following way:

Firstly, in defraying the expenses of the sale;

Secondly, in discharging the amount due under the decree;

Thirdly, in discharging the interest and principal money due on subsequent incumbrances (if any); and

Fourthly, rateably among the holders of decrees for the payment of money against the judgment-debtor, who have, prior to the sale of the property, applied to the court which passed the decree ordering such sale for the execution of such decrees, and have not obtained satisfaction thereof?”

In M. Jambanna V. K. Honnappa, it was held that the learned judge was wrong in denying the claim to rateable distribution as the application was filed before the receipt of assets by the Court as required by the rules under Section 73.

In Kotak & Co. V. State of U.P, 1987, it was held by the Supreme Court that the application claiming rateable distribution must have been made to the Court holding the assets before the assets were received by the Court.

Cost of Realization

The cost of realization of assets by the Court is deducted from the total value of the asset before the decree is executed and the asset is then distributed to the entitled individuals. The cost is borne by the decree-holder as the process of realization of the asset is done for the decree-holder or the individual entitled to the asset.

Mode of Distribution

The distribution of rateable assets is done by sale if two or more parties are involved. A property entitled to two individuals is sold by the Court and the cost of realization is deducted from the total sale value of the property. The remaining amount is then divided between the two parties based on the share they are entitled to and distributed.

Suit for Refund

Section 73(2) states that when all or any assets liable to be rateably distributed are paid to a person not entitled to receive the same, the person entitled may sue such a person and compel him to refund the assets.

In the case of Suryarao v. Chalamayya (AIR (34) 1947 Madras 339), a person not entitled to rateable distribution was wrongfully paid a portion of the assets. A court cannot be deprived of its jurisdiction to pass orders reversing its own orders to meet the ends of justice.

In the case of Laxmi Narain V. Firm Ram Kumar, 1970, the Court had erroneously disbursed the entire assets to one of the decree-holders when the request for rateable distribution of the other decree-holder was pending consideration. The decree-holder who received the entire amount was asked to refund the rateable amount to the excluded decree-holder.

The priority of Government Debts

During the execution of a decree, the priority shall be given to Government debts during the distribution of assets. In the case of Excise And Taxation Officer V. Gauri Mal Butail Trust, 1959, it was mentioned that “The Common Law doctrine, that if the debts due to the Crown are of equal degree to the debts due to a private citizen, then the crown must have priority against the private citizen, is a part of the law of this country.”

Determination of claim

The application of claim by decree-holders is analysed to determine the share of the entitled parties. And the rightful execution of a decree is done to ensure equitable distribution of assets under law. The determination of claim is essential to establish the debt to the government which takes precedence over other debts.

Manickam v. ITO, Madras

In this case, a revision petition was filed by the Income Tax Officer of Madura South praying that out of some money in the custody of that court in the course of the execution of a decree obtained by the present petitioner, the arrears of income-tax due by the assessee might be paid in the first instance. It was to be determined whether the debt to the Government takes priority and if the Income Tax Officer’s petition to a civil court was sustainable. The decision was that the debt to the Government took priority and a remedy given by a statute for the recovery of a debt due to the Government in no way takes away the right of the Government to invoke other methods if it thinks fit.

Appeal

Section 108 mentions the procedure of appeals and appellate jurisdiction. The order of execution of a decree cannot be appealed and therefore any order under Section 73 for the purpose of distribution of assets is not appealable. This was not the case prior to the Amendment Act of 1976 as it was made appealable.

However, Section 144 discussed the application for restitution where a decree or order is reversed in any appeal, revision or other proceeding or set aside or modified in any suit instituted for that purpose; the Court that passed the decree shall cause restitution to be made to any party entitled to such restitution. The Court may make any orders which may include the order of refund of costs and payment of interest, damages, compensation and mesne profits. The Court which passed the order includes:

1. The Court of the first instance where the decree is varied or reversed in the exercise of appellate or revision jurisdiction.
2. Where the decree has been set aside by a separate suit, also in the Court of the first instance.
3. Where the Court of the first instance has ceased to exist or ceased to have jurisdiction to execute it.

Revision

Section 115 discussed the procedure with regards to the revision of cases. The High Court may call for the record of any case which has been decided by a subordinate court and in which no appeal lies if the Court appears

1. To have exercised a jurisdiction not vested in it by law,
2. To have failed to exercise a jurisdiction vested in it by law,
3. To have acted in exercise of its jurisdiction illegally or with irregularity. 

The High Court shall not reverse or vary any order deciding an issue in the course of a suit except where the order made in favour of the party applying for revision would have disposed of the suit. The High Court shall not reverse an order against which an appeal lies in the High Court or subordinate court. Also, the revision shall not operate as a stay of suit or other proceedings before the Court except where the suit or other proceedings is stayed by the High Court.

In the case of Dhirendrarao Krishna V. Virbhadrappa, a revision application is observed when a review is requested allowing rateable distribution of the proceeds of a sale in execution at the suit of the applicant. But the application is turned down the judge.

Conclusion

The provisions for distribution of assets provides a fair claim for each decree-holder. The Civil Procedure Code is of superior judicial quality than what is generally available under other statutes. It is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishments and penalties. The laws under this code should be so construed as to render justice wherever reasonably possible. The judge is entrusted exclusively with the administration of justice to the best of his ability under the provisions of the law.

References

• https://indiacode.nic.in/handle/123456789/2191?locale=en
• https://ibbi.gov.in/legal-framework/act

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This article is written by Gauraw Kumar, a 2nd-year student of BVP-New Law College, Pune. In this article, he covers “Offences Relating to Religion” and tries to discuss all the Sections of the Indian Penal Code surrounding it.

“If I were a dictator, religion and state would be separate. I swear by my religion. I will die for it. But it is my personal affair. The State has nothing to do it. The State would look after your secular welfare, health, communications, foreign relations, currency and so on, but not your and my religion. That is everybody’s personal concern.” -Mahatma Gandhi

Introduction

India is a secular country and the principle of secularism falls in line with the Preamble of the Constitution along with Article 25, Article 26, Article 27, Article 28, Article 29 and Article 30 of the Indian Constitution. The Constitution of India grants freedom of religion. The Indian Penal Code discusses the provisions for offences relating to religion. In the case of Kutti Chanami Moothan v. Ranapattar (1978) 19 Cri LJ 960, it was held that ‘It is the main principle of good government that everyone should be offered to proclaim his own religion and that no man should be suffered to insult the religion of another.’

Chapter XV of the Indian Penal Code, 1860 discusses the offences relating to Religion.

Divisions of Offences Relating to Religion

Chapter XV (Of Offences Relating To Religion) of the Indian Penal Code contains five Sections- Section 295, Section 295A, Section 296, Section 297 and Section 298. The offences relating to religion can be broadly classified into three categories:

1. Defilement of places of worship or objects of great respect (Section 295 and 297).
2. Outraging or wounding the religious feelings of persons (Section 295A and 298).
3. Disturbing religious assemblies (Section 296).

Defilement of Places of Worship or objects of Great Respect (veneration)

According to Section 295 of the IPC, “any person who destroys, damages or defiles any worship place, or any object declared as holy object by any class of persons with the intention of insulting the religious sentiments of any other class or with the knowledge that any of the class is likely to consider such destruction or defamation as an insult to their religion, shall be guilty and punishable with imprisonment of mentioned term which may extend to two years, or with fine, or with both.”

In simple words, if any act is done by a person which results in defamation and destruction of any worship place or object (which is declared as sacred by any religion) with a sole intention of insulting their religion, then that person shall be held liable under the Section 295 and shall be punishable with imprisonment, or with fine, or both.

Section 295 enforces people to respect the religious beliefs of persons of any religion. According to Section 297 of the IPC, “If a person (with an intention of destroying the religious feelings of any person, or hurt the religious feelings of any person, or with the knowledge that the feelings of any person are probably to be hurt or destroyed, or with the knowledge that the religion of any person is probably to be insulted) commits any trespass in any worship place or place of sculpture, or any place set aside from the performance of funeral rites or as a repository for the remains of the dead, or offers any shame to any human body, or causes disturbance to any persons assembled for the performance of funeral ceremonies, then that person shall be held liable under the IPC and he shall be punished with imprisonment of term, mentioned in description which may extend to one year, or with fine, or with both.”

In simple words, Section 297 deals with punishment to people (with the intention to hurt religious feelings of another) who commit a trespass in any worship place, or in sepulture, or burial, or place set apart for burial rites.

Ingredients of Section 295 and 297

In order to understand the concept of Section 295 and 297 more clearly, we have to know the essential ingredients of these Sections. The essential ingredients of Section 295 and 297 are:

1. Intention or Knowledge.
2. Destruction, damage or defilement of:

• A Worship place, or
• Veneration place.

1. An object declared as a sacred object.
2. Trespass into:

• Worship place, or
• Sepulture place, or
• A place of performing funeral rites or depository of remains of the dead.

Intention or Knowledge

It is an important ingredient to make anyone liable for the offence under Section 295 of IPC. It is very important that the person has the intention to destroy, damage or defile a place of worship or an object (declared as a holy object by any religion). Without any malafide intention to hurt religious feelings, a person cannot be held liable under Section 295. Mere defilement of a place of worship is not offensive under these Sections. The intention to insult is assessed by the facts and circumstances of the case.

If ‘A’ belongs to Hindu religion and he removed some old building materials of a mosque that were in rotten condition and in disuse; ‘A’ would be held not liable under Section 295 and 297 of IPC because he had no intention to insult any religion. He had no knowledge that his actions will cause hurt to any religion.

‘A’ belongs to Mohammedan religion and he throws a lit cigarette on the Viman (a holy object of Hindu religion), it cannot be claimed to be an unintentional act. Such action will be offensive under IPC. Sexual intercourse inside a mosque or a temple is an offence under Section 297 of the IPC.

Destruction, Damage or Defilement

These words should be understood in the sense of making property dirty, unclean or foul. It does not mean only physically or materially damaging the property but it is also something, that would affect the pure state of the place. The word ‘defilement’ does not mean only physical destruction but also situations where a place of worship or holy object of worship coated ritually or in an impure manner.

Place or Object to be Sacred

It is an essential ingredient of this Section that the destruction caused must be of a place of worship or holy place. As a general rule, temples, churches, mosques, synagogues, kyaungs are considered holy places by virtue of them being places of worship. In the case of Joseph v. State of Kerala, a hut was used as a worship place by people of a specific religion. ‘A’ took possession by court order and took down the images of the Hindu Gods and was charged under Section 295. The High Court held that ‘A’ has the right to do whatever he has done and he had not intended to hurt the religious beliefs and holy object and hence, he was held not guilty. Religious books like the Bible, the Koran, the Granth, the Gita etc. are held to be sacred even though they are not worshipped per se.

Trespass into a place of worship or place of sepulture

According to Section 297, a person is liable when he trespasses (not need to criminal trespass) into a place of worship or of sepulture. The word ‘trespass’ in this Section means an unjustifiable intrusion upon a property that is in the control of another. Sexual intercourse within a place of worship would make liable under this Section.

Indignity to Human corpse (body) and Disturbing and defaming Funeral Rites

Any type of contempt to a human corpse disturbing the performance of funeral rites is a criminal offence under Section 297. ‘Disturbance’ means any type of active intrusion to the funeral ceremonies. In the case of Basir-ul-Huq v. State of West Bengal, the mother of ‘A’ died. He, along with others, took the body to the cremation grounds. In the meantime, the accused filed a complaint to the police stating that ‘A’ had throttled his mother to death. After that, he came with police on cremation grounds and disturbed the ceremonies. But, it was found that the death of A’s mother had occurred naturally. ‘A’ filed a complaint against accused under Section 297. The accused was held guilty and was sentenced to three months of rigorous imprisonment.

Outraging religious feelings

Section 295A deals with ‘Intentional and spiteful activities, intended to outrage religious beliefs of any class by insulting its religion or religious beliefs’. According to this Section, any person, with the spiteful intention of insulting the religious feelings of any class of citizens of India with words (spoken, written or by visible presentation or by other methods) insults or attempts to insult the religion or the religious feelings of any class, shall be held liable and punished with imprisonment of either mentioned term which may extend to three years, or with fine, or with both.

Section 298 deals with ‘Uttering, words, etc with deliberate intent to injure the religious beliefs of any person.’ According to this Section, any person (with the deliberate intention of insulting the religious feelings of any other person) who does the following activities shall be punished with imprisonment for a mentioned term in the description which may extend to one year, or with fine, or with both:

• Utters any word or makes any sound which is in hearing of that person.
• Makes any gesture which is in the sight of that person.

Ingredients of Section 295A and 298

These sections of the Indian Penal Code deals with the act done deliberately with an intent to insult any religious feelings or sentiments.

Section 295A deals with actions intended to insult religious feelings or sentiments of a particular class, whereas Section 298 deals with punishment of those actions (verbal or visible) that intend to insult religious feelings of another.

Disturbing Religious Assemblies

Section 296 deals with ‘Disturbing religious assembly.’ Any person who voluntarily causes disturbance to any assembly (which is lawfully engaged in the performance of worship), or religious ceremonies shall be liable in this Section and punished with imprisonment of either mentioned term which may extend to one year, or with fine, or with both.

Ingredients of Section 296

Essential ingredients of this Section are:

1. A lawful assembly which is engaged in the performance of religious worship or ceremony.
2. Such assembly and ceremony should be lawful.
3. Any types of disturbance are caused by an accused.
4. Activities of accused must be voluntary.

This Section gives special protection to assembly worship. It does not extend over individual worship. An assembly of religion is regarded as lawful unless it interferes with the ordinary use of the streets by the public.

Conclusion

India is a secular country and every Indian has a ‘right to religion’ given in our Indian Constitution. Chapter XV (Section 295 to 298) of the Indian Penal Code deals with offences and punishment of offences relating to religion. No one can insult anyone’s religious beliefs and any holy object of any religion. If anyone does so, punishment is mentioned in the Indian Penal Code. Offences relating to religion are broadly classified into three main categories: Defilement of places and holy objects of any religion, insulting any religious feelings and disturbing religious assemblies and religious ceremonies. In this way, the protection of religious rights is arranged in Indian laws.

References

• Bare Act of the IPC

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

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This article is written by Sachi Ashok Bhiwgade, B.A.LLB (Hons.) student of Hidayatullah National Law University, Raipur. This article talks about Section 144 and Section 11 of the Civil Procedure Code, 1908 which talks about Restitution and Res Judicata. 

Introduction

The expression ‘Restitution’ is not defined under the Civil Procedure Code. Restitution in relation to Civil procedure code means giving back or restoring to the person who is entitled to the benefit from the other party who has wrongly received such benefit under an erroneous decree or order of the court. Res judicata is a Latin term that denotes ‘matter already adjudged by the court cannot be raised again’. These doctrines are not new concepts and are only given statutory recognition under Section 144 and Section 11 of CPC. When a party has filed an application for restitution and it has been dismissed by the Court, res judicata becomes applicable.

Meaning

Restitution in the literal term means to put back or restore anything which has been taken from another in an unfair manner. In other words, the return or restoration of something which has been lost or stolen to the rightful owner of that thing. The Merriam Webster dictionary defines restitution as a legal action serving to cause restoration of a previous state.

Doctrine of restitution

The doctrine of restitution implies to brings the aggrieved party to the original position where the benefit of the erroneous judgment of the court is received by the other party who was not entitled to such benefit.  Restitution is not a new concept and Section 144 merely gives statutory recognition to this principle. Section 144 of CPC deals with the application for restitution. 

Section 144 states that: 

1. When a decree or order of the Court has been: 

• varied/reversed in any appeal, revision or other proceedings;
• is set aside/ modified in any suit instituted for that purpose.

The Court that passed the decree/order will grant restitution on receiving an application of the party entitled to the benefit

The court in the case of Mahjibhai Mohanbhai Barot vs Patel Manibhai Gokalbhai held that an application for restitution is an application for execution of a decree.

The Supreme Court in the case of Lal Bhagwant Singh vs Rai Sahib Lala Sri Kishen Das held that the party who received the benefit of the erroneous judgment is by law under an obligation to make restitution to the other party for his loss.   

The same view was reiterated by the court in the case of Binayak Swain vs Ramesh Chandra Panigrahi, the doctrine of restitution means that, on reversal of a decree or order, an obligation is imposed by law on the party who has received the benefit of the erroneous decree to make restitution to the other party for his loss. This obligation automatically arises when the decree or order is reversed or modified by the Court. It necessarily carries with it the right of restitution for all the things that have been done under the erroneous decree. The Court while making restitution is under a duty to restore the parties, as far as possible, at the time when the erroneous action of the Court displaced them.

The Apex Court in the case of Union Carbide Corporation v. Union of India held that restitution is a principle of equity and is subject to the Court’s discretion. Section 144 of CPC doesn’t grant any new substantive right to the party not already obtaining under the general law. The Court is obliged to ensure that no one goes back with a feeling that he was impaired by an act which he did on the faith of the Court’s order.

Actus curiae neminem gravabit

The Latin maxim actus curiae neminem gravabit means the act of court should not affect anyone and is founded upon the principle of equity. The Court is obliged to ensure that no one is endured by its order and it should not pass any order to the prejudice of any person. The apex court reiterated the maxim of actus curiae neminem gravabit in the case of Odisha Forest Development Corporation v. M/s Anupam Traders.    

Conditions

In applying for restitution, the following conditions must be fulfilled:

• The decree/order must have been varied or reversed in any appeal, revision or is set aside or modified.
• The party in respect of the reversed or modified decree/order must be entitled to benefit by way of restitution or otherwise.
• The relief claimed by the party must be properly consequential of the variation, reversal, setting aside or modification of the decree/order.

The Orissa High Court in Banchhanidhi Das vs Bhanu Sahuani laid down certain principles to be followed for the application of restitution:

• There should be an erroneous judgment passed by the court.
• The party to the record must have received the benefit of the erroneous judgment.
• The party applying for restitution must show that as a consequence of the erroneous judgment or decree, a party received the benefit.

• The erroneous judgment or decree must have been reversed in appeal.

Who may apply?

A person may apply for restitution who: 

• Was a party to the order or decree being varied, reversed, set aside, or modified.
• Is entitled to any benefit by way of restitution or otherwise in respect of the order or decree being varied, reversed, set aside, or modified.    

Against whom restitution may be granted?

The court may grant restitution against the party who has wrongly received the benefit under the erroneous decree or order of the court. The party receiving the benefit is under an obligation to make restitution to the party for what he has lost. 

Who may grant restitution?

The court which has passed the original decree or order may grant restitution on an application being made to it by the party who is entitled to benefit from such reversed or varied decree or order. 

What remedies court can grant?

The court under Section 144 can make any orders as a consequence of a decree or order being varied, reversed, modified, set aside for the refund of costs and for payment of interest, damages, compensation, and mesne profit.

Nature of proceeding

The nature of proceeding under Section 144 is execution proceedings. The process to get an order or decree into effect is called as execution proceedings.

Extent of restitution

Section 144 is not exhaustive but inclusive. Even if a matter does not fall within the scope of Section 144, the court has the power to grant restitution on its discretion.   

Inherent power to grant restitution

Under Section 151, a court has an inherent power to make such order as may be necessary for meeting the ends of justice or to prevent the abuse of the process of Court other than the power to grant restitution under Section 144. The power of the court to grant restitution is not confined only to the Section 144, the court has an inherent power to grant the remedy of restitution where Section 144 does not apply. There are different circumstances in which the court can order to restore the status quo ante (previously existing state of affairs) meet the ends of justice.

It was held in K.N. Krishnappa vs T.R. Gopalkrishna Setty that under Section 151 C.P.C, the inherent powers of the Court can be invoked for restoring the parties to the position in which they were, prior to the execution.

Bar of Suit

Section 144(2) bars a separate suit instituted for obtaining any remedy if restitution or other relief could be obtained by making an application under Section 144(1).

Res judicata

The principle of Res Judicata finds its root to the expression “Res Judicata Pro Veritate Accipitur” which means a thing adjudged is received as truth. Res Judicata means when a competent court has already adjudged a matter, that matter cannot be raised again or re-opened by the same parties on the same cause of action. The main purpose of res judicata is to bring finality to a judgment in the original or appellate stage. It is based upon the principle of public policy that there should be a limit to litigation and that no man should be vexed twice for the same cause.

Essential elements of Res Judicata:

• Parties to the former suit shall be parties to the subsequent suit.
• The court adjudicating the matter must have jurisdiction over the subject matter of the dispute.
• The judgment or order shall be final. 
• The judgment or order must have been on merits.

Under Section 11 of CPC, the principle of Res Judicata has been given statutory recognition. It provides that once a matter has been heard and finally decided by a court competent to hear and decide such matter then the parties cannot reopen the same matter in a subsequent suit. However, in case the matter in the previous and subsequent suit does not relate to the same parties or the same matter the provisions of this section will not be applicable.

Essentials of Section 11 of CPC 

No court shall try any suit or issue in which:

• The matter directly and substantially in issue in a former suit is directly and substantially the same matter in a subsequent suit;
• Litigation in the subsequent suit between the same parties in the former suit;
• Litigation in the subsequent suit must be for the same title in the former suit.
• The court should be competent to try such subsequent suit or the suit in which the issue has been subsequently raised;
• The court in which subsequent suit is initiated is one which has heard and finally decided the matter directly and substantially in issue in the former suit.   

Explanation I provides that “former suit” means a suit that has been decided prior to the suit in question.

Explanation II provides that the competence of a court has to be determined irrespective of any of the provisions with respect to the right of appeal from the decision of that court.

Explanation III says that the matter referred to in the former suit under Section 11 should be alleged by one party and denied or admitted by the other either expressly or impliedly.  

Explanation IV talks about constructive res judicata which is a subset of res judicata. Constructive res judicata means any claim which should or ought to have been raised in a previous proceeding (already decided) cannot be raised in a subsequent proceeding. Explanation IV provides that any matter which might and ought to have been made a ground of defense or attack shall be deemed to have been a matter directly and substantially in issue in such a suit.

Explanation V provides that for the purpose of Section 11, any relief claimed in the plaint which has not been expressly granted by the decree will be deemed to have been refused.   

Explanation VI refers to a case where persons litigating in a bonafide manner, claims a private right or public right, in common for himself and others, every person interested in such right shall be deemed to be claimed under the person litigating.     

Explanation VII: This explanation was added by Act 104 of 1976. It provides that Section 11 will now apply to execution proceedings.  

Explanation VIII provides that where a competent court of limited jurisdiction has heard and finally decided an issue, it shall operate as res judicata in a subsequent suit, even though the court of limited jurisdiction was not competent to try the subsequent suit or an issue subsequently raised.

Court of limited jurisdiction: It was held in Puthen Veettil Devoki vs Puthen Veettil Kunhi, a court of limited jurisdiction means any courts other than the ordinary Civil Court. Courts of limited jurisdiction would include Insolvency Courts, Land Acquisition Court, Revenue Courts, etc. They try specific matters and are therefore said to be Courts of limited jurisdiction. The decisions of these courts operate as a res judicata in the subsequent suits on the general principles of res judicata and not because of S.11. 

Bar of suit

Res judicata serves as an estoppel upon a previously decided judgment. Under Section 11, the trial of any issue or suit is barred which has been already heard and decided in the former suit.   

Appeal 

Res judicata does not prevent the process of appeals as they are part of the same lawsuit and are not a new suit. In Bhanu Kumar Jain v. Archana Kumar, the Supreme Court observed that it is a well-settled law that the principle of res judicata applies in different stages of the same proceedings.

Effect of the order being implemented

In Bai Chanchal v. Bai Suraj, the court held that If the suit which has been instituted is one in which the matter directly or substantially in issue in a former suit between the same parties, etc, then according to section 11, the court shall not try any such suit. Once the order has been made in a suit it will be considered as res judicata.

Conclusion

The principles of Restitution and Res Judicata ensures that the resources of the court are not unnecessarily wasted and that litigation is not dragged for a long time. If a similar issue or matter is re-opened over and over, there will be no end to litigation. It also puts an obligation upon the court to ensure that no litigant has suffered any loss by its act or omission

References

• The Code of Civil Procedure, 1908.
• https://indiankanoon.org.

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

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This article is written by Yamini Jain, a student of III year BA LLB at ILS Law College, Pune, and it provides a detailed analysis of ‘Abuse of Dominance: pricing practices’ along with relevant case laws.

Introduction

‘Dominance’ in Competition Law is the position of strength enjoyed by an undertaking which enables it to operate independently of competitive pressure in the relevant market and also to appreciably affect the relevant market, competitors and consumers by its actions.

Although dominance is a precondition for establishing a violation of Article 102 TFEU; Section 18 of the Competition Act, 1998; or Section 4 of the Competition Act, 2002, it is by no means a sufficient condition. Abuse of dominance is key for Competition Policy. In existing competition laws, there are two kinds of prohibitions of abuse of dominant positions:

• Actions of an incumbent firm to exploit its position of dominance by charging higher prices, etc; and
• Actions of an incumbent in a dominant position to protect its position of dominance by placing barriers for potential entrants in the relevant market.

This article shall illuminate upon the abusive pricing practices prohibited under the aforesaid provisions of the Competition Policy.

Cost concepts

An analysis of the pricing practices indulged into by a dominant undertaking to determine its abusive nature requires consideration of its costs. A price may contravene Article 102 where the prices charged & costs incurred differ excessively; where such discrimination lacks a cost-justification; or it may be unlawful where prices charged are below costs. Hence, it is essential to understand these cost concepts to determine such abusive practices. 

Fixed costs and sunk costs

‘Fixed’ costs are independent of output, ie., they do not vary with the quantity of output produced, whereas a cost is ‘sunk’ (over a given period of time) if it has been irrevocably committed (as of a given time point) and cannot be recovered. It has to be understood that all sunk costs are fixed but not all fixed costs are sunk, and hence they’ve been regarded as distinct concepts by economists[1].

Marginal cost

Marginal cost is the additional cost incurred in the production of one extra unit of a commodity/service, and is derived from the variable cost of production, provided that the fixed costs remain static when output changes. It enables an organization to determine its attainment of the economies of scale so as to optimize the production and overall operations. 

Variable costs

Variable costs are directly associated with the volume of production of goods/services, and can be calculated by multiplying the quantity of output by the variable cost of output per unit.

Avoidable costs

Avoidable costs are those incurred only when a product or activity is continued and its discontinuance will eliminate/reduce these costs, or those that have not been committed & can be recovered. These costs include some fixed and variable costs but omit common costs.

Average variable cost (AVC)

AVC is the variable cost per unit of output, and varies from average total cost in the long-run but not in the short-run. Hence, it assists a firm in deciding whether it should continue its operations in the short-run.

Average avoidable cost (AAC)

AAC is an average of the costs that could’ve been avoided if a company wouldn’t have produced a particular quantity of extra output, and since it includes some fixed costs, it may be higher than a firm’s AVC.

Long-run incremental cost (LRIC)

LRIC models provide for the cost of a whole service/defined increment on the basis of forward-looking costs incurred by an efficient operator, and aid in the decisions of future investments.

Long-run average incremental cost (LRAIC)

LRAIC is the average of all the costs, fixed & variable, that are incurred in the production of a particular good/service. In cases concerning activities protected by a legal monopoly, a presumption of predation prevails whence the prices are below LRAIC.

Average total cost (ATC)

ATC is an average of all fixed & variable costs including common costs, or the total cost per unit of output incurred when a company engages in short-run production.

Stand-alone cost

Stand-alone cost refers to the cost incurred in the production of a single product so that there would be no common costs as a result of other activities.

Exploitative pricing practices

Competition Law critically analyses the exploitative pricing practices indulged into via formation of a cartel to restrict output; excessive (supra-competitive) pricing; or concerted practices of oligopolists, etc. 

Arguments against direct control

The opinion that competition authorities ought to take direct steps under these provisions to control exploitative pricing consists of certain persuasive arguments against direct control of prices that include:

• If normal market forces have their way, in the absence of barriers, large profits gained by the monopolists should act as an incentive to attract entrants, as in the long-run such profits would be self-defeating. Acceptance of such a view ought to be accompanied with equanimity periods, where the market would eventually correct itself, and the intervention of competition authorities would cause undesirable distortion.
• There exist formidable difficulties as regards the determination of exploitative prices and their standards of assessment. Comparison of a monopolist’s price with a hypothetical ‘competitive price’ is as intuitive as a scientific matter, whereas the establishment of ‘reasonable’ price by the addition of a suitable profit margin to the actual cost of producing goods is fraught with various difficulties, such as what constitutes relevant costs, etc.
• A monopolist should be enabled to charge monopolistic prices to earn sufficiently large profits in view of carrying out expensive research work. Alternatively, an opinion of no objections against a monopolist gaining at the consumers’ expense is argued relying on the welfare loss attributable to the restrictions on output imposed by a firm with market power, or a loss to consumer welfare.
• Further, despite the arguments, even if direct control is accepted, a difficulty arises in the casting of a legal rule condemning exploitative pricing to enable a firm to predetermine its position as regards its legality.
• Complexity also arises as regards the crafting of pro-competitive remedies to deal with excessive pricing abuses.
• Finally, while a competition authority is required to possess necessary information for price regulation, which it may lack; it is even more difficult for the Court to determine the accurate level of prices.

Alternative to direct control

In consideration of these problems, the competition authorities resort to deploying their resources against exclusionary practices rather than establishing themselves as price regulators. It is suggested that in cases where a competition authority observes a particular raise in the prices than expected in competitive conditions, it should consider conducting a ‘sectoral review’ via available powers in order to discover the causal features of such a raise in the market. 

Approach in the EU and the UK

In dealing with the matter of high prices, the European Commission has relied upon a legislative mechanism rather than enforcement under Article 102; whereas the UK has established a system of ex-ante regulation of prices via its sectoral regulators. Though it can be seen that neither the EU nor the UK have the appetite of investigating high prices under these statutory provisions, yet in various cases, there have been investigations in both jurisdictions. 

EU Law

What is an excessive price?

Article 102 of TFEU provides that abuse by a dominant undertaking shall include directly/indirectly imposing unfair purchase/selling prices or other unfair trading conditions.  

Determining whether prices are excessive

Cost or price analysis

In the United Brands case, the Court stated that a price is excessive if it has no reasonable relation to its economic value. The issue to be determined is whether the difference between the actual costs incurred and prices charged is excessive and, if affirmative, to consider whether such price is inherently unfair or whence compared to other competing products.

Comparison of a dominant firm’s prices

In the Deutsche Post AG case, the Court determined abuse via an alternative benchmark by comparing the dominant firm’s prices in cross-border mail with its domestic tariff. It has been held in another case that a simple ‘cost-plus’ approach was insufficient to establish the existence of abuse since it is also essential to analyze the economic value of the service provided.

Yardstick competition

In the Bodson case, the Court described the technique of yardstick competition that is comparing the performance of one undertaking with that of the other ones. It stated that such a comparison could provide a basis for assessing the fairness of the prices charged.

Excessive or disproportionate costs should be ignored

In Ministère Public v Jean-Louis Tournier, before the Court of Justice, it was stated that excessive/disproportionate costs shouldn’t be taken into account while determining the reasonableness of prices.

Determining whether excessive prices are abusive 

According to the test laid down in the United Brands case, a price is abusive if the price-cost margin is excessive and is unfairly high compared to other prices.

Further objections to excessive pricing

Excessive pricing that impedes parallel imports and exports

Various applications and interpretations of Article 102 TFEU have been found in certain decisions of the Court (discussed below) as regards the harm that excessive pricing poses to the single market. 

Excessive pricing that is exclusionary

The aim of the Commission’s enforcement activity in relation to exclusionary conduct is to ensure that dominant undertakings do not impair effective competition by foreclosing their competition in an anti-competitive way, thus adversely affecting consumer welfare in the form of excessive pricing or reduction of consumer choice. Factors relevant for such an assessment are:

• Position of the dominant undertaking;
• Conditions of the relevant market;
• Position of the dominant undertaking’s competitors;
• Position of the customers/input suppliers;
• The extent of the allegedly abusive conduct;
• Possible evidence of actual foreclosure; and
• Direct evidence of any exclusionary strategy.

Excessive pricing and aftermarkets

Under economics, it cannot necessarily be assumed that the primary and secondary markets are always discrete. Where a situation of whole-life costing appears in the primary market, excessive prices in the secondary market may act as a competitive constraint to the initial decision of purchasing a primary product, and hence, the existence of a separate aftermarket may be examined while analysing these factors:

• Price & life-time of the primary product;
• Transparency of the prices for the secondary product; and
• The proportion of the price of the secondary product to the value of the primary one.

Buyer power – exclusively low prices

In CICCE v Commission of the European Communities, it was highlighted that similar to excessive pricing, extraction of an unfairly low price demanded by a dominant undertaking on the buying side of the market can also be abusive. 

UK Law

Section 18(2)(a) of the Competition Act, 1998 specifically states that an unfair purchase/selling price may constitute an abuse of dominance. 

Findings of excessive prices

• Napp Pharmaceuticals – Abuse of dominance was held upon the operation of a discriminatory discount policy, predatory price-cutting and excessive pricing based upon the margin between costs and prices;
• Pfizer & Flynn Pharma – The Competition Appellate Tribunal (CAT) set out the framework of the approach to be adopted in cases of this kind;
• A range of possible analyses should be considered to establish a benchmark price/range that’d pertain under conditions of normal competition;
• This price/range should be compared with other competitive prices to determine if they’re excessive;
• If such differential is found to be excessive, consideration should be made as regards its unfairness;
• If unfair, an assessment of the economic value of the product along with the issue of its reasonable relation to other prices should be considered in order to determine whether the dominant undertaking is reaping unusual benefits of such transactions; and
• Objective justification shall be considered[1].

Rejections of complaints about excessive pricing

In Thames Water Utilities Ltd/Bath House and Albion Yard, the OFWAT decided that there was no abuse of dominant position when an excessive amount was charged for the carriage of water to the customers.

Excessively low prices

The Office of Fair Trading (OFT) states that charging of excessively low prices may constitute abuse of dominance only under exceptional circumstances. In a case, the OFT concurred that paying of excessively low prices by offering a commission that failed to cover the costs incurred by another while it was not incumbent upon the company to cover such costs, did not amount to an abuse of dominance. 

Rebates that have Effects similar to exclusive dealing agreements

Overview

Pricing practices are known to have effects similar to that of exclusive purchasing agreements that may horizontally foreclose competitors of the dominant firm. A preliminary introduction to the concept includes:

Rebates, discounts & bonuses take many forms. In Intel v. Commission, a distinction was made between three types of rebates:

• Quantity rebates;
• Exclusivity rebates; and
• Third category rebates.
• The prohibition of both exclusivity & third-category rebates is directly associated with the law prohibiting exclusive dealing agreements by dominant undertakings.
• Rebates may be unlawful but not on the basis of their price-cost analysis, rather on exclusive dealing.
• The law that forbids exclusionary rebates is based on Article 102 wholly.

EU Law

Quantity and other permissible rebates

Quantity rebates are directly linked to the volume of sales to a customer and are presumptively lawful. In the Hoffmann case, the Court accepted that not all discounts should be deemed abusive, whereas in the Intel case it was held that quantity rebates reflect gains in efficiency & economies of scale made by a dominant firm. Rebates are permissible for prompt payments or to customers for rendering services, except when they’re loyalty payments for exclusivity. 

Exclusivity rebates and similar practice

The basic rule

In Hoffmann La Roche, the Court held the entering into exclusive dealing agreements with some customers and offering exclusivity rebates to others to be unlawful & abusive, and hence equated the two concepts.

Recently, in the Intel case, the ECJ has clarified that:

A dominant firm should be able to produce evidence that its usage of exclusivity rebates is not capable of foreclosing competition, upon which the Commission shall analyze the same having regard to:

• the extent of the firm’s dominant position;
• the share of the market covered by the arrangement;
• the conditions of granting rebates along with their duration and amount; and
• the existence of a potential strategy aimed at excluding at least as-efficient competitors.
• Even if found to be foreclosing competition, it is defensible on the ground of objective justification.

Meaning of Exclusivity rebates

Prior to the ECJ’s decision in the Intel case, it was a popular notion that exclusivity rebates are per se abusive and require customers to obtain most of their necessities from the dominant supplier. But the ECJ has swept this aside while stating that “not every exclusionary effect is necessarily detrimental to competition”, thereby shifting this concept from a form-based assessment to economic analysis[2].

Factors that are not relevant to establishing whether exclusivity rebates infringe Article 102 of TFEU

The factors considered irrelevant to establish an infringement of Article 102 via exclusivity rebates were illuminated in the Intel case:

• Evidence of actual foreclosure effects – only necessary to adduce evidence as regards the dominant firm’s incapability of foreclosure.
• Amount of the rebate;
• The short duration of the supply contracts and the right to terminate at short notice;
• The (small) portion of the market concerned in the relevant conduct – there is no ‘appreciable effect’/’de minimis criterion’ in respect of Article 102;
• The rebates granted in response to customer’s requests & buying power;
• The rebates cover only an insignificant proportion of the customer’s total requirement & apply only to a certain segment of the customer’s demand.

The AEC test, which was initially disregarded by the General Court in this case, was later accepted by the ECJ on appeal.

Objective justification

A dominant undertaking is entitled to argue that a loyalty/exclusivity rebate is objectively justified and proportionate, while the onus of proving this lies upon that firm.

Third category rebates

Rebates of this kind are neither quantity nor exclusivity rebates, but have an effect similar to the latter, and maybe unlawful depending upon an appraisal of all the circumstances of the case. It is essential in such cases to determine whether the rebate has a ‘loyalty-inducing/fidelity-building’ effect, and if so, whether that rebate could have an anticompetitive foreclosure effect.

Two steps involved in assessing third category rebates

Relying on its judgment in Michelin I, the ECJ in BA v. Commission, stated that the determination of whether a third category rebate is abusive shall be assessed in two steps:

• Determine whether those rebates can produce an exclusionary effect; and
• Examine whether there exists an objective economic justification for the discounts & bonuses granted.

Relevant factors for the assessment of the effects of third category rebates

Setting individualised targets

A rebate may have an exclusionary effect where a dominant undertaking sets a volume target according to the particular customer that could, practically, be met only if the customer acted as if there was a condition of exclusivity.

Length of the period by reference to which rebates are calculated

The longer the reference period, the more loyalty-inducing the quantity rebate system, since at the end of a longer period, customers are under a greater pressure to reach their target to avail the benefits of such rebates. 

Rebate is calculated by reference to the whole of the turnover

In the BA case, an individualised bonus scheme was discovered similar to that of ‘rollback/retrospective’ rebates, wherein the loyalty-inducing effect is a powerful one. Hence, in a state of uncertainty as to the extent of the rise in the profit margin with the dominant undertaking, the customer would have a strong incentive to remain in a static position and not deflect to other competitors. 

Lack of transparency in a system of rebates

Being an exacerbating factor, it makes the finding of abuse more likely. Contrarily, if a rebate is loyalty-inducing & abusive, it cannot be saved by the fact that it’s transparent. 

Objective justification

Objective justifications have their roots in the two-stage test of its conduct being necessary or that it produces substantial efficiencies. The question of whether such conduct is objectively necessary & proportionate must be determined on the factors external to the dominant undertaking, whereas on for efficiencies, the following conditions must be fulfilled:

• They are likely to be realised as a result of the conduct;
• Conduct is indispensable to the realisation of those efficiencies;
• They outweigh any likely negative effects on competition & consumer welfare in the affected markets; and
• Conduct does not eliminate effective competition.

The Commission’s Guidance on Article 102 Enforcement Priorities

The Commission, in the Guidance Article, discusses the issue of its intervention in relation to conditional rebates, that are granted as a reward for certain purchasing behaviour and can have foreclosure effects on competition. In assessing this, the Commission considers that:

• Price < AAC – rebate is generally capable of foreclosing as-efficient competitors;
•  Price  between AAC & LRAIC – other relevant factors should be taken into account to determine the possibility of anti-competitive foreclosure;
• Price > LRAIC – the rebate is generally not capable of anti-competitive foreclosure.

UK Law

In Napp Pharmaceuticals, the OFT held it to be ‘abuse of dominance’ whence large discounts were being offered to the hospitals while charging excessive prices to the community patients since it considered Napp’s intention to be of eliminating competitors and its reaction to its competitors was held to be unreasonable & disproportionate. Further, on appeal, the CAT found its discounts to be less than the costs, and hence, held such prices to be predatory.

Several cases concerning rebates have been closed since significant consumer detriment was unlikely and they were no longer an administrative priority.

Bundling

EU Law

Rebates having a tying effect

Tying and bundling are closely connected practices and encompass those whereby an undertaking supplies the tying product ensuring that the customer also obtains the tied product along with it. In Michelin II, the Commission found that a bonus scheme enabling the firm to leverage its position in the market to preserve its position in the neighbouring market amounts to an abuse of dominance. 

‘Across-the-board’ rebates

In Hoffmann, the ECJ condemned ‘across-the-board’ rebates since it dissuaded customers from obtaining its requirements from other as-efficient suppliers, and hence deemed such rebates to be in infringement of Article 102(2)(d). An incremental price below LRAIC suggests that an as-efficient competitor may be foreclosed from the market.

Delivered pricing as a tie-in

In the instant case, it was held that by reserving an ancillary market of delivery for itself as part of its activity in a neighbouring but separate market of sale, the firm had abused its dominant position beyond any objective justification. 

Bundling

A firm may sell two/more products together as a bundle and charge more attractive prices for the bundle than for the constituent parts of it. It may have the same effect as a tie-in agreement. 

UK Law

In BSkyB, it was illustrated that the behaviour of a dominant firm should be considered abusive only when it actually has/possibly can have an anti-competitive effect.

Predatory pricing

Introduction

Predatory price-cutting occurs when a dominant firm, in lieu of disciplining existing competitors or foreclosing new entrants, excessively reduces its prices to a loss-making level, and upon achieving this it raises its prices again thereby causing consumer harm, and hence infringes the provisions prohibiting abuse of dominance. The law on predatory pricing has to tread a fine line between not condemning competitive responses and prohibiting unreasonable exclusionary conduct of the dominant firm. 

Areeda and Turner Test

Areeda & Turner test is an economic test for the determination of predatory pricing and suggests that a price below the dominant firm’s AVC should be deemed to be predatory. It relies exclusively on a cost-price analysis and focuses on short-run rather than long-run efficiency.

EU Law

The rule in AKZO v Commission and subsequent cases

Predatory pricing was first considered in the Akzo case, and a rule was laid down by the ECJ to determine predation while rejecting the Areeda-Turner test:

• Price > ATC – not guilty of predation under the rule laid down in Akzo but the rule on selective price-cutting laid in Compagnie Maritime should be considered;
• AVC < Price < ATC – guilty of predation if they’re part of a plan to eliminate a competitor;
• Price < AVC – presumed to be acting abusively, rebuttable over objective justification. 

The Akzo test was reaffirmed in the cases of Tetra Pak II & France Telecom, and further developed in the Post Danmark case, wherein the Court held that pricing below ATC but above AVC is not per se anti-competitive and the point to be considered is whether the pricing policy, without objective justification, produces an actual/likely exclusionary effect to the detriment of competition and thereby of consumers’ interests. 

Intention to eliminate competition

Areeda-Turner test was argued upon its strictness, stating that pricing above AVC could be exclusionary in some circumstances, especially where there is proof of such intent. However, a rule requiring evidence of intention to eliminate would be reasonable where it has an objective quality based in economics. 

Is it necessary to show the possibility of recoupment?

The US law prohibits predatory pricing only if it can be shown that the predator has the ability to recoup any losses incurred. The EU Courts have not adopted a requirement of recoupment under Article 102. It affirmed this in the France Telecom case, by stating that proof of the possibility of recoupment of losses suffered by a dominant firm via price-cutting cannot constitute a precondition for establishing that such a pricing-policy is abusive. However, the Commission is not precluded from finding that this is a relevant factor in assessing abusive pricing practices. 

Defences

There are three kinds of objective justifications available as defences against predatory pricing:

• Meeting competition;
• Objective necessity and efficiency; and
• Product introductions, obsolete inventory and industry downturn.

Are the standards of AVC and ATC always appropriate?

A complex factor in the application of cost-based rules to determine predation is that AVC & ATC standards may not always be appropriate since in some industries fixed costs are very high while variable costs are very low. Consequently, the Commission suggested the use of LRIC models instead, which comes with arguments of its own. Hence, a ‘combinatorial approach’ of LRIC along with the stand-alone costs may be used. The first decision using this model was made in the case of Deutsche Post.

The Commission’s approach to predation in its Guidance on Article 102 Enforcement Priorities

The Commission states that a dominant firm engages in predatory conduct via deliberately incurring losses or foregoing profits in the short-run and causes anti-competitive foreclosure. Its view is that a price below AAC is a clear indicator of profit sacrifice, although avoidable losses would also have to be taken into account. It adds that only prices below LRAIC are capable of foreclosing as-efficient competitors and that disciplining a rival to prevent competition in the market may suffice.  

Predatory price cutting and cross-subsidisation

Cross-subsidisation may facilitate abusive pricing practices such as predation & selective price-cutting, and hence, it has to be determined whether cross-subsidisation is inherently abusive. It appears, in principle, that the existing rules on abusive pricing practices are sufficient to control the conduct of the dominant firms, consequently, the adoption of a rule forbidding cross-subsidy itself is unnecessary.

Selective price-cutting but not below cost

This contentious issue arises when a dominant firm cuts prices selectively, but not below the costs, to customers that might desert the competitor while leaving the prices at a higher level for other customers. This might amount to unlawful discrimination contrary to Article 102(2)(c). 

Eurofix-Bauco/Hilti

The Commission found the defendant guilty of abusing its dominance in a number of ways, such as bundling; quantity discounts to some customers; selective price-cutting; etc. It held that the pricing abuses, in this case, did not hinge on whether the prices were below cost, but on the issue of Hilti’s reliance on its dominance to offer discriminatory prices to its competitors’ customers to damage the other’s business.

Irish Sugar v Commission 

The General Court annulled the finding of the Commission that Irish Sugar had applied selectively low prices to potential customers of a competitor infringing Article 102, on factual grounds; however, it upheld the finding that Irish Sugar had been guilty of granting selective rebates to particular customers.

Compagnie Maritime Belge v Commission

It was held that the policy adopted by Belge was one of selective price-cutting intended to eliminate the competitor and that Article 102 was infringed. Non- discriminatory price cuts by a dominant undertaking which do not entail below-cost sales shouldn’t usually be regarded as being anti-competitive. However, the judgment made it clear that selective price-cutting is capable of being abusive in its own right. 

Post Danmark

• Confirms that selective price-cutting by a dominant firm is cannot be presumed unlawful without a detailed cost-based analysis of its capability of foreclosing competition.
• Departs from a central need to show anticompetitive intent, and underlines the importance of assessing the real risks of foreclosure of an as-efficient competitor.
• Objective justifications on necessities and efficiencies. 

UK Law

Napp Pharmaceutical

It was held that Napp was a super-dominant undertaking and had abused its dominance by charging prices below costs (AVC) to particular customers to ward-off a competitor, and hence, it was unnecessary to determine if this was done under a plan to eliminate competition.  

The Aberdeen Journals case

This case laid down several important points as regards the cost-based rules:

• The rules are not an end in themselves and shouldn’t be applied mechanistically;
• Significance of the time period over which costs are to be calculated;
• Recognition of objective justifications under certain circumstances.
• Intention – in the absence of exceptional circumstances, the longer a dominant firm charges below costs, the easier it will be to draw an inference of intent to eliminate competition.

English Welsh & Scottish Railway

In this case, the Office of Rail Regulation found that EW&S had abused its dominant position in a number of ways, including predatory pricing.

Cardiff Bus

In this case, OFT concurred that Cardiff Bus engaged in predatory conduct intending to eliminate certain rival competitors from the market, but did not impose any fine because of its small turnovers. Subsequently, those companies sued Cardiff bus for damages. 

Cases where predatory pricing was not established

• The Association of British Travel Agents and British Airways plc – OFT concluded that BA was not guilty of abusing its dominant position by reducing the commission it paid to travel agents for the sale of tickets for its flights since there existed an objective justification for this price differential.
• Complaint against BT’s pricing of digital cordless phones – OFCOM held that BT was not dominant. However, it also conducted an extensive analysis of whether it’d have been guilty of predation if it was in a dominant position, and concluded that this was not so.

Margin Squeeze

The economic phenomenon

A margin squeeze occurs when there is such a narrow margin between an integrated provider’s price for selling essential inputs to a rival and its downstream price that the rival cannot survive or effectively compete.

EU Law

Is the accused undertaking operating on an upstream and a downstream market?

The accused undertaking “squeezes” the margin between the price it charges for the input in vertically integrated markets, i.e., the upstream & downstream market, along with the price that its downstream operations charge to its own customers, so as to affect the efficiency of competition.

Does the accused undertaking hold a dominant position in the upstream market?

A vertically integrated undertaking that holds a ‘dominant position in the upstream market’ may cause price squeeze by:

• increasing the price for the upstream product;
• decreasing the price for downstream products; or
• doing both concurrently.

In reference to this, a dominant undertaking may restrict competition in the relevant market via transferring its market power over the upstream products to the downstream market.

Do the dominant firm’s upstream and downstream prices allow an undertaking as efficient as the dominant firm to compete on the downstream market?

In Konkurrensverket v TeliaSonera, the Court while rejecting the test laid down in Deutsche Telekom, held that considering the exclusionary effect a margin squeeze may create for as-efficient competitors, in the absence of any objective justification, it is in itself capable of constituting an abuse within the meaning of Article 102 TFEU. Further, it stated that the insufficient margin created by the dominant firm between its upstream and downstream products is the essence of this infringement.  

Is the margin squeeze capable of producing anti-competitive effects?

In Telefónica S.A. and Telefónica de Espaħa S:A:U: v. Commission, the Court stressed that Article 102 applies only to a margin squeeze that has exclusionary/anticompetitive effects, by stating that during the assessment of abuse the conduct of the dominant firm has to be considered. It held that the Deutsche Telekom case, considering margin squeeze as abusive conduct in itself, was to be regarded as a clear precedent to margin squeeze cases. Moreover, notwithstanding any legislation, if the dominator has the scope to adjust even its retail prices alone, the margin squeeze runs the risk of being considered abusive under Article 102 TFEU

Is there an objective justification for the margin squeeze?

The objective justifications available to a dominant undertaking against margin squeeze are: 

• greater effectiveness must be achieved as a direct result of the reviewed conduct;
• the conduct is necessary to achieve greater efficiency;
• consumers benefit from increased efficiency;
• competition has not been eliminated in a substantial part of the market.

The Commission’s decisional practice

In its Guidance, the Commission discussed its approach to margin squeeze alongside refusal to supply, by stating that it shall generally rely on LRAIC of the dominant firm’s downstream operations to determine foreclosure of as-efficient competitors and that it may use the LRAIC of a downstream competitor whence it is not possible to allocate the costs of a vertically-integrated dominant firm. It has taken action in relation to ‘margin squeezing’ in various cases, such as Napier Brown- British Sugar, Deutsche Telekom and Telefónica.

UK Law

Findings of unlawful margin squeeze

• In Genzyme Ltd., the CAT upheld a finding of margin squeeze against the dominant firm who squeezed the margin available to a competitor in a downstream market and found it guilty of abusing its dominance.  
• In Albion Water/Dŵr Cymru a judgment of the CAT was upheld, overturning a non- infringement decision by OFWAT, and finding that Dŵr Cymru was guilty of margin squeezing.

Rejections of complaints about margin squeezes

In BSkyB, after an extensive economic analysis, it was concluded that there were insufficient grounds for believing that its conduct was abusive, as was highlighted in many other investigations conducted by the OFCOM.

Price discrimination

The meaning of Price discrimination

Price discrimination arises when customers in variant market segments are charged dissimilar prices for the same good/service, for reasons unrelated to costs. It is effective only if customers cannot profitably resell the goods or services to others. 

EU Law

Article 102(2)(c) provides that the application of dissimilar conditions to equivalent transactions leading to foreclosure of competition amounts to abuse.

Does the accused undertaking have a dominant position?

Infringement of Article 102 can occur only if the accused undertaking is in a position of dominance in the upstream market, whereas its presence in the downstream market is unnecessary.

Has the dominant undertaking entered into equivalent transactions with other trading parties?

Article 102 does not necessitate all trading partners to avail the benefit of the same prices but requires examination of differential treatment where the compared transactions are ‘equivalent’, that may be determined via factors such as the nature of the product and the costs of supply. 

Is the dominant undertaking guilty of applying dissimilar conditions to equivalent transactions?

The dominant undertaking must have applied dissimilar conditions to equivalent transactions with other trading parties to constitute an offence of abuse of dominance under Article 102.

Could the discrimination place other trading parties at a competitive disadvantage?

Article 102(2)(c) specifically requires that the infliction of ‘competitive disadvantage’ be a component of the abusive conduct. In British Airways, the Court explicitly stated that it’s necessary to ascertain that the discriminatory behaviour in question tends to distort the competitive relation, either amongst the suppliers or amidst the customers.  

Is there an objective justification for the discrimination?

A dominant firm may take a defence of objective justification as it is believed that differential pricing may increase a dominant firm’s output and enable customers to obtain a product which they might not be able to afford otherwise.

UK Law

In the EW&S case, the ORR held the firm to be guilty of abusive dominance in a number of ways, including price discrimination between customers. Whereas, in BSkyB, the OFTEL concluded that any discrimination on the dominant firm’s part as regards the promotion of its broadband services did not have a material effect on competition.

Pricing practices that are harmful to the single market

The EU Law condemns pricing practices of dominant firms that are harmful to the single market. 

Excessive pricing that impedes parallel imports and exports

 High prices charged to prevent parallel imports infringe Article 102. In the BL case, the Court while condemning the disproportionate pricing, found that the purpose of excessive pricing was to impede parallel imports into the UK, which should be accounted for via single-market considerations. 

Geographic price discrimination

Geographical price discrimination was condemned in the case of Tetra Pak II, wherein the relevant geographic market was the whole EU and yet considerably variable prices were charged amongst different States, which was possible because of its policy of market compartmentalisation maintained by virtue of its other abusive practices. 

Rebates that impede imports and exports

Rebates and similar practices that have the effect of impeding imports & exports are condemned by the EU law. The decision in Irish Sugar was prompted by single-market considerations wherein border rebates were held unlawful, and the importance of the competitive influence on one national market from neighbouring markets was highlighted as the very essence of an internal market. 

Conclusion

Competition law has been extensively relied upon in cases of abusive pricing practices. Hence, in the modern era, it is suggested that the antitrust authorities, instead of aiming at direct regulation of prices, etc., focus on the preservation of structures & conditions whereby market forces constrain price and increase output, and hence, that the Commission uses its powers with great parsimony while the Courts set high standards of proof. 

References

• Wang, X. Henry, and Bill Z. Yang. “Fixed and Sunk Costs Revisited.” The Journal of Economic Education, vol. 32, no. 2, 2001, pp. 178–185. JSTOR, www.jstor.org/stable/1183493.
• RICHARD WHISH & DAVID BAILEY, COMPETITION LAW, (8th ed.).
• United Brands v Commission [1978] ECR 207, [1978] 1 CMLR 429.
• Deutsche Post AG v Commission, OJ [2001] L 331/40, [2002] 4 CMLR 598.
• Scandlines Sverige AB v Port of Helsingborg, COMP/A.36.568/D3.
• Corinne Bodson v Pompes funèbres des régions libérées SA, [1988] ECR 2479, [1989] 4 CMLR 984.
• Ministère public v Jean-Louis Tournier, [1989] ECR 2521, [1991] 4 CMLR 248.
• CICCE v Commission of the European Communities, [1985] ECR 1105, [1986] 1 CMLR 486.
• Napp Pharmaceutical Holdings Ltd & Subsidiaries v. Director General of Fair Trading, [2001] UKCLR 597.
• Thames Water Utilities Ltd/Bath House and Albion Yard v. Director General of Water Services, [2006] CAT 7.
• The Association of British Travel Agents and British Airways plc., [2003] UKCLR 136.
• Intel Corp. v European Commission, Case C-413/14 P.
• Hoffmann-La Roche & Co. AG v Commission of the European Communities.
• NV Nederlandsche Banden Industrie Michelin v Commission of the European Communities.
• British Airways plc v Commission of the European Communities, ECR 2007 I-02331.
• Manufacture française des pneumatiques Michelin v Commission of the European Communities, ECR 2003 II-04071.
• Napier Brown – British Sugar, OJ L 284, 19.10.1988, p. 41–59.
• BSkyB v. EDS, [2010] EWHC 86 (TCC).
• AKZO Chemie BV v Commission of the European Communities, ECR 1991 I-03359.
• Tetra Pak International SA v Commission of the European Communities, ECR 1996  I-05951.
• Post Danmark A/S v Konkurrencerådet, (C-209/10).
• Eurofix Bauco v. Hilti, OJ [1988] L 65/19, [1989] 4 CMLR 677.
• Irish Sugar plc v Commission of the European Communities, OJ [1997] L 258/1, [1997] 5 CMLR 666.
• Compagnie Maritime Belge SA v Commission of the European Communities, [1995] 5 CMLR 198.
• Aberdeen Journals Ltd. v. OFT, [2001] UKCLR 856.
• EW&S Railway Ltd, [2007] UKCLR 937.
• 2 Travel v. Cardiff Bus, [2012] CAT 19.
• Konkurrensverket v TeliaSonera,  [2011] ECR I- 000.
• Telefónica S.A. and Telefónica de Espaħa S:A:U: v. Commission, Case T-336/07.
• Genzyme Ltd v. OFT, [2003] UKCLR 950.
• Dŵr Cymru Cyfyngedig v Water Services Regulation Authority [2008] EWCA Civ 536, [2008] UKCLR 457.

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

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This article is written by Mehar Verma, a 3rd year law student from Jindal Global Law School. In this article, the author talks about the essential steps to ensure accused’s presence at the trial through issue of summons, warrants and proclamation.

Introduction

Every person, including an accused in a criminal case, has the right to be heard and the right to appear before the Court. A fair trial is the one where the accused is allowed to be present at the case and to ensure the attendance of the accused, the Court is required to issue a notice to all the accused in the suit through summons or warrants. If the accused still do not appear, then the Court can issue a proclamation. If the Court issues a summons under the Criminal Procedure Code to ‘A’, informing him about the charges against him and asking to appear before a court. If he fails to do so, the court will issue a warrant, asking a third person to procure ‘A’ to the Court. If ‘A’ absconds or voluntarily conceals himself, the Court will issue a notice of proclamation against ‘A’ and attach the property of ‘A’.

Importance of presence of accused at trial

The presence of the accused at trial is the fundamental principle of criminal procedure which ensures that the fundamental rights of the accused are not abridged. The accused’s presence not only helps in establishing the factual circumstances but also ensures that the accused has an effective right to defence. The physical presence of the accused at the trial allows him to participate in a meaningful and informed manner, right to present his case, right to cross-examine the witnesses and the right to be understood. Thus for the conduct of a fair trial, all proceedings of a trial should take place in front of the accused or his counsel and ex parte decisions should not be made in criminal proceedings. In the spirit of fair trial and ensuring the rights of the accused are not hampered, under Section 238 of the Criminal Procedure Code, the Magistrate must provide with all the necessary documents, including a copy of the charge sheet, statements of the witnesses and all other documents about the investigation to the accused. Section 273 of the Criminal Procedure Code provides that all evidence or other proceedings of the trial shall be taken in the presence of the accused or his pleader. Further Section 317 of the Code states that a Magistrate can proceed with the trial, without the presence of the accused only if it is necessary to do so in the interest of justice.

In Mohd. Hussain @ Julfikar v The State of Delhi, the accused was allowed to cross-examine only one witness, whereas there were fifty-six witnesses in total. The court held that the accused’s conviction must be set aside as it is not a fair trial and a person accused of a serious charge should not be denied to attend the proceedings.

Steps to procure the presence of the accused

As the presence of accused and hearing of both parties, is the essence of a free trial, an entire chapter of the Code deals with the process of ensuring attendance of all the defendants by serving a summons, warrant or proclamation, and attachment of property. After taking cognizance of an offence, the Magistrate has to decide whether a summons or a warrant should be issued for the attendance of the accused.

Summons of arrest

Summons is an order given by the court asking a person to appear before the court in criminal matters.

Form of summons

Section 61 of the Code provides the form of summons. Every summon shall:

1. Be in writing;
2. A duplicate copy should be made;
3. It should be signed by the presiding officer of such court or any other officer as may be prescribed by the High Court;
4. Have the seal of the court.

Form 1, of Schedule 2 of the Code provides the format of the summons and it contains the name of the accused, address of the accused, date of issuing the summons, the signature of the Magistrate and seal of the Court.

Summons how served

Section 62 of the Code provides the procedure of servicIng the summons. Clause (1) of the Section says that every summons shall be served by a police officer or any officer of the court, or other public servants, subject to the rules of the State Government in question.

Clause (2) of the Section states that the copy of summons should be served personally to the person summoned, if possible.

Clause (3) of the Section states that every person on whom a summons is served shall sign on the back of the duplicate copy if it is required by the serving officer.

Services of summons on corporate bodies and societies

As per Section 63 of the Code, summons on corporate bodies and societies may be effected by serving it to the secretary, local manager or any other principal officer of the corporation. The summons can be served through a letter or post addressed to the chief officer of the corporation in India. In such cases, the service of the summons is completed when the letters arrive in the ordinary course of the post.

In this section ‘corporation’ does not include a society registered under the Societies Registration Act, 1860, rather it only includes an incorporated company or other corporate bodies.

Service of summons when person serving cannot be found

Section 64 of the Code states that in cases where the person cannot be found even after due diligence, a copy of the summons can be served to an adult male member of his family residing with him. The Section also provides that if the serving officer feels necessary, he can get the duplicate copies signed.

Service on Government servant

Section 66 provides that in cases where the person summoned is a government servant, the court shall send a duplicate of the summons to the head of the office in which such person is employed. Thereafter, the head officer shall serve it upon the person summoned following the conditions laid down in Section 62 of the Code and shall return it to the Court under his signature. The signature of the accused serves as evidence.

Proof of service in such cases when serving officer is not present

The court requires proof of service of summons. Section 68 provides that in cases where the summons was issued outside the local jurisdiction of the Court, and in cases where the person who served the summons is not available at the hearing, in such cases an affidavit stating that the summons was made is to be presented before the Court. The affidavit and a duplicate of the summons are admissible evidence and the statements made in the affidavit are deemed to be true unless the contrary is proved.

Warrant of arrest

In cases where the summons are not complied with or if the offences are extremely serious, the court can issue a warrant. A warrant is an order given by the court to a third party, usually a police officer to procure a person before the Court. A warrant can be bailable as well non-bailable.

Form and contents of a warrant of arrest

Section 70 of the Code provides the form of warrant of arrest and duration. Every warrant of arrest shall:

1. Be in writing;
2. Be signed by the presiding officer;
3. Shall have the seal of the court.

The warrant shall remain in force until it is canceled by the Court that executed it.

Form 2 of Schedule 2 of the Code provides the format of issuing a warrant, it should contain the name and designation of the person or persons who execute the warrant, name, and address of the accused, date of issuing the warrant, the signature of the Magistrate and the seal of the Court.

Modes of execution of a warrant of arrest

Under Section 72 of the Code, a warrant of arrest is usually executed by a police officer. However, if immediate action is required and there are no police officers available at that point, the Court may direct any other person to execute the warrant.

This Section also provides that when a warrant is directed to more than one officer or person, then the warrant can be executed by anyone of them or all of them.

The procedure of arrest of a person with a warrant

The procedure for arrest of a person with a warrant is dealt with in Section 80 of the Code. When a warrant is issued outside the local jurisdiction of the court, the person shall be taken before the Magistrate or District Superintendent or Commissioner of original jurisdiction. However, if the place of arrest is within 30 km of the court which issued the warrant, then the person arrested would be taken to the court issuing the warrant itself. For example, the Metropolitan Magistrate of Delhi issues an arrest warrant of a person in Sonipat. However, the accused resides at the border of Delhi- Sonipat and his residence is within 30 kms from the Metropolitan Magistrate, then, in this case, the accused will be taken before the Metropolitan Magistrate of Delhi and not the Magistrate of Sonipat.

The procedure by Magistrate after the arrest

The person arrested has the right to appear before a Magistrate within 24 hours of arrest. Section 81 of the Code enumerates that if the offence is bailable and the person arrested is willing to give bail as required by the Magistrate, District Superintendent or Commissioner or if there has been a direction to endorse security on the warrant and the person arrested is willing to give such security, District Superintendent or Commissioner shall take such security or bail and forward a bond to the Court.

If the offence is non-bailable, the Chief Judicial Magistrate or the Sessions Judge may grant bail to the person arrested based on the information and documents procured before the Court.

Proclamation and attachment of the property

Proclamation means giving a final chance to the person to appear before the Court himself and is made when a person avoids warrants or absconds. A person is served with a proclamation notice at his residence or last known address giving him 30 days to appear before the Court and if he fails to do so, he has declared a proclaimed offender. Such a person may be arrested by any police officer in the country and his property may also be attached and sold.

Proclamation for person absconding

Clause (1) of Section 82 states that when a person absconds or is intentionally hiding so that a warrant cannot be executed, the Court may issue a written proclamation against such person, requiring them to appear at a specified time and place within 30 days of issue of such proclamation.

Clause (2) of the Section provides the procedure of publishing the proclamation:

1. It must be publically read in a place visible in the town or village where the person ordinarily resides;
2. It shall be attached to some part of the house in which the person ordinarily resides;
3. A copy of the proclamation is attached in the court house;
4. The proclamation may also be published in a daily newspaper if the Court thinks the same is necessary.

A statement in writing given by the Court is considered as admissible evidence that the proclamation was made. The statement contains that the requirement of this Section have been complied with and the date on which the proclamation was made.

Attachment of property of person absconding

Under Section 83, if the Court believes that the person against whom proclamation is issued, is going to dispose of his property or is going to remove the property from the local jurisdiction of the Court, the Court may order attachment of such property along with the issue of the proclamation.

If the property ordered to be attached is a movable property, the attachment under this section shall be made:

1. by seizure;
2. by appointing a receiver;
3. by an order in writing prohibiting the delivery of such property to the proclaimed person; 
4. by any or all of the above orders.

If the property in question is immovable and where the land paying revenue is made to the State Government, the property is attached through the collector of the district and in all other cases, the attachment shall be made:

1. By taking possession;
2. By appointing a receiver;
3. By prohibiting payment of rent to the proclaimed person;
4. By any or all of the above orders.

If the property attached is perishable in nature of includes live-stock, the Court can order immediate sale.

Claims and objections to attachment

According to Section 84 of the Code, if an objection is made by any person except the person proclaimed within 6 months of attachment of the property, claiming that he has an interest in the property attached, the Court is required to inquire about the claim or objection made.

The suit for such objection or claim can be made in the Court which issued the attachment or in the Court which made the attachment, if different.

Any person whose claim or objection is disallowed can appeal within one year from the date of such order.

Release, sale, and restoration of attached property

According to Section 85 of the Code, if the proclaimed person appears before the Court before the expiration of 30 days, the property attached is to be released.

If the proclaimed person does not appear, the attached property is at the disposal of the State Government. However, the Government cannot sell the property before the expiration of 6 months from the date of attachment unless the property is perishable and it is in the best interest of the owner to sell the property.

If within two years, the person who was proclaimed voluntarily comes before the court and proves that he did not abscond, rather he did not have any notice of proclamation made, the attached property is to be released and if it has already been sold, then the sale proceeds be delivered to him.

Conclusion

The Criminal Procedure Code gives due importance to the presence of accused at trial and thus an entire chapter of the Code deals with attendance of the accused. The court can issue summons asking a person to appear before the Court in the prescribed form. The summons is made in writing and a duplicate copy is to be signed and sealed by the Court. The summons can be served by any public officer of the Court or other public servants as may be prescribed by the State Government.

In cases where the summons are not complied with or serious offences, the court issues a warrant in the prescribed form. Just like summons, the warrant is also made in writing, sealed and signed by the Court.

If the accused tries to absconds and avoids warrants, the Court can issue a proclamation, giving a person a final chance to appear before the Court. If the Court seems necessary it can also attach the property of the person proclaimed.

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

The post Pre-Trial Procedure: Steps to Ensure Accused’s Presence at the Trial Under CrPC appeared first on iPleaders.