This article is written by Anubhav Pandey, where he has discussed how a couple can divorce his/her spouse by Mutual Consent in India.

It is not disputed that, as per Hindu law, divorce was not recognized as a means to put an end to marriage which was always considered to be a sacrament with only exception where it is recognized by custom.

Hindus after coming into force of the Hindu Marriage Act, 1955 can seek to put an end to their marriage by either obtaining a declaration that the marriage between them was not valid on the grounds (a person already has a spouse at the time of marriage, within prohibited degree of relationship, couples are not sapindas of each other) or other provision of Hindu Marriage Act, 1955.

Divorce Through Mutual Consent

Under the Hindu Marriage Act, 1955 both the husband and the wife have been given a right to get their marriage dissolved by a decree of divorce on more than one grounds specifically enumerated in Section 13.

Section 13-B (divorce by mutual consent ) makes provision for divorce by mutual consent on the ground that-

• Both the parties to the marriage have been living separately for a period of one year or more,
• They have not been able to live together, and
• They have now mutually agreed for the dissolution of the marriage.

Couples might find incompatibility between them and might file for a petition of divorce by mutual consent. It is a novel approach but, at times, situation arises where divorce by mutual consent becomes difficult.

Eg- where a husband tries to bargain on the conditions of divorce or times where wife out of conspiracy marries a person and demands big price for giving divorce through mutual consent (mostly involved with cases of 498A). [1]

Procedure to be followed for filing a petition of divorce by mutual consent-

•  Both the parties need to file together a petition seeking divorce before the District court.
• Before filing of the petition, married couple should make sure that they are living separately for a period of one year or more. After petition is allowed, parties are required for filing of statement.

If any party is not available, any such family member of such party may file the statement on his behalf. Once this is done, ‘First motion’ is established.

• Couple seeking divorce by mutual consent will have to give reason why they are not able to live together and mention in the petition that they have not been able to live together and that they have mutually agreed that the marriage should be dissolved.
• Court after a period of 6 months and not more than 18 months (cooling-off period) will give a date for listening to the parties.

If the case is withdrawn or the parties do not move to court at the given date(s), the petition stands cancelled. After hearing to the parties and on being satisfied, court may pass a decree of divorce declaring the marriage to be dissolved.

Paper Requirement

1. Income Tax returns (3 years),
2. Details of present income,
3. Birth and family details, and
4. The details of the assets.

Which court to approach? (jurisdiction)

• Court can be one where couple seeking divorce last lived.
• Court can be one where marriage was solemnized.
• Court can be one where wife is residing as of present.

Court is expected to confine its inquiry on the following aspects-

• Whether the marriage has been solemnized between the parties;
• Whether the parties have been living separately for more than a year before presenting the petition;
• Whether they were not able to live together at the time of presenting the petition and continue to live apart;
• Whether they had mutually agreed to dissolve the marriage before or at the time the petition was presented, and
• Whether the averments made in the petition are true and conditions under section 23 are fulfilled.

On making limited inquiry, if the Court is satisfied that aforesaid conditions are fulfilled, the decree of divorce deserves to be passed in such matter.[2]

Where before  marriage wife had sexual relation with someone else and as a result of it conceived a child, the court allowed for divorce by mutual consent when both the husband and wife agreed to it irrespective of the family opinion and pressure.[3]

What Happens When the Married Couples Are Living Separately for Many Years?

What happens when the married couples are living separately for many years?Does this account for a ground for a valid divorce?

Yes, it is a valid ground for divorce but, there is no provision under the Hindu Marriage Act which provides for automatic dissolution of marriage. The dissolution of marriage as per custom and usages is one of the modes of dissolution of marriage recognized under the law. In general, the marriage can be dissolved only by recourse to the provisions contained in the Hindu Marriage Act.

What Happens When Consent To Divorce is Obtained by Force, Fraud or Undue Influence?

1. The provisions of section 23(1)(bb) of the Hindu Marriage Act require the Court to satisfy itself that consent for divorce under section 13-B has not been obtained by force, fraud or undue influence.
2. It is court’s duty to figure out the reasonableness of the case and to ensure while looking at the facts that the consent is not viciously obtained. An appeal against the decree of divorce is allowed as there can be situations where even court fails to ensure that consent given for divorce is not free.[4]

What is significant in this provision is that there should also be mutual consent when they move to court with a request to pass a decree of divorce. The court shall be satisfied about the bona fides and the consent of the parties.

If there is no mutual consent at the time of the enquiry, the court gets no jurisdiction to make a decree for divorce. The court could make an enquiry and pass a divorce decree even at the instance of one of the parties and against the consent of the other.

Such a decree cannot be regarded as decree by mutual consent.

Is the Statutory Cooling Off Period of 6 Months Mandatory?

In many important cases, the apex court has taken the view that the statutory period of 6 months is meant as it will provide the couple seeking divorce to rethink on the issue and also will give more time to the family members so that, any chance of reconciliation, if possible, meets its end. [5]

• The said waiting period of six months can be waived in a suitable case because, in each case, it cannot be insisted that the parties should go through the futile and meaningless ceremony of again waiting for completion of six months.

Eg- where the applicants are already living separately for a period of 6 years. Therefore, when court is fully satisfied on the proved facts that marriage tie should be severed by mutual consent immediately, since the parties have been living separately for more than the time prescribed under section 13-B( 6 months) and that they have been fighting for sufficiently long period and, in such a case, instant decree of divorce can be granted.[6].

Maintenance to Be Awarded In Case of Divorce by Mutual Consent

In cases of divorce by mutual consent the alimony or maintenance is to be fixed by the party through mutual agreement.

• As per the agreement between the divorcing husband and wife (If they want it) a particular sum for alimony or maintenance is to be given either by the husband to wife or wife to husband as the case may be.
• Maintenance are generally decided on grounds such as-gross sum or such monthly or periodical sum for a term not exceeding the life of the applicant as, having regard to the respondent’s own income and other property.

Custody of Child After Divorce by Mutual Consent

Since, the divorce is by mutual consent the couple have to come to an agreement as of who will hold the custody of the child.

1. Joint custody is the new legal solution situations where a deadlock is created as both the parents want their offspring.
2.  A joint custody is such where only one of the parent will have physical custody while both will have legal custody.[7]
3. Child’s wish and interest are kept in mind by the court all throughout.

Bonus Read: What’re the grounds for dissolution of marriage?

New Scenario of Divorce by Mutual Consent

Today wives are not ready to merely live at the mercy of their husbands and the members of their family.

In 1978, a dispute as to the choice of matrimonial home had arisen between a husband and wife who were employed at two different places before their marriage. The question was as to whether the right to chose the matrimonial home is vested with the husband only or also with the wife.

“With more and more women taking up jobs and wanting to retain them even after their marriage, the question becomes increasingly important and controversial.”

There arose a dispute because of husband’s low financial status who was in Delhi and on the contrary wife’s excellent financial condition who was in Kanyakumari[8]. A solution of divorce through mutual consent was suggested in such situation.

Divorce by Mutual Consent in Case of Marriage with An NRI

• If the marriage is solemnized through Hindu law, divorce through mutual consent is the easiest way to get judicial separation as the country’s law on divorce when married to NRI is not strong enough.
• Both the couple if married under the Hindu law can approach the right court as mentioned in the above procedure and get a divorce by mutual consent.

That’s all about “Divorce By Mutual Consent In India” for now. I hope the article evoked you to think about divorce from a different perspective.

However, we’d love to know your point-of-view about the topic so, don’t wait! Drop your comments with the split of the hat in the comments box below & let the discussion flow

And Yes, Don’t forget to share the Article.

References:

[1] (1997) 8 SCC J-11

‘Irretrievable Breakdown of Marriage’ as Ground of Divorce — Need for Inclusion by BD Agarwall
[2] Mittal Ramesh Panchal v Nil, 2013 SCC Online Bom 1714
[3] 2015 SCC OnLine Cal 7170, Sri. Anupam Majhiv.Smt. Minu Majhi (Halder)
[4] Sushma v Pramod, 2009 SCCOnl Bom 399
[5] Subhasree Datta In Re,2008 2 CHN 303
[6] 2012 SCC OnLine Bom 1401
[7] http://www.businesstoday.in/moneytoday/cover-story/divorced-all-you-need-to-know-about-child-custody-rights/story/192716.html
[8] Swaraj Garg v. K.M Garg, AIR 1978 Del 296

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This article written by Anubhav Pandey highlights the duties of a Public Information Officer to provide with the information filed under RTI Act.

These are the 3 ways of filing an RTI-

One should always prefer to send the RTI to PIO as other two ways will add to the additional delay. 5 extra days when RTI is filed through APIO and 10-12 extra days when filed through other public authority.

Only in these cases one should opt for filing through APIO or through other public authority-

1. When one is not fully confirmed of address of PIO;
2. When PIO is in a different city and RTI application can be submitted to APIO by hand.

Additional Read: Analysis of Right To Information Act, 2005.

Information Exempted to be Disclosed Under RTI Act, 2005

If an RTI application is rejected, the proper reasoning of rejection along with the time period, within which an appeal against such rejection has to be made, and address of appellant authority with other particulars are to be provided by the Public Information Officer (PIO).

Grounds On Which An RTI Application Can be Rejected Are-

• When information affecting integrity, security, scientific, economic interest of India is concerned or regarding relation with a foreign country are sought.

• A person cannot ask the government its strategy which it has planned to adopt during a war.
• One cannot ask for a blueprint of the information regarding technical aspects of Indian space programs, e.g- asking for the mechanism of the functioning of the cryogenic engine from ISRO.

• In various cases, the court specifically orders the trial to take place in camera. E.g – rape cases, where court prohibits to publish any information regarding the victim. One cannot ask for such information as for his right granted under RTI Act. Information which has been expressly prohibited for publication by the court cannot be demanded as a right under RTI Act.

• Speaker of Lok Sabha, when thinks fit, might prohibit for publications of debates of the house for any reasonable reason. Such prohibited debates or in fact any material cannot be demanded as information under RTI Act.

• When some information demanded is capable of harming any third party, Public Information Officer might reject such application – regarding the disclosure of trade secrets or intellectual property.

Such applications are only entertained when the information seeks results in larger public good and a notice to such affected third party is issued by the Public Information Officer (PIO).

•  Information regarding fiduciary relationship is exempted from disclosure. If a person asks for medical reports of patients being treated in a government hospital, Public Information Officer possesses all such rights to reject requests seeking such information. Also, one cannot ask for cabinet papers.

• These institutions are not covered under RTI –

• Intelligence Bureau,
• Research & Analysis Wing,
• Directorate of Revenue Intelligence,
• Central Economic Intelligence Bureau,
• Department of Enforcement,
• Narcotics Control Bureau,
• Aviation Research Centre,
• Special Frontier Force,
• BSF,
• CRPF,
• ITBP,
• CISF,
• NSG,
• Special Service Bureau,
• Assam Rifles,
• Special Branch (CID) Andaman & Nicobar,
• Crime Branch (CID) Dadra And Nagar Haveli,
• Special Branch Lakshadweep Police.[1]

Duties of Public Information Officer

1.  If an information sought by anyone is regarding his life or liberty, such RTI is compulsory to be answered within a time period of 48 hours of the receipt of the request.
2. If out of various information sought, only a few are being answered by PIO then, it is the duty of Public Information Officer (PIO) to give a reason for not providing with the complete documents demanded and rights of the applicant with respect to review of the decision regarding non-disclosure of part of the information.
3.  On access to information, the RTI Act empowers citizen with the rights equivalent to a member of Parliament. The information which cannot be denied to any member of Parliament or State legislature cannot be denied to any person seeking RTI.
4. It is the duty of PIO to suo motu (on its own) declare information such as mentioned in the exhaustive list of section 4 of RTI Act.

RTI Act was passed by Indian Parliament on 15th June 2005, which came into force fully on 12th October 2005, to allow common people to access their right of “Right to Information.” There had been too many controversies, there had been fights but, RTI Act has sorted our lives in a way nothing else could.

Did you access your right of “Right to Information”? Out of the 3, through which media you filed RTI? How was the experience? Write to us by dropping a comment below. And yes, don’t forget to share the article.

Reference-

[1] Section 24 RTI Act, 2005 read along with Schedule II of RTI Act, 2005

The post What Are The Duties of A Public Information Officer? appeared first on iPleaders.

Join us for a webinar with Jay Sayta, Gaming Laws expert, on “Legalisation of casinos, online poker and other forms of betting” on Wednesday, 18th January 2017 between 5 – 6 PM.  

Gaming law is a set of rules and regulations that is applicable to the gaming of gambling industry. Gaming laws is evolving as a niche area of practice in India. Certain states like Sikkim, Nagaland, Goa and Daman & Diu have made casinos legal. Other states are contemplating legalising casinos to increase tourism potentials and revenues. 
 
In this webinar, we will be discussing:

1. What kind of gambling activities are legal in India?
2. Which states have legalised certain forms of gambling/skill games like poker?
3. How to start a casino in Sikkim? What are the legal compliances?
4. How to start an online poker business in Nagaland? What are the legal compliances?
5. Poker sport leagues and its legality
6. What are the GST implications of horse betting and other legalised form of gambling?
 

About the speaker

Jay Sayta is a law graduate from W.B. National University of Juridical Sciences (NUJS) Kolkata. Jay runs http://glaws.in/, India’s first and only website monitoring gambling, betting and lottery laws. Jay has researched and written extensively on gambling and betting laws for various online and offline publications/journals like The Statesman, Scroll, Swarajya. etc. In 2015, Jay filed a Public Interest Litigation (PIL) in the Bombay High Court to enforce the Maharashtra Casinos (Control & Tax) Act, 1976, a four-decade-old legislation that legalised gaming/casinos in the state of Maharashtra. Based on Jay’s PIL, the High Court directed the government to consider the implementation of casino legislation in a time-bound manner. 
      
Jay has also been quoted as an expert in various national and International publications. Jay currently acts as an independent policy consultant and advises on various areas of law relating to Gaming Laws.
 

The webinar will be accessible at startup.nujs.edu/webinars/

If you have questions for the expert, you can send your questions to amartya@ipleaders.in. 

For tech related issues and other support, you can email us at eablsupport@ipleaders.in.

Best regards,
Team iPleaders

The post Webinar on Gaming Laws by Jay Sayta appeared first on iPleaders.

In this blog post, Abdul Kalam Azad, a student pursuing M.A. in Business Laws from NUJS, Kolkata, describes the 10 things every Indian should know about Indian Civil Procedure Code.

Indian Civil Procedure Code

The law can be broadly classified as –

1. Substantive Law, and
2. Procedural Law.

The Substantive Law, whether it is based on statute law or common law, defines what facts are constituting a fact or liability.[1] To say, in other words, the Substantive law defines various principles regarding the rights and liabilities. (Example: The Indian Penal Code, 1860 which describes various offenses punishable under Criminal acts).

On the contrary, the Procedural law or adjective law, on the other hand, prescribes the procedure and machinery for the enforcement of those rights and liabilities. To say, in other words, the procedural law is concerned with enforcement of those rights and liabilities determined in accordance with the rules of the substantive law.[2] (Example: The Code of Civil Procedure 1908, The Code of Criminal Procedure, 1973 etc).

The Law regulating the procedure to be followed in civil court is governed by the Civil Procedure Code and this Civil Procedure Code is one of the most important branches of the procedural law.

As we all know, “Ignorance of law is not a defense” and every Indian should know the laws of this nation.

The following are 10 important things every Indian should know about Civil Procedure Code 1908.

1. Civil Procedure Code: Historical Background

Till 1859, in India, there was no uniform codified law for the procedures to be followed in Civil Courts. In those old days, under the British rule, there were Crown Courts in Presidency towns and Provincial Courts in Mofussils.

• These Courts in Mofussil areas and Presidency towns were governed by different systems of Civil procedure through various rules, regulations and special acts and those were changed on time to time basis on the basis of circumstances and needs.[3]

• For the first time in 1859, a uniform civil procedure Code was introduced by passing the Civil Procedure Code (Act VII of 1859). But this code could not serve the purpose as this code was not made applicable to the Supreme Courts (Crown Courts under the Royal Charter) and the Sadar Diwani Adalats (Principal Courts under the Judicial Plan by the Governor General).

• In 1861, the Indian High Courts Act was passed and the Supreme Courts and Sadar Diwani Adalats were abolished.[4] Then the High Courts were established by replacing the Supreme Courts at Madras, Bombay and Calcutta. Then the Civil Procedure Code 1859 made applicable to these newly established High Courts.

• The Code of 1859 was amended regularly from time to time and was replaced by passing the Civil Procedure Code, 1877. This code of 1877 was amended in 1878 and 1879 and the third civil procedure Code was enacted in 1882, which replaced the previous code. The Code of Civil Procedure 1882 was also amended several times and ultimately the present code of Civil Procedure, 1908 was passed overshadowing the defects of the Code of 1882.

a)  Civil Procedure Court: Meaning and Object

The Law relating to the practices and procedure to be followed in the Civil Courts is regulated by the Code of Civil Procedure, 1908. The word CODE means ‘a systematic collection of statutes, body of laws so arranged as to avoid inconsistency and overlapping‘.

The main object of this civil procedure code is to consolidate and amend the laws relating to the procedure and practices followed in the Civil Courts in India. As such, it was enshrined in the preamble of the code that it was enacted to consolidate and amend the laws relating to the procedure to be followed in the civil courts having civil jurisdiction in India. The Civil Procedure Code regulates every action in civil courts and the parties before it till the execution of the degree and order.

The Aim of the Procedural law is to implement the principles of Substantive law.[5] This Code ensures fair justice by enforcing the rights and liabilities.

b)  Extent and Application

The Civil Procedure Code was passed in 1908 and came into force from 1st January 1909. The Code is applicable to the whole country except –

1. The State of Jammu and Kashmir
2. The state of Nagaland and the tribal areas[6]

There is also a provision that the concerned state governments may make the provisions of this code applicable to the whole or part of the State of Nagaland or such tribal areas by notification in the official gazette.

This code is applicable in the scheduled areas of the erstwhile State of Madras (Lakshadweep), the East Godavari, West Godavari and Visakhapatnam agencies (Now in Andhra Pradesh State).

2. Civil Procedure Code: Scope

The Code is exhaustive on the matters directly dealt by it but it is comprehensive in other issues. The framers of the code could not foresee the possible circumstances which may arise in the future litigations and could not provide the procedure for such situations. Hence the framers of the code (legislature) provided inherent powers to the court to meet such circumstances (where the code could not provide a procedure) according to the principles of natural justice, equity and good conscience.

As this Code is a general procedural law, it does not contradict with the local or special law in force. In the event of any conflict between the civil procedure code and the special law, the special law will prevail over the civil procedure code. In case the local or general law is silent on any matter, then the provisions of the civil procedure code will prevail.[7]

3)  Civil Procedure Code: Scheme

The Code has two parts and they are –

1. The Body of the Code
2.  The Schedule

The Body of the Code has 12 parts containing 158 sections.[8] The Schedule is the second part containing orders and rules.

The Body of the Code lays down general principles relating to Power of the court, and in the case of the second part, that is, the Schedule provides for the procedures, methods and manners in which the jurisdiction of the court may be exercised.

In fact, there were five schedules when this code was enacted. Later the Schedules II, III, IV and V were repealed by the subsequent amendments of the code. The

• The first schedule which is the only schedule to the code now has 51 orders. Each order contains rules that vary in numbers from order to order. There are eight appendices giving model formats (Forms), such as –

• Pleadings (Plaint and Written Statement formats)
• Process formats
• Discovery, Inspection and Admission
• Decrees
• Execution
• Supplemental Proceedings
• Appeal, Reference and Reviews
• Miscellaneous

• The various High Courts are empowered to alter or add any rules in the schedules under Section 122 to 127, 129, 130 and 131 and such new rules should not be inconsistent with the provisions of the body of the code.[9]
• The Provisions of the Body of the code can be amended only by the legislature and the Courts can not alter or amend the body of the code.

4) Civil Procedure Code: Salient Features

It is a territorial law. It extends to whole of India except –

1. The State of Jammu and Kashmir
2. The State of Nagaland and the tribal areas

It also gives a provision that the concerned state government may extend the provisions of the Civil Procedure Code by notifying in the Official Gazette.[10] The code can be extended to the whole state or any part of the state using this provision.

• The Civil Procedure Code made the procedure to be followed in the Civil Courts very simple and effective. Enforcement of rights, liabilities and obligations of the citizens are dealt by this code. To say, in other words, the Civil Procedure Code provides the mechanism for enforcement of rights and liabilities.

• The Civil Procedure Code is a general law and will not affect local or special laws which are already in force. In case of any conflict with local or special laws, the local or special law will prevail over the Civil Procedure Code. In case, if the local or special law is silent about any particular issue, then the Civil Procedure Code will apply.

• The Civil Procedure Code has been amended several times to meet the needs and requirements which are dynamic and changing from time to time. Between 1909 to 1976, the Code has been amended for more than 30 times.

The Amendments of 1999 and 2002 brought in many changes to the procedure to be followed.

5) Changes brought by Amendments of 1999 and 2002

The main object of the amendments is to ensure fair and natural justice and providing a speedy remedy by eliminating untoward delay in disposal of the cases.

According to the amendment,

• Summons should be delivered to the defendant within 30 days from the date of filing of the suit.

• The written statement should be filed within 30 days. The court may extend this period up to 90 days. [11]

• The penalty for non-appearance and default has been increased to Rs.5000/-

• In case of decree for payment, if the judgment debtor does not pay, he can be detained in civil prison.  If the default is for payment up to Rs.2000, he will not be detained in civil prison.

•  In case of attachment while executing a decree, the monthly salary up to Rs.1000/- and two third of the remaining salary exceeding Rs.1000/- will not be attached.

• The amendments paved the way to the new and efficient methods for settlement of disputes, like Arbitration, Conciliation and Mediation. Lok Adalat is a very good example for this.

•  There is a provision for the defendant to get compensation for the expenses incurred, loss or injury including the loss of reputation caused to him because of his arrest or attachment of his property.

• After the amendments, if the value of subject matter of the suit is below Rs.1000, such disputes cannot be appealed.

•  If the case is adjudicated by a single judge of a high court whether in the original or appellate jurisdiction, no appeal will be entertained against the order of the single judge of the high court.

• There is no second appeal if the subject matter of the suit is for the recovery of money not exceeding Rs.25,000/-

• The Court may adjourn the framing of issues for a period not exceeding seven days while examining the witnesses or examining the documents presented before the court.

• Any party to the suit will not be given more than 3 adjournments during the hearing of any suit.

• The Court will pronounce the judgment once the trial is over. The Court shall endeavor to pronounce judgment within 30 days from the conclusion of hearing. But, in the case of exceptional or extraordinary circumstances, the court may fix a day beyond 30 days but before 60 days from the conclusion of the hearing.

6) Difference between Decree, Judgment and Order

When a Court adjudicates a dispute, after the hearing, it has to either pronounce its decision by way of a decree or dismiss the case. Such decision is called Decree. While arriving to such decision, the court will explain the grounds because of which the court came to such conclusion. Such grounds for the decision is called Judgment.

An Order is also a decision of the court but which will not come under the head ‘Decree’. [12]

1. An order will not determine the rights or liabilities of the parties.
2. Any number of orders can be passed in one suit.
3. The Order can be passed on a suit as well as on application.
4. There are –

•  Appealable orders.
•  Non-appealable orders.

There are no second appeal for the Appealable orders.

To constitute a decree, there should be an adjudication by a court in which the rights or liabilities of the parties have been determined conclusively. It should have been formally expressed by the Court.

7) Jurisdiction & Important Doctrines

Jurisdiction means the authority through which a court entertain suits, appeals and applications, and the court administer justice according to the provisions of the law.

Jurisdiction of the Civil Court may be categorized as follows –

1. Territorial or Local Jurisdiction
2. Pecuniary Jurisdiction
3.  Jurisdiction over subject matter
4. Original and Appellate Jurisdiction

• Territorial or Local Jurisdiction: Every Court has a territorial limit beyond which it cannot exercise the power vested upon it. This limit based on the territory is called territorial jurisdiction. Example: The district judge at East Godavari District can exercise his powers only within the district of East Godavari. He cannot exercise his powers in any other district. In the same way, the High Courts will exercise the powers within the state in which it is situated and the neighboring Union Territories attached with the same High Court.

• Pecuniary Jurisdiction:  Pecuniary means “involving money“. Civil Courts, according to their grades, have some limitation to try suits and entertain appeals for the value of money not exceeding some stipulated amount. The High Courts and the Court of Sessions have unlimited pecuniary jurisdiction. Junior Civil Judges have pecuniary jurisdiction of Rs.3,00,000 and Senior Civil Judges have pecuniary jurisdiction of Rs.10,00,000.

• Jurisdiction over the subject matter: There are civil courts established to try suits or cases of particular nature. For example, the small cases courts can try only non-contentious cases, like suits relating to promissory notes etc.

• Similarly, there are Industrial tribunals and labor courts having jurisdiction to try suits related to industrial and labor disputes only.
• The Administrative tribunals are there to try only the service related matters of the Government employees. These tribunals are not courts but they have been conferred judicial powers to try the matters and enforce the orders

• Original and Appellate Jurisdiction:

The Court in which the suit is filed initially and if the court has jurisdiction to try the original suits (the initial suit regarding the subject matter), such jurisdiction is called original jurisdiction.

Once the case is decided, the aggrieved party may prefer an appeal in appropriate court. Such jurisdiction of the court to hear the appeal is called the Appellate jurisdiction. The Supreme Court, High Court and District Courts are having both original and appellate jurisdiction and can hear both appeals and original suits.

Important Principles:  There are some important principles related to jurisdiction of courts. These principles are there to improve the efficiency of the courts and to avoid any delay.

•  Res Sub-judice:

‘Res‘ means “a matter“. ‘Sub-judice‘ means “pending judicial inquiry“. The expression ‘Res Sub-judice’ means “a matter which is pending judicial enquiry”.

According to Section 10 of the Civil Procedure Code, 1908, when a suit is pending before a competent court, between the same parties and under the same title then, no other court in India should entertain and try such suits.

This Section 10 of the Civil Procedure Code, 1908 is based on the principle “Res Sub-Judice” and the object of this section is to prevent multiple instances of suits relating to the same issue between same parties. This prevents the courts from trying two parallel suits simultaneously. [13]

•  Res Judicata:

‘Res‘ means “a matter“. ‘Judicata‘ means “already decided“. The expression ‘Res Judicata’ means “a matter already decided by a competent court“.

Section 11 of the Civil Procedure Code, 1908 deals with the Res Judicata. According to Section 11, a court shall not try any issue in which the parties and subject matter are same and already been decided by a competent court.

This is based on the following principles:

1.  A person should not be vexed twice for the same cause.
2. There should be an end to a litigation, in the interest of the state.
3. Every decision of the court must be accepted as correct and conclusive.

Sometimes Res Judicata is considered as a kind of Principle of Estoppel. Estoppel is related to evidence, and it stops a person from saying some other thing contrary to what he has said earlier. [14]

Additional Read: Exclusive Jurisdiction Clauses

8) Interlocutory Applications

The Civil Procedure Code provides for many interlocutory applications under various sections and rules. Interlocutory applications are used in almost every civil proceedings. It is usually considered as an integral part of the suit.

Usually, from the time of institution, till the disposal of suits, any number of interlocutory applications can be filed. These applications are essential to the efficient and judicious disposal of suits. An Interlocutory application can be filed by any party to the suit and is indicated by abbreviation ‘I.A.’ and consequently numbered.

If a party files an interlocutory application, the opposite party will be given an opportunity to file the counter for the same. [15]

9) Special Suits

•  Suits by Indigent Persons:

When a suit is filed before a competent civil court, the party has to pay the prescribed court fee. If the suit is filed without the prescribed court fee, the suit is liable to be rejected.

In some cases, the plaintiff may not be able to pay the prescribed court fee due to poverty, etc. In such circumstances, to help such persons to protect their rights, the Civil Procedure Code, 1908 has provisions under Order XXXIII to provide an exemption from the court fee. An Indigent person is the one who is poor and cannot afford to pay the court fee. This kind of suits are also called as “Pauper Suits”.

• Inter-Pleader Suits:

In fact, “Inter-pleader Suits” is not defined in the Code of Civil Procedure, 1908. ‘Inter-plead’ generally means to litigate with each other to find a solution concerning a third party.

In “Inter-pleader” suits, the dispute is not between the plaintiff and defendants. In fact, the plaintiff in such suits has no interest in the subject matter of the dispute. The dispute is between the defendants and they inter-plead against each other. [16]

For Example: ‘X’ is having lawful possession of a Gold Chain in which he has no interest. ‘Y’ and ‘Z’ are independently claiming the Gold Chain. ‘Y’ is claiming that he is the rightful owner of the Gold Chain and ‘Z’ claims the same. In such circumstances ‘X’ sues ‘Y’ and ‘Z’ to find out the decision of the court as to the ownership of the Gold Chain. In such suits, defendants ‘Y’ and ‘Z’ will adversely claim and litigate. Plaintiff ‘X’ will be silent and be the spectator in such disputes. Hence the real dispute lies between the defendants in the “Inter-pleader” suits.

In “Inter-pleader” suits, the plaintiff must be in lawful possession of a property belonging to some other person. The property may be movable or immovable, and the plaintiff must not have any interest in the property. There shall be two or more claimants for the property and the plaintiff must be ready to hand over the property to the right claimant based on the decision of the court.

10) Appeals & Other Important Provisions

When a suit is heard by the trial court, the trial court enquires the issue, arrives at a conclusion and pronounces a decree either in favor of the plaintiff or the defendant.

In such suits, the aggrieved party may prefer to appeal against the decision of the trial court. The term ‘appeal‘ is not defined in Civil Procedure Code, 1908. An Appeal cannot be claimed as the inherent right and can be preferred only where it is expressly provided by the statute. But any person can bring in a suit of civil nature as it is an inherent right.

Reference:  Section 113 and Order XLVI of the Code of Civil Procedure, 1908 deals with reference. Reference means referring a case to the higher court to seek the opinion of the higher court when there is a doubt in the question of law.

Review: Section 114 and Order XLVII of the Code of Civil Procedure, 1908 deals with the Review. According to this, a Court may reconsider a decision given by the same court. But a court cannot review its decision Suo moto. [17]

Revision: Section 115 of the Code of Civil Procedure, 1908 deals about Revision. The Higher Courts have revision jurisdiction and can call for the record of any case which is already decided. This power is given for the efficient exercise of supervisory jurisdiction of Higher Courts.

Conclusion

To enable the courts to deliver impartial and unbiased justice, the Code of Civil Procedure, 1908 provides simple and clear procedures to be followed by the Civil Courts. In case of no provisions relating to some issue or matter, the court will not be able to decide efficiently.

Hence the Code of Civil Procedure, 1908 incorporated the provisions for inherent powers. When there is no legislation, the court, in the interest of justice may exercise the discretionary power by acting beyond the powers conferred on them under the Code of Civil Procedure. It is called the Inherent powers of the Court.

The Code of Civil Procedure is one of the important branches of procedural laws and it is the one regulating the procedure to be followed by the Civil Courts in India. Although it may have some limitations, but it is still efficient, simple, clear and enables the courts to deliver impartial justice.

Also Read:

• Analysis of the Code of Civil Procedure.
• Relationship b/w Arbitration & Code of Civil Procedure

What are your views Indian Procedure code? Drop a comment & Share the post with your friends.

Works Cited – Bibliography

Sir Dinshaw Fardunji Mulla: The Code Of Civil Procedure (Abridged).

Sarkar’s: Civil Court Practice & Procedure Manual. Second edition, 2015.

Das J K: Code of Civil Procedure.

D.N. Mathur: Code of Civil Procedure. Third Edition, 2015

Y.P.Bhagat: The Code of Civil Procedure with Exhaustive Case Law. 2012

Ministry of Law & Justice: Law Commission of India – 163rd Report on Amendments on The Code of Civil Procedure (Amendment) Bill, 1997

References –

[1] Mulla – The Code Of Civil Procedure
[2] Mulla – The Code Of Civil Procedure
[3] Herbert Cowell – The History and Constitution of the Courts and Legislative Authorities in India
[4] K. Rai – History of Courts, Legislature & Legal Profession of India
[5] LexisGreen Civil Procedure: Law Books & Bare Acts on a Pen Drive
[6] LexisGreen Civil Procedure: Law Books & Bare Acts on a Pen Drive
[7] Sukumar Ray – Textbook On The Code Of Civil Procedure
[8] Bare Act – Code of Civil Procedure, 1908
[9] Bare Act – Code of Civil Procedure, 1908
[10] LexisGreen Civil Procedure: Law Books & Bare Acts on a Pen Drive
[11] Bare Act – Code of Civil Procedure, 1908
[12] Mulla – Code of Civil Procedure (Abridged)
[13] Sarkar’s – Code of Civil Procedure
[14] Dr V Nageswara Rao – The Indian Evidence Act
[15] V S R Avadhani – A Treatise on Interlocutory Applications
[16] The Law Times Reports – Volume 27 – Page 334
[17] M.P. Jain – The Code Of Civil Procedure-Incorporating The Commercial Courts, Commercial Division And Commercial Appellate Division Of High Courts Act, 2015 As Applicable To Commercial Dispute

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In this Article Anubhav Pandey gives an insight into the Citizenship Law in India.

In the midst of all the controversies regarding movie stars changing their nationality, there is a lot of confusion regarding citizenship law of India. People often confuse OCI (Overseas citizenship of India) and PIO (People of Indian Origin) as dual citizenship. What is the citizenship law in India? Who is an Indian? How to become an Indian citizen? How to renounce Indian Citizenship? A detailed blog on citizenship laws of our motherland and what it requires to be an Indian.

Citizenship Law in India

Citizenship law in India is governed by the Citizenship Act 1955 and The Constitution of India. India is one of few countries whose citizenship law is incorporated in the constitution itself. Due to unavoidable circumstances arose because of the partition of India and Pakistan and the freedom of Indian state to either join the Union or leave it, the citizenship law had to be incorporated in the constitution itself.

Defining Citizen,

A citizen of a given state is a person who enjoys full membership of the political community of a state.

 

• A citizen is very different from a person who is merely residing in the land. A citizen enjoys voting.
• A citizen who enjoys voting rights, as well as, the right to various government services, are reserved for citizen only.

Constitution Defining Citizenship

Part II (Article 5-11) of the Indian Constitution defines citizenship and few ways of acquiring it.

• Citizenship by Domicile

Domicile is an essential requirement for acquiring Indian Citizenship. Domicile means a permanent home or place where a person resides for a long duration of time.

There is a margin of difference between Residence and Domicile.

Domicile can be categorized into two –

• By Birth.
• By Choice.

To be entitled to Citizenship by Domicile there are three conditions which need to be fulfilled-

1. He must have been born in territory of India.
2. Either of his parents must have been born in territory of India.
3. He must have been ordinarily residing in India for not less than five years immediately preceding the commencement of constitution.

Domicile is different from citizenship. The person may possess one nationality and different domicile.

 

• A person is free to give his domicile in case he wants to acquire citizenship of any other nation.
• Domicile is different from citizenship. The person may possess one nationality and different domicile.

Persons Who have Migrated from Pakistan to India Before the Commencement of Constitution

Immigrants who came to India before 19th July 1948 can be called a citizen of India if the following two conditions are fulfilled-

1. The immigrant or either his parents or any of his grandparent was born in India as defined in the Government of India Act, 1935.
2. The immigrant has been ordinarily residing in India since the day of his migration.

Immigrants who came to India After 19th July 1948 need to fulfill the following conditions to be called an Indian citizen-

• The immigrant or either his parents or any of his grandparent was born in India as defined in the Government of India Act, 1935.
• He has to make an application for citizenship.
• He must prove that he has resided in India for six months.
• He must be registered as a citizen by an officer appointed by the government.

A person who after 1 March 1947 migrated to Pakistan will cease to be a citizen of India.

• Even if a person is a citizen of India by the virtue of above laws, he will cease to be an Indian citizen if he has migrated to India after 1st March 1947.
• An Exception is made in favor of a person who has returned to India on the basis of the permit for resettlement in India. The immigrant or either his parents or any of his grandparent was born in India as defined in the Government of India Act, 1935.

Citizenship Right of Persons of Indian Origin Residing Outside India

Indian citizenship can be granted to persons who on the face of it had no domicile in India on fulfillment of certain condition.

• The person whose parents or grandparents were born in India but are residing abroad.
• The registration of that person as a citizen of India by the diplomatic or consular representative of India in the country where they are residing is necessary.

Person Voluntarily Acquiring Citizenship of a Foreign State Not to be Citizens.

A person who has voluntarily acquired citizenship of a different state shall not remain a citizen of India. A foreign state means a state other than India.

Citizenship law as Governed by Indian Citizenship Act, 1955

• Citizenship by Birth

A Person Born in India shall be Citizen Under the Following Condition –

1. On or after the 26th day of January 1950 but before the 1st day of July, 1987.
2. On or after the 1st day of July, 1987, but before 7th july 2004 and either of whose parents is a citizen of India at the time of his birth.
3. After 7th july 2004 where both of his parents are citizens of India or one of whose parents is a citizen of India and the other is not an illegal migrant at the time of his birth, shall be a citizen of India by birth.

A person shall not be a citizen of India by virtue of this sec­tion if at the time of his birth—

1. Either his father or mother possesses such immunity from suits and legal process as is accorded to an envoy of a foreign sovereign power accredited to the President of India and he or she, as the case may be, is not a citizen of India.
2. His father or mother is an enemy alien and the birth occurs in a place then under occupation by the enemy.

• Citizenship by Descent

A person born outside India shall be a citizen of India by descent—

• On or after the 26th day of January, 1950, but before the 10th day of December, 1992, if his father is a citizen of India at the time of his birth.
• On or after the 10th day of December 1992, if either of his parents is a citizen of India at the time of his birth –provided that if the father of a person referred to in clause (a) was a citizen of India by descent only. That person shall not be a citizen of India by virtue of this section unless—

• His birth is registered at an Indian consulate within one year of its occurrence or the commencement of this Act, whichever is later, or with the permission of the Central Government, after the expiry of the said period; or

• His father is, at the time of his birth, in service under a Government in India: provided further that if either of the parents of a person referred to in clause (b) was a citizen of India by descent only, that person shall not be a citizen of India by virtue of this section unless—

• His birth is registered at an Indian consulate within one year of its occurrence or on or after the 10th day of December, 1992, whichever is later, or, with the permission of the Central Government, after the expiry of the said period; or

• Either of his parents is, at the time of his birth, in service under a Government in India, provided also that on or after the commencement of the Citizenship (Amendment) Act, 2003, a person shall not be a citizen of India by virtue of this section, unless his birth is registered at an Indian consulate in such form and in such manner, as may be prescribed—

•   Within one year of its occurrence or the commencement of the Citizenship (Amendment) Act, 2003, whichever is later; or

•   With the permission of the Central Government, after the expiry of the said period: provided also that no such birth shall be registered unless the parents of such person declare, in such form and in such manner as may be prescribed, that the minor does not hold the passport of another country.

Citizenship by Registration

Citizenship of India by registration can be acquired by –

1. Persons of Indian origin who or either of whose parents was born in undivided India and who are ordinarily resident in India for seven years.
2. Persons of Indian origin who are ordinarily residents in any country or place outside undivided India.
3. Persons who are or have been married to a citizen of India and who are ordinarily resident in India for five years.
4. Minor children both whose parents are Indian citizens.
5. A citizen of Singapore and Canada who is resident in India for five years and eight years respectively.

Citizenship by Naturalisation

Citizenship of India by naturalisation can be acquired by a foreigner who is ordinarily resident in India for twelve years (continuously for the twelve months preceding the date of application and for eleven years in the aggregate in the fourteen years preceding the twelve months).

Renunciation of Citizenship —

•  If any citizen of India of full age and capacity, makes in the prescribed manner a declaration renouncing his Indian Citizenship, the declaration shall be registered by the prescribed authority and upon such registration, that person shall cease to be a citizen of India- provided that if any such declaration is made during any war in which India may be engaged, registration thereof shall be withheld until the Central Government otherwise directs.

• Where a married couple ceases to be a citizen of India, every minor child of that person shall thereupon cease to be a citizen of India – provided that any such child may within one year after attaining full age makes a declaration that he wishes to resume Indian citizenship and shall thereupon again become a citizen of India.

Termination of Citizenship —

•  Any citizen of India who by naturalisation, registration otherwise voluntarily acquires or has at any time between the 26th January 1950 and the citizenship act voluntarily acquired the citizenship of another country shall, upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India – provided that nothing applies to a citizen of India who, during any war in which India may be engaged, voluntarily acquires, the citizenship of another country, until the Central Government otherwise directs.

• If any question arises as to whether, when or how any citizen of India has acquired the citizenship of another country, it shall be determined by such authority, in such manner, and having regard to such rules of evidence, as may be prescribed in this behalf.

Is Dual Citizenship Permitted Under Indian Law?

The Indian constitution does not allow dual citizenship. An Indian citizen can hold the citizenship of only one nation at a time and that must be of india.

As explained above, the provision of OCI and PIO is often confused with dual citizenship. There is a misconception among the people that our Indian Constitution grants the provision for dual citizenship.

What is Overseas Citizenship of India? Is it Not Dual Citizenship?

Person of Indian Origin who migrated from India to other countries except Pakistan and Bangladesh can be called an overseas citizen of India, provided their country allow OCI citizenship.

The following Categories of persons (except Pakistan and Bangladesh) are eligible to apply under OCI scheme:

1. Who is a citizen of another country but was a citizen of India at the time of, or at any time after, the commencement of the constitution.
2. Who is a citizen of another country but was eligible to become a citizen of India at the time of the commencement of the constitution.
3. Who is a citizen of another country but belonged to a territory that became part of India after the 15th day of August, 1947.
4.  Who is a child or a grandchild or a great grandchild of such a citizen.

OCI is not equivalent to Dual citizenship. Overseas citizen of India do not enjoy the following right –

• They do not have the right to vote.
• They cannot hold an Indian passport.
• They are not eligible for constitutional posts.
• They cannot be a member of legislature of any house.

This is all about Citizenship Law in India. What do you think? How benefiting Citizenship Law is for India?
Drop your views in the Comments below & Don’t forget to Share.

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In this blog spot, Anubhav Pandey explains how can a person lodge an FIR?

Let us start with the layman interpretation of First Information Report (FIR). A police complaint is synonymous to an FIR.

What does FIR actually means? When to register an FIR? How to register an FIR? What are rights of the person registering an FIR? What to do in the case where a police officer refuses to register an FIR? What happens after registration of an FIR is complete? Should a person fear visiting police station frequently after registering an FIR? What are the legal intricacies involving registration of an FIR? What is the object of an FIR?

All queries answered in one article.

Objects of FIR

• Mere going to a police station (preferably nearest police station of the area where the crime was committed) and asking the police inspector to file a First Information Report is sufficient.

(A sample FIR is attached in Annexure 1)

• Before beginning with anything it is important for us to know that First Information Report is registered only for cognizable offenses.

Cognizable offenses are one where police officers have the right to arrest a person with or without a warrant and to start the investigation of the crime prior to obtaining permission from the court.

• From the point of view of an Informant, registration sets the criminal law into motion. That is to say, starts the process of solving the case by first registering it.
  From the point of view of police, FIR is obtaining of information about some alleged crime.

• It is not required that the person registering FIR should be personally aware of the whole incident. Therefore, if one finds a body lying at the corner of a lane, it is not assumed that he knows when the murder happened or how did it happen?

• FIR is not an encyclopedia. Minute details are not to be given in a FIR.

• Simply because a particular name finds a mention in an FIR, that cannot be taken as an evidence against the accused in the court of law.

FIR Checklist

• FIR can be registered orally. The condition is, after giving the oral statement it is the duty of the person registering the First Information Report to produce that oral statement into writing.
• Once satisfied that all the information is recorded in an FIR, the person making it should sign the FIR.
• A person making a First Information Report has the right to get a copy of the FIR.
• It is mandatory under the provision of Code of Criminal Procedure for a police constable to register a First Information Report.

When to File an FIR?

• The prompt and early reporting of an FIR, as soon as one comes to know of the happening of an offense, is advisable.
• The provision as to an information report is enacted to obtain early information of alleged crime actively.
• If an FIR is still not filed at an early stage, the findings of an FIR cannot be doubted on the same ground.
• The only thing needed before filing a late FIR is a reasonable reason for the delay in filing of an FIR.

Bonus Read: Registering First Information Report without Jurisdiction

What are the Consequences of Delay in Filing of an FIR?

• 5 hours delay: Not seen with suspicion.
• 6 hours delay: Do not in any manner warrants any adverse inferences.
• 12 hours delay: Non-explanation of delay of 12 hours in lodging the First Information Report assumes significance from the point of view of evidence law.
• 15 hours delay: When the evidence is clouded with strong suspicion and as the First Information Report is lodged with a delay of 15 hours, the false implication of accused cannot be completely ruled out.
• 5 days delay: Accused becomes entitled to the benefit of the doubt.
• 14 days delay: It will be utterly unsafe for convicting a person based on an allegation 14 days late.

In spite of the delay, if still, the First Information Report looks substantive from the point of view of the law, such delay will not result in letting the culprit escape.

How to Register an FIR?

• Visiting the nearest police station within the crime scene (preferably).
• Informing either orally or in writing. In case a verbal complaint is made, it is the duty of the authority recording the FIR to convert it into writing.
• First Information Report should be signed by the person giving the complaint.
• It is the duty of the police authorities to register the FIR in a record book.
• It is the duty of the police officer to provide the complainant with a free copy of FIR.

What To Do in the Case Where a Police Officer Refuses to Register an FIR?

• In such case, a person may send the substance of such information – in writing and by post – to the concerned S.P. (Superintendent of police).
• When S.P. receives such information it is his duty to either investigate such matter or pass the matter and order an investigation by the concerned authority.

Can a Telephonic Message be Sufficient for Registration of an FIR?

• Depends on the facts of each case. If not vague it can be treated as FIR.

• A message sent by telephone to the police officer and recorded by him in his station diary, which discloses an information regarding a cognizable offense, is First Information Report.

• If the telephonic message by any person is not recorded by the police inspector into writing and signed duly, it will not be considered as a First Information Report.

• At many police stations in India, even an email or WhatsApp message can be registered as a First Information Report, provided they are not vague and comes under the ambit of information as provided in section 154.[1]

Procedure After FIR is Lodged

• If the area where the incident occurred is within the reach (jurisdiction of the police station) then, the police authority possess all the power to investigate.

• The police officer himself assesses whether the complaint is worth entertaining or not. E.g. where there is an FIR of theft of  Rs.50 then the police might not forward with the complaint.

• If convinced with the findings of First Information Report, police forward a report to the magistrate and ask him to take cognizance of the offense.

• Further, magistrate orders an investigation on the basis of First Information Report.

• A police officer might require the attendance of any person being within the local area of such police station.

• During enquiry of an FIR and its investigation, no statement made by any person to a police officer in the course of an investigation shall be signed by the person making it.

• After taking the final report, if the magistrate is satisfied with the report and findings of the investigation on the basis of First Information Report, court summons is issued.

FIR in Case of Rape Complaint

In cases of a sexual offense, the delay is not given much importance as it is assumed by the court about the difficulty of the victim to come out and complain.

Where delay in filing an FIR in a rape case had taken place, Court was satisfied with the reasoning that the name of the family was involved, therefore, there was a delay in filing of the First Information Report.

Basic Miscellaneous Facts one Needs to Know about FIR

The FIR is lodged with a view to setting the investigation into motion and not for the purpose of setting down all the story and plot of the offense. There should be a common sense approach to such matters while evaluating the criticism against the FIR. Where FIR is proposed against a politician, actor, or a public servant charging that person with allegations of dishonesty, a preliminary enquiry should be conducted against such person

Use of the FIR

The First Information Report is not a substantive evidence. A person or the maker of the statement may give many statements but it is not necessary that every statement of such person can be treated as an FIR. For a statement to constitute the first information report, it is very necessary that two conditions should be fulfilled-

1. The statement should be an accusation that it must be in nature of a complaint or it should be a statement that gives some information regarding a crime.
2. It must relate to a cognizable offense on the face of it

Drop your comments regarding the article in the comments section below & Share the Article.

Annexure 1 (Sample FIR)

Annexure 2 (Sample police complaint about lodging an FIR)

To
Officer in charge,
________________ Police Station,
________________ District,
(state)

Sub: Loss of the Mobile phone

Respected sir,

I am <name>, w/o <husband/father’s name>, currently residing at <address>. (Date), I lost my phone at the (Place) at <city>.

The mobile is a (model) with (specifications). The IMEI number of the phone is <IMEI number> and the serial number of the device is <serial number>. The mobile number of the SIM used in the lost phone is <phone number>. Approximate value of the new device of this model is Rs(   ).

You are requested to kindly register the complaint and give me an attested copy of this complaint so that I can submit this to the service provider to block the phone number and prevent potential abuse of my SIM.

I shall be obliged if you kindly take action to trace and recover the lost device.

Yours faithfully
(Name)
(signature)
(City)
(contact number)

Reference –

[1]http://www.thehindu.com/news/national/other-states/tripura-police-to-accept-fir-through-sms-email/article7777206.ece

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In this blog post, Anubhav Pandey talks about the legal custody of child after parents get separated or divorced in India.

One of the prime reason for a long pendency of divorce cases in India lies in the question – ‘with whom the custody of the child will rest’.

What are the laws that deal with custody of the child when the parents get separated? Are there different laws for different religion? What is the law governing child custody of a legitimate child among Hindus? What are the laws which govern custody of a child born out of wedlock in Muslims? Who has the legal custodial right of their child after divorce in Christians?

Is there any secular law which deals with matter pertaining to custody of the child in India? A detailed blog post on who has the legal custodial right of the child born out of wedlock in India.

Hindu Law Governing Custody of Child after Divorce or Seperation in India

For Hindus, the law governing custody of child is the Hindu Marriage Act.

According to the provision of Hindu Marriage Act, there are 3 ways of dealing with the questions relating to child custody, education as well as maintenance when a couple either go for divorce or judicial separation.

The three ways in which court intervene in matters related to custody of the child born out of wedlock among Hindus are –

1. Imposing the right of custody from time to time.
2. Altering the right of custody from time to time.
3. Revoking the right of custody from time to time.

• Imposing

While deciding the factor as to who will have the custody of the child, child’s wish is often taken care of wherever possible. Court from time to time intervene with the custodial rights of the children.

The Court looks into the matter with utmost care. Solution to the question as to who will have the custody of the child after divorce or judicial separation is based on the factor as to what will be most beneficial for the child.

• If custody with the father is more promising then the father will have the custody.
• If under mother’s custody child’s future is more secure then custody will go to the mother.

• Altering

Court from time to time has the power to intervene in the matters relating to child custody. Therefore, if the custody has gone to the father and father is not performing his duty well, the custody might shift to the mother or any such relative with whom future of the child seems secure.

Hence, no judicial order is fixed in matters of child custody. The Court can alter changes in its pronouncement from time to time.

• Revoking

If the finding of the court after passing of the order of child custody is not in affirmative, court might revoke the custody and grant it to the opposite party.

Therefore, when a mother was given custody of her child and she did not perform her duties towards the child properly, the court revoked the custody and gave it to child’s father.

The Court is also aware of the trauma from which the child goes through and therefore, a statutory time limit has been set and matters relating to custody of the child is to be disposed off within a period of 60 days.

Natural Guardian of a Hindu Child

Custodial matters of a child are also decided according to “who is the natural guardian of the child“.

The law governing this issue is Hindu Minority and Guardianship Act. The act talks, among other things, who is the natural guardian of a child.

• The Natural guardian of a Hindu minor, irrespective of minor’s will in both property and person, is as follows-

• Where minor is a boy or an unmarried girl: Till the age of five, the natural guardian is the mother of the child irrespective of whether the child is a boy or a girl. After five, father is the natural guardian of the minor and, after father, is the mother.

•  Provision in case where child is adopted.

• In cases where custody of an adopted son is being contested, the natural guardian of such child is first the adoptive father and then the adoptive mother.

Before deciding the issue as to whether the custody should be given to the mother or the father or partially to one and partially to the other, the High Court must –

• Take into account the wishes of the child concerned, and assess the psychological impact, if any, on the change in custody, after obtaining the opinion of a child psychiatrist or a child welfare worker.[1]

• In the case where the mother was living with a stranger, custody is awarded to the father and not the mother.

There is a presumption that a minor’s parents would do their best to promote their children’s welfare and, if necessary, would not grudge any sacrifice of their own personal interest and pleasure.

This presumption arises because of the natural, selfless affection normally expected from the parents for their children. There is no dichotomy between the fitness of the father to be entrusted with the custody of his minor children and considerations of their welfare. The father’s fitness has to be considered, determined and weighed predominantly in terms of the welfare of his minor children in the context of all the relevant circumstances.

If the custody of the father cannot promote their welfare equally or better than the custody of the mother then, he cannot claim an indefeasible right to their custody merely because there is no defect in his personal character and he has the attachment for his children which every normal parent has.

No doubt, the father has been presumed by the statute generally to be better fitted to look after the children, being normally the earning member and head of the family, but the Court has in each case to see primarily to the welfare of the children in determining the question of their custody, in the background of all the relevant facts having a bearing on their health, maintenance and education.

The family is normally the heart of our society and for a balanced and healthy growth of the children, it is highly desirable that they get their due share of affection and care of both the parents in their normal parental home. Where, however, family dissolution due to some unavoidable circumstances becomes necessary, the Court has to come to a judicial decision on the question of the welfare of the children on a full consideration of all the relevant circumstances.

Merely because the father loves his children and is not shown to be otherwise undesirable cannot necessarily lead to the conclusion that the welfare of the children would be better promoted by granting their custody to him as against the wife who may also be equally affectionate towards her children and otherwise equally free from blemish and who, in addition, because of her profession and financial resources, may be in a position to guarantee better health, education and maintenance for them.

The children are not mere chattels nor are they mere playthings for their parents.[2]

Custody of Minor Child in Muslim Law

The Muslim law recognizes that a mother is of all persons most desirable to have the custody of a small child so that proper care and attention can be given to him. There is no Quranic verse fixing the age-limit of custody of children and no evidence from the practice of the prophet is recorded. But in the moral sphere, it is specified in the Quran that the mother should breastfeed her offspring for two whole years. This moral injunction implies in the ethical sense that the custody in the first instance belongs to the mother.

The Hanafi school entrusts the mother to have custody of her daughter until she attains puberty and of her son till he is 7 years of age, while the shafi’i and Maliki school entitle the mother to have custody of a female child until her marriage.

The right of the mother to the custody of her children continues even when she is divorced by the father of her children but she forfeits the right in certain circumstances –

1. If she marries a person not related to the minor within the prohibited degrees.
2. If she resides during the subsistence of the marriage at a distance from the father’s place of residence.
3. If she neglects her children or fails to take care.
4. If she leads an immoral life e.g. if she is a prostitute or by the change of religion.

There is another rule of Islamic law that the basis of custodianship is the welfare of the minor, hence if the Court thinks that the fact and circumstances of the case shows that it will be for the welfare of the minor to be placed under the custody of the mother even if she marries a person not related to the minor within the prohibited degrees, it will be in accord with the Islamic principles.

• In case the mother is not alive or not capable or is absent, the custody of a boy below 7 and a girl below puberty goes to other female relations of the child.

They are in order of priority –

• Mother’s mother
• Father’s mother
• Full sister
• Uterine sister
• Consanguine sister
• Full sister’s daughter
• Uterine sister’s daughter
• Consanguine sister’s daughter
• Maternal aunt
• Paternal aunt

• Failing the above female relatives, the custody of the child then passes to the males.

The father is among them, first in order of priority and failing him the paternal relations in order of priority, are the nearest –

1. Paternal grandfather
2. Full brother
3. Consanguine brother
4. Full brother’s son
5. Consanguine brother’s son
6. Full brother of the father
7. Consanguine brother of the father
8. Son of father’s full brother
9. Son of father’s consanguine brother

• In the case of a son above the age of seven and a girl who has reached the age of puberty, the custody belongs to the father and the paternal relations in order of priority. In classical Islamic law, father is recognized as the legal as well as the natural guardian of the person and property of the minor.[3]

Custody of Minor Child under Christian and Parsi Law

Laws regarding custody of the child in Christian law is governed under Indian Divorce Act, 1869. It is a secular act which governs child custody of all religions.

In a judicial separation, the custody of the child is decided by the court on various grounds.

If the court thinks fit, the custody can be shifted to either mother or the father during the pendency of judicial separation. [4]  In any suit for obtaining a dissolution of marriage or a decree of nullity of marriage instituted in a District Court, the Court may from time to time before making its decree, make such interim orders as it may deem proper with respect to the custody, maintenance and education of the minor children, the marriage of whose parents is the subject of the suit.

Under the Parsi law, custody is governed by Guardian and Ward Act, 1890. Guardian and Ward Act keeps the interest of child paramount and the procedure is not very different from custody under Indian Divorce Act.

Additional Read:

1. Guardianship of illegitimate children in India
2. Rights of Illegitimate children in Christian law

What are your opinions about the laws relating to the custody of the child born out of wedlock? Drop a comment & Share the article.

References –

[1] Mamta v. Ashok Jagannath Bharuka, (2005) 12 SCC 452
[2]  (1973) 1 SCC 840
[3] Dr. Taslima Monsoor, (1997) 8 DULJ 49, Women’s Rights under Muslim Family Law with Particular Reference to Custody and Guardianship, as taken from www.scconline.com
[4] Section 41

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In this blog post, Anubhav Pandey talks about the Jewish law of Marriage & Divorce in India.

Jewish Community in India

There are three prominent Jewish communities across India.

1. Jews from coastal Kerala known as Cochin Jews and Paradesi Jew.
2. Jews from Bombay region are known as Bene Israel and Baghdadi.
3. The Jewish community in the North East.

The jews first entered India through Kerala as traders trading in ivory, spices and pepper. It was during the time of King Solomon the migration began. The major migration can be dated around 70 A.D during the Roman takeover of Judea.

The jews in Indian subcontinent went through a series of hardships and persecutions from time to time.

• In the 17th century, the Portuguese occupied Cochin and the Jews were persecuted in large number. In 1660, the Dutch defeated the Portuguese and this revived the Jewish community in Indian subcontinent once again.

• Similarly, in the Bombay region, the Bene Israel Jewish community lived since long ago and even spoke Marathi. The Baghdadi Jews arrived in Bombay during the 18th century.

After India gained Independence, the Jewish population began migrating to Israel, England and USA.

Jewish Law in India – Origin and Development

The modern Jewish law is an adaptation of the Mosaic and Talmudic law

Jewish legal system traces its history of origin in the divine belief in God. According to the Jews, the law and morals dictates were revealed by God in the wilderness of Sinai, to Moses who transmitted it to his people.

The said law is written down in first five books of the Old Testament often together called Torah (Genesis, Exodus, Leviticus, Numbers and Deuteronomy). The modern Jewish law is an adaptation of the Mosaic and Talmudic law. That is a collaboration of divine and evolved law.

Jewish Law of Marriage and Divorce in India

• The uncertainty which prevailed within the Jewish community long ago still exists because of lack of codified laws. The rules of marriage and divorce are set according to their customary ritual which in itself differs from one Jewish community to the other.

The Jewish law is derived mostly from Mosaic law through analogy and deduction.

It includes norms and usages which have become part of the law. The law also includes new regulations which were enacted by religious and civil authorities to meet the existing changes.

Another source of law is Talmud –

The Talmud defines and regulates the forms of contracting and dissolving of marriage, marital rights and duties and other innumerable issues regarding marital bond and tie-ups.

• Though the institution of marriage in the Jewish community is founded on the Biblical injunction and has a religious basis, the modern Jewish interpretation of law is based on monogamous marriage and a dissoluble contract.

• The 3 important requirements of Jewish marriage are-

• Free consent
• Mental capacity
• Legal age

No marriage can take place without the consent of both parties and a marriage without consent is void. Since, consent is one of the key ingredients of marriage, the idiot, lunatic, who are incapable of giving their free consent, are barred from entering into the bond of marriage.

Free consent, mental capacity and legal age are not the only three decisive factors. The three is a must but along with these three factors, there are other factors also which compliments the three essential conditions required to enter into the bond of marriage.

Importance of Custom and Rituals in Marriage Among Jews

It is mandatory to perform the ceremony of betrothal and nuptial for the marriage contract to have legal validity. The groom is required to give the bride money, called as “Kaseph“, another object of equal validity that too in present of two witnesses. This ceremony is called “Kaseph Kiddushin”.

• The ceremony of betrothal includes the certain pronouncement of words by the husband. This requires that a benediction is pronounced at the betrothal invoking the Lord’s praises and alludes to the law that the betrothed parties are not permitted to enter into a conjugal relationship before nuptials.

• The nuptial are called Chuppa or Nissuin and comprises the ritual of the groom taking the bride from her natal home to the bridal chamber. The ritual indicates that now she is under matrimonial authority. After the ceremony of nuptial, the marriage is considered to be valid irrespective of whether the marriage was consummated or not.

Before the nuptial, the groom is required to make a commitment in writing which would entitle the wife to receive a certain sum from his estate in the case of his death or a divorce and is called Ketubah. This is an economic safeguard just as mehr in the case of Muslims. If the husband divorces his wife arbitrarily this will serve as a token for the wife for her protection.

Mutual Duty of Husband and Wife toward Each Other

In Jews, like all religion, there exists a mutual duty of husband and wife towards each other. The ceremonies spell out in detail the mutual rights, duties and obligation between the husband and wife towards each other.

The husband’s duty towards his wife is primarily to maintain her according to his status in life.

• To provide her with food, clothing, and dwelling to establish conjugal cohabitations with her.
• To provide her suitable medical care and nursing when she is sick.
• To protect her and to ransom her in the eventuality of her abduction and captivity and to provide for her burial in case of her death.

Similarly, the husband is entitled to the wife’s earning, to share her inheritance in property, donation, gifts except where it was given to her on the sole condition that it will be used by her only.

When the wife renounces her claim to be supported by her husband, she acquires control over her own earnings and it could be retained by her exclusively, free from husband’s claim.

In Jewish marriage, it is the duty of the wife to go where the husband is domiciled.

• The duty of a wife is to take care of the household.
• The wife will follow her husband to every place except she will not be obliged to follow him to a country where a different language is spoken.

Divorce Under the Jewish Personal Law

The marriage could be dissolved by the death of either party to the marriage or by a divorce. Legal forms of divorce are a decree of divorce to the wife upon a petition filed by her, a decree of divorce enforced by a competent court in the interest of public morality and also divorce by mutual consent.

Under the Jewish law, a husband can divorce his wife on the following grounds –

• When the wife is adulterous –

The Jewish personal law even provides for this provision when the husband develops a suspicion that wife is committing the crime of adultery. Just like all personal law, adultery is considered as a solid ground for divorce under the Jews personal laws.

• When wife violates public morality –

That means when the wife does an act which is considered as immoral in the eyes of the public. This is a ground for divorce under the Jewish personal law.

• Change in religion –

When wife changes her religion i.e. converts herself from Jew to any other religion, this becomes a ground for divorce. Also where wife disregards the ritual law in the management of the household.

• On the refusal of conjugal rights during a whole year.

Where a wife does not allow her husband to fulfill his conjugal rights.

• Unjustified refusal to follow him to another domicile.

• Insulting her father in law in front of her husband or insulting the husband in front of others.

• When wife contracts some incurable disease which might be dangerous for the husband, such as leprosy.

The wife could also obtain divorce from her husband on the following grounds –

• A loathsome chronic disease which the husband contracted after marriage.

This is a valid ground for divorce in almost all personal laws. Catching a disease such as leprosy is a valid ground for divorce in the Jewish personal law as well as other personal law including Hindu or Muslim.[1]

• Cruelty towards wife is one of the major ground on which wife can seek a divorce from her husband.

• Another ground for divorce is when the husband changes his religion.

• Immoral behavior of the husband is also a valid ground for divorce under the Jews personal laws.

• When husband forfeits to support his wife and dissolves himself from worldly affairs.

• Having committed a crime which compelled him to leave the country.

• Habitual drunkenness.

• Impotency.

Important Judicial Decisions on Jewish Law of Marriage and Divorce in India

Due to lack of any codification and several intricacies, the British court found it difficult to interpret the Jewish marriage and divorce law in both substantive and procedure wise.

In Mozelle Robin Solomon V Lt. Col. R.J. Solomon reviewed the entire law on the subject of marriage and divorce among Jews. The old Mosaic law with its Rabbinical interpretation and provision and the modern legislation. It was held that a ground which would entitle a Jewish wife to obtain divorce also entitled her to reside separately from her husband and claim her right to be maintained by him.

What’s your opinion about Jewish Law of Marriage & Divorce in India? Drop a Comment & Share the article.

Reference –
[1] Agnes, Flavia, “Family Laws and Constitutional Claims”, Volume I, Oxford University Press,  New Delhi, 2011

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In this blog post, Debapriya talks about the laws applicable in the manufacturing & selling of cigarettes.

Use of Cigarettes & Its Harmful Impacts

The history of smoking in India dates back to 2000 BC when cannabis was smoked. As mentioned in Atharvaveda, smoking of medicated leaves was practiced for medical benefits along with dhupa and homa as mentioned in the Ayurveda.

Also known as dhumrapana, it has been a practiced for more than 2000 years. It has evolved over time in the forms of pipes of various lengths, cigarettes, beedis, cigars, hookahs etc.

Tobacco smoke is enormously harmful to health. It is addictive in nature. Smokers have trouble breathing because smoking damages the lungs. Smoking causes a lot of coughing with mucous. Tobacco can cause emphysema (lung disease) and lung cancer. It seems hard to quit because elimination of nicotine causes craving for the smokers. Its harmful effects don’t only limit to the smoker but also to the people around. So, it is unhealthy for the society as a whole.

Hence, the regulating authorities have come up with laws and regulations on manufacturing and selling of tobacco products, including cigarettes.

India became a party to the WHO Framework Convention on Tobacco Control on February 27, 2005. The government of India has legislated laws on the use of cigarettes in the country.

The Cigarettes (Regulations of Production, Supply and Distribution), Act, 1975 was the first law legislated for regulating cigarettes. Later, The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, also known as COTPA, 2003, came into effect in the year 2004.

The Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 extends to the whole of India. It is an act to prohibit advertisement, regulate trade and commerce, production, supply, and distribution of cigarettes and other tobacco products.

Few important provisions of the law have been listed below:

• COTPA, 2003 restricts smoking in public place. Here “public place” refers to any place where public has access. It includes auditorium, hospital buildings, railway waiting room, amusement centers, restaurants, public offices, court buildings, educational institutions, libraries, public conveyances etc.

• No person shall advertise cigarettes in any way. This restriction extends to every person who manufactures or sells cigarettes. It is illegal to display, distribute, exhibit or sell any advertisement of cigarettes in the form of films, video tapes, leaflets, handbills, posters etc.

However, this restriction doesn’t apply to the advertisement of cigarettes or other tobacco products in or on a package containing cigarettes or any other tobacco product and when they are displayed at the entrance or inside a warehouse or a shop where cigarettes and other tobacco products are offered for distribution or sale.

• It is prohibited to sell cigarettes or any other tobacco products to any person under eighteen years of age and in an area within a radius of one hundred yards of any educational institution.

• No person should produce, supply, distribute or import cigarettes or any other tobacco products which don’t contain a label with specified warning including a pictorial depiction of skull and cross bones and such other warning as may be prescribed.

• The label should also mention the nicotine and tar content in each pack.

• Further, the height and figure of the warning and content should be mentioned as per the specified rules under this act.

• The warning mentioned on the cigarette packet should be legible and prominent. For e.g. “SMOKING KILLS” or “SMOKING CAUSES CANCER”. It may be expressed in English or any other Indian language.

• Any offence committed shall be punishable under Code of Criminal Procedure, 1973.

In the landmark case – Murli S Deora vs. Union of India, the honorable Supreme Court of India banned smoking of cigarettes in “public places” as they identified its hazardous role on public health hazards and the passive smokers.

Article 21 of Constitution of India guarantees the right to life to every citizen of India. Everyone is aware of the adverse effects of smoking. A person who doesn’t smoke should not be compelled to face it only because he has to go to public places. Visiting a public place cannot and should not be avoided. Rather, there must be a restriction of the smokers on smoking in such places. This is the landmark decision that was awarded in this case.

In addition to central government, the state governments also took measures against cigarettes and other tobacco products:

• Maharashtra   This state banned the sale and use of hookahs in hotels, restaurants and airports. As a result, several hookah bars in this state were closed.

• Punjab and Haryana  They were the first two states who banned the sale of loose cigarettes as it was violating the provisions of COTPA, 2003.

• Chandigarh This is the first smoke-free city in India.

• Bihar  This state published notification banning gutkha and pan-masala that contains tobacco. But it was later quashed by the High Court.

Critical Analysis

In addition to the regulating authorities implementing measures to curb smoking, it is a moral responsibility from the end of civilians to understand its negative effects. As a general rule, no law can operate in a jurisdiction until the people there adopt it. From the end of the authority, it is not enough to just formulate the law. There should be an appropriate and strict system to implement it. E.g.  for public smoking, one has to pay a penalty of Rs 200. People in the society should cooperate with the government to reach its obstacle.

For the ban of cigarettes and tobacco product, India has a strong law in place. But the implementation system is weak. So, even if people are committing offences, they are getting a chance to escape. This is creating a negative effect on the people around.

In India, more than 150 million people smoke regularly. This causes health hazards for them as well as the society. This is a national concern.

As mentioned already, in addition to central government, the state government is also responsible and playing a role in eradicating the problems related to smoking.

As per WHO, every year, approximately 1 million people die from tobacco-related illnesses in India. India is the home for about 12% smokers in the world.

Companies in India that manufacture cigarettes:

1. Marlboro
2. ITC
3. Godfrey Phillp
4. VST
5. Kothari Products
6. Golden Tobacco
7. NTC Industries
8. Raghunath Inves

Technology: In this age of information technology, social networking is playing a very important role. This digital media is also used in spreading awareness against smoking. There are several videos, images, films that have been created in order to spread this awareness. There are random messages send to numbers writing about the adverse effects of smoking.

Conclusion

Smoking is injurious to the health of the smoker as well as the society. So there are laws framed to curb it. But just framing the law is not enough. There needs to be a very strong implementation framework. Our country is fighting against it and we are hopeful that we can overcome it soon.

How do you think smoking can be curbed? Drop your views in the comments below & share the article.

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In this blog post, Debasis Bhowal, pursuing M.A. Business Law from NUJS, Kolkata, talks about the Law related to Benami Property in India.

The Benami Transactions (Prohibition) Amendment Act came into force on 01.11.2016. Income Tax sleuths have started collecting details of Benami transactions and properties as a preclude to crackdown on black money. The process of data mining is on and an all out data mining drive shall commence from 01.01.17.

Original Benami Transactions Act 1988 has been amended to make it more stringent. Directors of shell companies who hardly get the remuneration of 10,000/- per month, Doctors, Industrialists, and politicians belong to categories of benami transactors who thrive behind such type of suspicious persons.

Benami Transaction (Prohibition) Amendment Act

The Benami transaction is one where a property is held by one person and the amount for it is paid by another. The transaction is done to benefit the person who pays for the property either directly or indirectly.

• The prohibition of Benami Property Transaction Act, 1988 is an amendment of the older Benami transaction (prohibition) Act. 1988 and has come into force from 01.11.2016.

• It prohibits illegal benami transaction and provides imprisonment up to seven years and the fine for violation of the act, which may extend to 25% of the fair market value of the benami property.

• The new law provides for authorities to conduct inquires on any benami transactions. These are initiating officer, approving authorities administrator and adjudicating authority.

• Under the new law, the appellate tribunal will hear appeals against orders passed by the adjudicating authority.

Appeals against the orders of the tribunal, in turn, will be heard by the High Court. The Benami Transaction (prohibition) Amendment Act came into force on 01.11.2016 as per sources close to the Central Board of Direct Taxes. It is an act of the parliament of India that prohibits benami transaction and the right to recover benami properties. It came into forces on 05.09.1988.

The Benami Transaction is any transaction in which properties are transferred to one person for a consideration paid by another person.

 

Benami is a Hindi language word that means without name or no name in this act. The word is used to define a transaction in which the real beneficiary is not the one in whose name the property is purchased. As a result, the person in whose name the property is purchased is just a mask of the real beneficiary.

In 1973, the law commission of India after studying various acts and prevailing benami system recommended formulating an act to tackle the issue. Accordingly, the Benami Transaction (prohibition) Act 1988 was enacted by the parliament which came into force on 19.05.1998. However, due to various deficiencies in the act, the rules required for operationalizing the act were not framed.

To address these deficiencies, several years later in 2011, the Government of India introduced Benami Transactions (Prohibition) Bill 2011.

In an attempt to curb black money in July 2016, the Modi Government decided to amend the original act which was subsequently passed by parliament as the Benami Transaction (Prohibition) Amendment Act 2016. Thereafter, the Government notified the provisions of the act to come into force from 01.11.2016.

Various Newspapers reported that the Benami Act, along with the black money, undisclosed foreign income and assets and the imposition of Tax Act 2015 will help the Government in its fight against black money, both within and outside the Country.

The 2016 Act also has safeguard mechanisms such as the adjudicating authority and the appellate mechanisms for appeals. The Act prohibits illegal benami transactions and provides imprisonment up to seven years and fine for violation of the act which may extend to 25% of the fair market value of the benami property.

Law Regarding Benami Property

In the “Mann Ki Baat” programme on AIR, the Prime Minister affirmed that benami property law is to be operated soon.

After attacking black money by demonetization of high-value currency notes the PM is all set to take on benami property to check corruption. In his last “Mann Ki Baat” of the year, Modi said the Government will soon operationalize strong law to effectively deal with benami property. He said that the authorities will soon take action against benami property.

This is a major step to eradicate corruption and black money.

• They are going to take action against the properties which are purchased in the name of others. Those are the properties of this country.

• They are empowered to confiscate deposits of people using others accounts to convert unaccounted wealth into white money.

But it seems it has not deterred the corrupt from amassing benami properties. Hopefully, the Government will make further amendment in the existing law or may bring a new law as per relevant sources.

Such properties also included properties held in the name of spouses or child for the amount is paid from known sources of income.

A joint property with brother, sister or other relatives for which the amount is paid out of known sources of income also falls under benami property. The transaction involved in the same is called Benami transactions.

As a usual practice to evade taxation, people invest their black money in buying benami property. The real owners of these properties are hard to trace due to fake names and identities. The person on whose name the property is purchased is called benamder. The benami transaction includes buying assets of any kind – movable, immovable, tangible, intangible, any rights or interest or legal documents.

Conclusion

As a sequel to evasion of massive income taxes due to investment in Benami properties, the Government and this country are deprived of real wealth in reinvesting in developmental work and upliftment of the common people. This Government is going in the right direction to unearth the black money and putting back the economy in real motion for attainment to dizzy heights.

Do you think the laws regarding Benami Property will uplift the nation? Drop your views in the comments section & share the article.

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This article on “what all registrations are required for a law firm in India” is written by Gurshabad Singh Sandhu from Rayat and Bahra University School of Law, Mohali. He is also pursuing Diploma in Entrepreneurship Administrative and Business Law from NUJS, Kolkata.

Registration of a Law Firm

The first thing that a person requires to set up a law firm is that he shall be of at least 21 years old and shall be having a law degree from any University of India or a University in Foreign, recognized by the Bar Council of India. Every state has a Bar Council. After getting a degree you need to register yourself with any of the State Bar Councils of India.

What You Need to Consider Before Registration?

There are some factors which a lawyer needs to take into consideration before he plans to set up a law firm and wants to register it. These factors are considered essential from the lawyer’s point of view as they describe the work, management and establishment of the firm.

•  Limited Liability

Limited Liability Partnership has a benefit over Sole Proprietorship because in an LLP, the personal Assets of the Partners cannot be used to pay off the debts of the business but in the case of a Sole Proprietorship, the individual’s personal assets are used to repay the debts of the business.

• Number of Lawyers and their Roles

If a sole proprietorship is chosen by a lawyer then all the functions of management, decision making, financing, record keeping, tax bearing shall be done by the single person but if there are partners in a firm then work would be assigned as per the specialization and tax would be borne by all the partners.

• Financing

In a sole proprietorship, there is a single person who is the owner. All funds are raised by him alone and even the loan taken by the sole proprietor for setting up the firm has to be repaid by him alone and his personal assets can also be used for settling the loan amount.

Hence, the entire burden of taking the loan and repaying it back lies only on the sole proprietor and his personal assets.

In the case of Partnership and LLP, the personal assets of the person cannot be sold for repaying back the loan amount.

• Management

If a firm is a sole proprietorship then the entire management of the firm would be taken up by the single person, he shall take his own decisions and shall act as per that only.

If there are two or more partners to the firm, then all the partners can give their personal opinions as different people are specialized in different fields, hence, opinions taken by different lawyers shall lead to specialization of work but at the same time, this can also lead to conflicting decisions.

• Taxes

One of the biggest concerns for every business entity is how it will be taxed. If the firm is a Sole Proprietorship Firm, then one must report all business income or losses on its personal income tax return. But if the firm is a Partnership Firm or a LLP, then a flat tax rate of 30% is levied on partnership firm.

Types of Legal Structures and their Registration

1. Sole Proprietorship
2. Partnership
3. Limited Liability Partnership

• Sole Proprietorship

Sole proprietorship is the simplest and a straightforward form of structure as the firm is managed and operated by a sole proprietor who does not get the benefit of limited liability, as in case of the recovery of the Loan amount, the personal assets of the Sole Proprietor can be used and in addition to this, the income from the business is reported on its personal income tax return.

There is no, as such, any formal procedure for registration of a sole proprietorship law firm in India. This can be done only through the opening of a bank account in the name of the proprietorship firm or obtaining licenses required for conducting the business.

If you want to open a current bank account, you will need couple of things –

1. Service tax registration.
2. Letter from your CA regarding the nature of your business.
3. Letterhead with the firm’s name and address.
4. Stamp in the name of the proprietorship.
5. Address and ID Proof of the proprietor. If proprietorship address is different then you will also need office premise address proof.

 How to Register Sole Proprietorship Firm Online

1. Place a Request on MyOnlineCA.
2. MyOnlineCA startup friendly team will connect via call/mail/chat.
3. Help to understand about legal things for your startup.
4. Get the reasonable pricing and 70% cheaper as compare to traditional offline legal   services.
5. Send them your documents via mail as scanned copies or images courier or through their pickup service.
6. Pay in Installments and get the final certification.

• Partnership

Partnership consists of two or more people who own and run the firm. The partnership may be general or limited and is generally governed by an agreement that sets forth the partners’ responsibilities and obligations.

Partnership firms in India are governed by the Indian Partnership Act, 1932. While it is not compulsory to register your partnership firm as there are no penalties for non-registration.

A partnership firm can be registered whether at the time of its formation or even subsequently. You need to file an application with the Registrar of Firms of the area in which your firm is located.

Application for partnership registration should include the following information:

1. Name of your firm.
2. Name of the place where firm is situated.
3. Date of the partners joining the firm.
4. Full name and permanent address of partners.
5. Duration of the firm.

Ensure that the following documents and prescribed fees are enclosed with the registration application –

1. Application for Registration in the prescribed Form – I.
2. Duly filled Specimen of Affidavit
3. Certified copy of the Partnership deed
4. Proof of ownership of the place of business or the rental/lease agreement thereof

Once the Registrar of Firms is satisfied that the application procedure has been duly complied with, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.

The Register of Firms maintained at the office of the registrar contains complete and up-to-date information about each registered firm. This Register of Firms is open to inspection by any person on payment of the prescribed fees.

Any person interested in viewing the details of any firm can request the Registrar of Firms for the same and on payment of the prescribed fees, a copy of all details of firm registered with the Registrar would be given to the applicant.

• Limited Liability Partnership

LLPs are a very common way for partnerships of all sizes to operate in a more protected manner than a general partnership. The advantage of incorporating a LLP is that it would protect your personal assets in the event of a dispute. Most law firms have moved to this model after it was introduced in India.

The name indicates – Limited Liability Partnership limits the liabilities of its partners to their contributions to the business and also offers each partner protection from the negligence, misdeeds or incompetence of the other partners.

To register an Indian LLP-

• One has to first apply for a Designated Partner Identification Number (DPIN).
• Then one needs to acquire Digital Signature Certificate (DSC).
• As soon as the DSC is applied then, a unique name for the LLP Firm would be asked for.

These will be used to file for incorporation with the MCA. The Certificate of Incorporation will be approved at the end of this process.

Thereafter, it is a need to get the LLP name approved by the Ministry of Corporate. Every LLP needs a registered Permanent Account Number (PAN) and Tax Account Number (TAN).

Conclusion

While registration is not mandatory but registering a firm generates a few rights on the firm and on its partners, which a non-registered firm does not has.

Each structure has a different procedure for registration and essential factors need to be taken into consideration while choosing the Legal structure of a Firm.

Do you have an additional information regarding the registration of a law firm? Please feel free to comment below & share the article.

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In this blog post, Yash koshal from RDVV-Jabalpur who also has a Diploma in Cyber Law from Asian School of Cyber Laws, Mumbai, talks about the various uses of a Gift Deed.

Various Uses of Gift Deed

There are number of ways through which the property can be transferred from the owner of that property to the donee. It can be done by sale, will or gift but the method commonly used to transfer the property to the family members is by executing the gift deed in favor of that person.

Though no monetary transaction in involved in the gift deed then also it is mandatory to get the gift deed registered.

Section 122 of the Transfer of Property act,1882 defines gift.

What All Can be Gifted?

Things which can be gifted should have such properties to be called as a gift –

1. It should be movable or immovable property.
2. It should be tangible property.
3. It must be transferable.
4. It should be in present time and not to be a future property.

Gifting Process

• Drafting Gift Deed

With the help of the lawyer, gift deed is drafted which describes what is being transferred and to whom it is transferred. It is basically a contract between the donor and the donee which defines the simultaneous act of giving and taking. To make gift valid, it must be made by the person voluntarily and not by force.

• Acceptance of Gift 

After the legal work is done it is necessary by the donee to accept the gift from the donor in order to make the gift deed valid. Acceptance of the gift must be done during the lifetime of the donor. In case donee fails to accept the gift, whatever may be the reasons, it is rendered invalid.

• Registration

A gift of immovable property cannot pass any title unless it is registered under section 123 of the transfer of property act. Attestation by two witnesses is mandatory during registration as well as post registration then only title transfer is possible.

How to Get Gift Deed Registered?

Gift deed gets registered as per the provision of the Registration act, 1908 –

1. Valuation of the property to be gifted by the valuation expert.
2. Payment of stamp duty and transfer duties are slightly different for men and women (slightly lower for women). Stamp duty also varies from state to state.

Gift Deed in Case of Minor

Any person who owns the property can make the gift deed in favor of anyone but there is an exception to this rule.

In the cases in which either a donee or donor is a minor, minors are not eligible to contract so, they cannot transfer property as a gift.

• If the donor is a minor then the gift deed becomes invalid.
• In case, if the donee is a minor, a natural guardian can accept the gift on behalf of the minor.

Guardian acts as a manager of the property gifted to the minor and if the gift is burdensome, the responsibility of the gift cannot be enforced on the minor until he/she is minor. Once the donee becomes major he may either accept the gift or return the gift back to the donor.

Is Oral Gift of Immovable Property Valid?

According to section 123 of transfer of property act, a gift of immovable property which is not registered and orally said is not a valid gift in law. Mere delivery of the gift without doing legal paperwork cannot confer any title.

Gift Under Hindu Law

It is not necessary under Hindu law to transfer gift by doing the legal paperwork. However, a gift under the law is not valid without the delivery of the possession of the subject of the gift from the donor to donee.

Where the physical possession of gift is not given but all the efforts made by the donor to make the gift valid will consider the gift to be valid.

Property Which Can be Gifted

1. Any Hindu can dispose his property by gift which is his separate property or self-acquired property.
2. A father can also dispose of his property by gift, whether self-acquired or ancestral.
3. A female can also dispose of her stridhan by gift, subject to, in certain cases, the consent of husband is necessary.
4. A widow can also dispose of her property by gift which she has inherited from her husband.
5. The owner of the impartible state can also dispose of his/her property by gift unless there is a custom prohibiting him/her to dispose of property by gift.

Gift to Unborn Child

Under pure Hindu law, gift in favor of a person who does not exist at the time of making the gift will be considered as an invalid gift. But this rule has been amended by these acts namely:

1. The Hindu transfers and bequest act, 1914
2. Hindu disposition of property act, 1916
3. The Hindu transfer and bequest act (city of madras), 1921

Gift Under Muslim Law

Under Muslim law, gift is considered as a part of a contract in which there should be an offer made by the person that should be accepted by the other person and then it should be transferred to that person.

As in the case of Smt. Hussenabi vs Husen Sahab Hasan, where a grandfather made an offer of gift to his children. He (grandfather) also accepted the offer on behalf of his grandchildren. However, there was no implied or express acceptance made by the major grandson.

Karnataka High Court held that, since the three elements of gifts were not present in the case of major child hence, gift in the favor of major child is invalid. As far as minor grandchildren are concerned, their gift is valid.

Essentials of Valid Gift

• Declaration

There must be clear intention of the donor to make the gift in favor of another person. Declaration by the donor is the statement which clearly signifies that the donor is willingly making a gift in favor of another person.

A declaration can be in written form or can be oral depending upon the situation. The donor can declare to gift property of any kind either orally or by written means. Under Muslim law, it is not mandatory to give in writing for transferring of the gift.

• Acceptance

• There must be proper acceptance by the donee. If donee does not accept the gift then, it will become invalid.

• It is not necessary that donee should be a Muslim to accept the gift. For accepting the gift the person may be of any religion. Gift in favor of child and female is also valid.

• A child who is in the mother’s womb is also a valid donee if he/she born within six months after declaring gift in his/her favor.

• The gift can also be made in favor of the company, a close corporation, a body corporate or a trust.

• Any guardian on behalf of the minor or insane person can receive the gift.

The Guardians who can receive the gift on behalf of the minor or insane are:

1. Father
2. Father’s executor
3. Paternal grandfather
4. Paternal grandfather’s executor.

• Possession Delivery and Acceptance of the Gift

The term possession in Muslim means only such as the nature of the subject is capable of. Thus, the real test of delivery of possession takes place to see who takes the advantage of gift, whether it is donee or donor.

If the advantage of the gift is been taken by the donor then the gift will become invalid.

The delivery of possession of the gifts depends upon the nature of the property. There are basically two modes of delivery of possession:

1. Constructive
2. Actual

• Constructive Delivery

Constructive delivery of possession is a possession in which there is a symbolic transfer of property. Constructive delivery of possession is basically the possession in which the property is not actually delivered to the donee but the donor has done something which can be constituted that the possession has been given but as the property is of such nature that the physical delivery of possession is not possible then, constructive possession of property is enough to complete the act of gift.

• Actual Delivery

Actual delivery of possession means where the property is physically delivered to the donee. Actual delivery of possession only takes place when the property is tangible (which can be seen or touch) is delivered to the donee.

Examples of tangible movable property are – bags, chairs, mobile phones, laptop etc whereas the examples of the tangible immovable property are house, land, etc.

Now, coming on to the tangible movable property, actually transferring of movable property is necessary to validate the actual delivery of possession. Mere entry in the accounts book does not constitute actual delivery of possession.

On the other hand, where the property is immovable its actual transfer to the donee is also mandatory to make it valid.

In the case of immovable property, the property cannot be handpicked and transferred to the donee.

For example, if a person gifted his house in which he is living to the donee, the actual delivery of possession is only valid when the person who gifted his house should vacate his house and ask donee to stay in it. Then only the actual delivery of possession is valid.

Certain Things which Should be Remembered while Making Gift Deed

While executing the gift deed one thing should be remembered that, after executing the gift deed in favor of the donee, the donor does not have the right to revoke the gift deed until there is a special clause mentioning to revoke the gift, which has been made in the favor of donee.

Conclusion

A gift in favor of someone is free, any person who is a legal owner of a property can transfer his property by way of gift. It is actually a transfer of property to some other person without any consideration. So it can be said that the chief characteristic of the gift is that it can be transferred to some other person without any consideration.

What do you think about the Gift Deed? Is it possible to take advantage of this? Comment your view below and share the article.

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In this blog post, Raghav Gupta, pursuing M.A. in business law from NUJS, Kolkata, talks about the powers of the autonomous councils in tribal areas of north east India.

There are the several autonomous administrative divisions of India to which the central government has given varying degrees of autonomy within the state legislature. The establishment and functions of most of these autonomous councils are based on sixth schedule to the constitution of India.

Abstract

The most important structural change in the administration is the grant of political autonomy and statehood in North East India. This happened back in the British era when the Interim Government of India had appointed a sub-committee to the Constituent Assembly of North- East Frontier (Assam) Tribal and Excluded Areas Committee under the chairmanship of first Assam Chief Minister Gopinath Bardoloi.

The committee recommended setting up of autonomous district councils to provide due representative structures at the local level to the tribal population. The recommendation was later incorporated into Sixth Schedule article 244 (2) & Article 275(1) of the Indian Constitution.

As per sixth schedule states like Assam, Tripura, Meghalaya and Mizoram are the states consisting of tribal areas and are deemed to be technically different from the other areas. These areas fall under the jurisdiction of respective states but certain provisions are made to create some district and regional councils specially for the tribal areas. These councils have certain judicial and legislative powers. Each district is an autonomous district and Governor can modify/divide the boundaries of the said tribal areas by notification. Currently, there are ten such councils in the region.

Some of them are-

• Bodoland territorial council
• Garo hills autonomous district council
• Jayantia hills and Khasi hills autonomous district council
• Tripura tribal areas autonomous district council etc

Powers

The Sixth schedule lays down a framework of autonomous decentralized governance with legislative and executive powers over subjects like water, soil, land, local customs and culture. These bodies have also been given judicial powers to settle certain types of civil and criminal cases also. Thus, the councils under the sixth schedule have been given more power than the local governments under the 73rd and 74th amendments in the rest of the country.

It has been established that this autonomy paradigm has brought a degree of equilibrium within the tribal societies mainly via the formal dispute resolution under customary laws and through control of money-lending etc thus giving it financial power. In Assam, Tripura and Mizoram, the autonomous councils have power to decide if a State legislation on subject matters under the autonomous councils should apply to their territories or not. They even have their own political power but that is as good as not having because the members of council are elected by ministers from state legislature. Thus, they have all such powers which will be discussed below.

• Executive Powers And Functions like the ADCs have executive power to construct or manage primary schools, dispensaries, markets, cattle, ponds, roads and water ways, land revenue, forest, primary education, taxes, administration of villages and towns under (para 6 and 8 of sixth schedule). The executive committee EC of district council to carry executive functions. The chief executive members (CEM) are elected by district council amongst themselves and by the Governor.

• Judicial Powers And Functions which entitles the council to constitute village and district council courts in autonomous areas to adjudicate or try cases or customary laws in which both the parties are tribe but no case involving offences punishable by death transportation of life or imprisonment for not less than five years are heard and adjudicated by these courts.
  The district council courts and the regional council courts are courts of appeal in respect of all suits and cases tried by village council courts and subordinate district council courts. No other court except the High Court and Supreme Court of India have jurisdiction over suits and cases decided by the council courts.(para 4 of sixth schedule)

• Legislative Powers And Functions which gives powers to the district councils to make laws for allotment, occupation, use of land, other than reserved forests for purposes of agriculture, grazing and other residential and non residential purposes, management of unreserved forests, use of water courses and canals for agricultural purposes, regulation of shifting cultivation, establishment of village councils and town committees, administration of village policy, public health and sanitation, appointment and succession of chiefs or headmen, inheritance of property, marriage, divorce and social customs, money lending and trading by non-tribals within the autonomous districts.
  The governor has the power to alter laws or rules passed by district councils, which are in violation of provisions of sixth schedule. The sixth schedule thus makes the Governor the head of the autonomous district council. (Mostly in para 3 of sixth schedule)

• Financial Powers And Functions can be used by the district council and the regional council. They have the responsibility for framing rules for the management of finances and approval of the Governor. They are also have mutually exclusive powers to collect land revenues, levy and collect taxes on lands, holdings, shops, entry of goods into market and tolls etc within their respective jurisdictions and the District Council has concurrent power on the professional trade, professions, trade, callings, employments, animals, vehicles and huts, tolls on passengers and goods carried in ferries or boats or on waterways and maintenance of schools, dispensaries or roads (Under para 9 of sixth schedule). Royalty on licences or leases for the extraction of minerals in the autonomous districts goes to the district council.

  As regards the tax on motor vehicles, it is assigned and collected by the state government on behalf of district council. Grants-in-aid, loans and advances or any kind of loan etc from the state government, constitute other sources of income of the councils. The district council enjoys autonomy and the acts of parliament and state legislatures on the subject under them do not normally apply to the autonomous districts. They may be extended there with such exceptions and modifications as are considered necessary by the district regional council concerned.

Drawbacks

• Conflict of Power- There are frequent conflicts of interest between the district councils and the state legislatures. For example, in Meghalaya, despite the formation of the State, the whole of the State continues to be under the Sixth Schedule causing frequent conflicts with the State Government.

Para 12 (A) of the Sixth Schedule clearly states that- whenever there is a conflict of interest between the District Councils and the state legislature, the latter would prevail.

Thus, state enjoys the superiority, but then it is alleged that autonomous councils are mere platforms for aspiring politicians who nurture ambitions to contest assembly polls in the future.

• Disparity among autonomous bodies and local bodies- This is another important area of conflict. The local bodies established via Seventy-third Amendment are more liberally funded through the State Finance commissions. In a state where there are more than one autonomous councils, one claims that it is being treated less favourably than other. It is often experienced that some of the functionaries of the district councils and regional councils discharge their powers and functions more or less arbitrarily.

• They often violate acts, rules and regulations for their selfish motives and interests and for party interests. The members are also often indulged in favoritism and special needs of people from same political background or same area on the basis of cast and vote bank politics which is itself killing the motive of such council.

• They are mainly indulged in misuse of financial powers and autonomy by diversion of government funds arbitrarily by violating procedures, rules and regulations which is the integrating power behind the sixth schedule areas economically with the rest of the country. The customary system of land tenure and other protective land regulations to enable the private capital/ investors/ entrepreneurs to acquire land for the purpose of economic development or for investment in any other public purpose may be codified, modified or liberalised.

With the existence of autonomous district councils and the, state governments, the thrusts seems to be more on legislation than codification. Legislation, no doubt provides uniformity in traditional system rather than codifying the customary laws that vary from tribe to tribe. It may be further added that if the tribal people to develop according to their genius, land- relations have to be changed radically to keep continuity with egalitarian ethos of tribal traditions.

• They are unable to play any significant role in strengthening the planning process at the micro level because of which, the councils have neither been able to do anything of standard in the interest of hill masses nor to involve the poor tribes in development activities either as beneficiaries or as decision makers on any significant scale. In fact, it is shown that the councils have harmed interests of the poor tribes.

Within the councils, over a period of time, due to large development funds available, a nexus has emerged between the rich middle class or classes or rich traders, contractors, bureaucrats and educated, who have emerged from within the tribal society of north east India. This emerging socio-economic power structure in the tribal areas does not allow the benefits of the Sixth Schedule to flow down to the weaker section of the tribes.

The elected members in councils and the office-bearers, who are normally from the elite group of tribal society, have vested interests in preserving the exploitative structure and have created a class which has cornered all the privileges. They have undermined the purpose of the Sixth Schedule to build a democratic edifice for the Councils.

Further the political agenda of the committee always raises the question whether the district council and the regional council are working for the interest of the local tribes and people or not. The elections of members are not done within the tribe which is a cause of concern and the poor tribes don’t get a chance to be a part of the council.

Election done by any person from the government raises a question into our minds if it is for political purpose or financial gain indirectly and will those people work for personal and political gains and numerous cases have been found where the council members are found guilty misusing the power and therefore it is easy to say that even though it is an autonomous council yet it has numerous drawbacks.

Benefits Of Business In These Areas

Every law has its own advantages and disadvantages and therefore even though there are certain drawbacks of the autonomous councils of north east India, there are numerous other advantages to the businessmen who want to invest in north east India due to special tax deductions and other government benefits mainly because the government is trying to develop north east India in the same way like rest of the India and want the tribals to learn and educate themselves and get good jobs so  that they don’t  face difficulties in this growing generation of people.

India’s north east region is endowed with nature and natural resources and is acknowledged as India’s eastern gateway of governments ‘Look East Policy’.  Most of it is tribal area and  with 2000 km of border sharing with China, Bhutan, Myanmar and Bangladesh, the north east is comprised of various tribes and various culture that means different customs and traditions which means that they have different traditional handicrafts made there and they where different clothes etc. North east has a climatic advantage making it suitable for agriculture industry like rearing of silkworm, fishing and other traditional businesses.

Investment opportunities for businessmen are available in agriculture market like production of rubber and bamboo, in fact, Tripura attracts lot of investment by businessmen in rubber production and is also known as second rubber capital of India after Kerala. The benefit here to businessmen are that setting up of a small cottage industry is comparatively less costly than setting up industry elsewhere. The employment and labour cost is low and the electricity cost is low and government provides various tax concessions but the tribal people should also get employment and necessary help in development.

As per the ‘North Eastern Industrial and Investment Promotion Policy also known as “NEIIPP” in 2007’ by the Ministry of Commerce and Industry, the region has been declared as special economic zone (SEZ). The SEZ areas are those areas where investment is necessary for progress of the country. These areas are backward if compared with other regions of the country therefore Indian government tries to lure investors and businessmen to invest in such areas with different incentives and tax free business offers.

The central government has implemented various schemes to attract investors.

Some of these schemes are mentioned below:

• Subsidy at 90% of the transport cost of raw materials brought from outside the special economic zone as well as the finished goods sent from the region to other parts of the country. The transport cost between Siliguri (the entry point to the north east) and the factory site only is considered for subsidy calculations.

• In addition, subsidy is also available at 90% of transport cost on movement of raw materials and at 50% of transport cost on movement of finished goods from one state to another within the region.

• Income tax exemption for five years from central government for the businessmen setting up new industrial unit in the SEZ region.

• Growth centres and IIDCs to be converted into total tax free zones for the next ten years.

• Similar benefits will also be extended to new industrial units or their substantial expansion in other growth centres or IIDCs of industrial estates, parks, export promotion zones set up by the states.

• Similar benefits will also be provided to units located outside the specified locations, if they belong to the specified industries listed in Annexture A of the Indian government circular.

• Capital investment subsidy (CIS) at 15% of investment in plant and machinery, subject to a maximum ceiling of 30 lakh INR will be given.

• Eligibility conditions will be same as in case of tax benefits.

• Interest subsidy of 3% on working capital loans will be provided for a period of 10 years. Eligibility conditions will be same as in case of tax benefit.

• A comprehensive insurance scheme for industrial units to be designed, in consultation with GIC and 100% premium to be borne by the Indian government for 10 years

Several tourist spots are located in the jurisdiction of the autonomous district and autonomous regional council in north east like the blue mountain situated in Phawngphui, Palak lake in the state of Mizoram, then Kangla fort in Manipur and a river island in Assam called Majuli and these places are filled with tourists now a days and, many businessmen have set urban resorts and small motels and restaurant for the tourists.

This gives the locals a boost in employment and the businessmen get cheap labour too. The council keeps an on any unethical working of such business. They also take care of the local environment by stopping tourists to litter and teaching them about the traditional practice of the north eastern tribes.

There are numerous tribal culture which gives the tribals opportunity to show the world each and every culture from tribal wear to tribal food. The local councils have caused awareness and done campaign in cities to attract tourists as well as foreigners. They were able to invite some big names from the entertainment industries like discovery channel and animal planet to show the diversity and culture to the rest of the world.

World renowned chef Gordon Ramsey also visited the tribal areas of Mizoram and learnt few tribal cuisine from the people so the autonomous society is doing well for the tribes and the businessmen.

Other opportunities to businessmen are under tea estates. Many big Indian businessmen have invested in tea estates of northeast and earn well. The natural weather helps them with the best tea in the world. It has a very well performing gender developing index. For businessmen there are various incentives in bamboo industry as the north east has a big bamboo reserve.

Abundance of natural resource and good climatic conditions makes north east great market for agricultural products like bamboo, tea , silk, cotton and other industries like milk etc.

Sericulture and fish farms are common over there and the locals are very much supported by the council but others are not well supported because the council wants all the primary market to be under the locals so that the tribals are not harmed because most of the locals are tribals or they stay in those areas and which are well versed with tribal culture and customs, their style of living and their problems. So, the council feels that the locals could understand the real effort behind the art and craft and other handicrafts of the north east. They will pay them properly and will help them develop.

Due to so many tax exemptions and various other facilities by the government as well as the autonomous society, makes north east region of India a perfect new investing play ground for the businessmen now. Various private companies are also given offers to construct roads and highways without destroying nature or disturbing the tribes under the surveillance of the autonomous society which helps the tribes in getting jobs and the locals to go for higher education.

It also provides business opportunities and education opportunities to few tribals who want to develop and move forward with the nation. Unfortunately many businessmen are caught violating laws by bribing the members of the society and bribing the tribes too. In few cases they were caught buying animal skin and rhino horns and in other cases the tribal women were molested by the public servant and the businessmen.

These unfortunate incidents should be condemned and strict actions should be taken by the autonomous society as well as the law there. Thus as a whole there are various opportunities as well as drawbacks of the sixth schedule and the law related to it for the businessmen but I personally feel the advantages over power disadvantages and no matter what we will all remain Indians and each state has the right to grow and get benefits of the government.

What are your views on this? Feel free to comment below & share the article.

Bibliography

EXTRACTS from www.ashabharati.org/Dia_04/R.N.Pras.htm

http://www.thestatesman.com/sixth-schedule

www.mcrg.ac.in/civilsocietydialogue3.htm

Schedule six from constitution

Google.com

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In this blog post, Ranjit Krishnan Ramanath, pursuing M.A. in business law from NUJS, Kolkata, talks about the hierarchy of courts and justice system in India.

Abstract

Courts and Justice system in India The courts are divided into three categories with top court, middle court and lower court. The top court is named as the Supreme Court, while the middle court is named as High Court, and the lower court is named as District Court.

This article will provide a detailed discussion about the hierarchical structure of these courts along with the area of activities covered by them. The judicial system will also feature the different aspects of the judicial system with the period taken for getting the disputes dissolved with the present infrastructure of Indian judiciary system.

Introduction

India, being one of the biggest countries in the world with a fabulous population has a very strong judiciary system which is inherent with the structure of the courts and its hierarchy and the judicial system. This system provides livelihood to huge number of professionals attached with the system of judiciary in different forms and thus serve the nation with the service. In this essay, the structural pattern of judiciary system will be narrated with the hierarchical type of courts effectively take part in the judiciary system and the different personalities engaged in this profession to play different roles assigned to them.

Because of the size of the country, the judiciary system is planned as per the requirement of the citizen of India with the location of courts as per status to serve the community of India with efficiency. India has a rich tradition of providing justice to the affected and the courts in various levels are there to serve the purpose of extending highest level of efficient juridical system all over the country[1].

The court structure is set as per the judiciary system prevailing in India with differentiation of applicability as per the merit of the case. The normal trend of the judiciary system is to start any general dispute in the lower court which is being escalated as per the satisfaction of the parties to the higher courts.

The hierarchical structure of court is being endorsed by the Constituency of India with the level of power exercised by the different level of courts. The judgments can be challenged in the higher courts if the parties to the cases are not satisfied. The process of escalation is systematic and thus the system of providing maximum level of satisfaction to the parties is sincerely tried by the judiciary system.

In this present essay, we will highlight the two aspects of judiciary system in India –

• Hierarchy of courts in India
• The judicial system of India

Hierarchy of Indian Courts

The feature Indian judiciary system is its hierarchical structure of courts. There are different levels of judiciary system in India empowered with distinct type of courts. The courts are structured with very strong judiciary and hierarchical system as per the powers bestowed upon them. This system is strong enough to make limitation of court with its jurisdiction and exercise of the power. The Supreme Court of India is placed at the top of the hierarchical position followed by High Courts in the regional level and lower courts at micro level with the assignment of power and exercising of the same for the people of India[2].

Supreme Court of India

Supreme Court of India is the highest level of court of Indian juridical system which was established as per Part V, Chapter IV of the Constitution of India which endorses the concept of Supreme Court as the Federal Court to play the role of the guardian of the esteemed constitution of India with the status of the highest level of court in the status of appeal cases[3].

• Constitution Regulation

• History

• Structure and Application

High Court of India

• Constitution

• Jurisdiction

• Official structure and application

Lower Courts of India

• District Courts

• Constitution

• Structure and Jurisdiction

• Village Courts

• Constitution Structures and Features

 The Hierarchical Structure of Indian Courts

Suggested Reading: Courts & Justice System in China

Judicial System of India

The present judicial system of India is being made effective through the Constitution of India. The judicial system of India is mainly consisting of three types of courts- the Supreme Court, The High Courts and the subordinate courts. The effective rules and regulations are made of the Constitution and other laws and regulation structured mainly upon the basis of British Law with the improvised version suitable for India.

These rules and regulation along with the Constitution are elementary in fixing the composition, jurisdiction and power of the respective courts. The below discussion will highlight the features and the roles of the three types of courts so far the judicial system of India is concerned[12].

Supreme Court- Its role in the judicial system

This court is with the status of the highest level of courts as per Chapter IV of Part V of the Indian Constitution. This court is situated in the capital of India, New Delhi. The panel of judges is comprised of Chief Justice and twenty other Judges.

• Appointment of Judges

• Jurisdiction of Supreme Court

Suggested Reading: Court & Justice System in USA

The Constitution of India has conferred the provision regarding the judicial system through Chapter V of Part Vi for high courts. The main features are discussed below:

• Establishment

• Court of Record

• Appointment of Judges

• Number of Judges

• Qualification of Judges

• Tenure of service

• Salary of Judges

• Revenue

• Writ Jurisdiction and Superintendence

Subordinate Courts of India

Chapter VI of Part VI of the Indian Constitution has made provisions for subordinate courts related to the judicial system. These courts are in the state level under the direct superintendence of High Court. The activities like appointment promotion and posting of judges are made by the Governor of the state by consulting respective High Court.

The criterion of eligibility of district judge is that he must be an advocate for minimum seven years with the recommendation of the respective high court. Respective High Court has the sole discretionary power related to the administrative matters like posting, promotion or leave which can be conferred by the conditions of service as per the law applicable for subordinate courts.

Panchyats

As per the provisions made in Part IV of the Constitutions, the directive of panchyats is fixed which endorses the concept of self governance through Article 40 of this part. The panchayats are there in the rural area to resolve the issues related to civil or criminal issues by following the simple system of informal application to enhance to scope of compromise between the parties. Article 50 had made provision separating the judiciary from the administrative executive deployed in the public services of the state[17].

Conclusion

With the above essay, the hierarchy of the courts and justice system in India had been properly discussed with the emphasis given on the judicial system of the country. It is evident that the role of the Constitution of India plays a major role in this aspect with the help of other rules and laws enforced from time to time to strengthen the judiciary system of the country.

It is often questioned if the three layer judicial system is at all necessary or not for the purpose of running the judicial system of the country. It is evident from the strong base and the proven utility of the courts, that a big country like India does need this existing system of judiciary process to ensure the best possible judiciary to the citizen of India.

It is to be kept in mind the numbers of human resources deployed in the system through direct or ancillary services related to judicial system and with their constant endeavor, the judiciary system proves to be efficient keeping in mind the number of disputes raised everyday and the level of response extended by the courts refer to the disputes.

What are your views on this? Feel free to comment below & share the article.

Bibliography

Clearias. (2014, June 11). The Union Judiciary ie. The Supreme Court (Articles 124-147). Retrieved November 26, 2016, from Clearias: http://www.clearias.com/union-judiciary-supreme-court/

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Gktoday. (2016, February 24). Supreme Court of India. Retrieved November 26, 2016, from Gktoday: http://www.gktoday.in/blog/supreme-court-of-india/

Gupta, A. (2012, November 14). Judiciary System in India. Retrieved November 26, 2016, from Slideshare: http://www.slideshare.net/architgupta792/judiciary-system-in-india

Indianetzone. (2013, May 04). High Courts in India. Retrieved November 26, 2016, from Indianetzone: http://www.indianetzone.com/3/high_courts_india.htm

Ipleaders. (2014, February 28). What is Jurisdiction? Retrieved November 26, 2016, from Ipleaders: http://ipleaders.in/what-is-jurisdiction/

Kamal, R. (2014, September 23). Powers and Functions of Supreme Court in India. Retrieved November 26, 2016, from Importantindia: http://www.importantindia.com/11843/role-and-functions-of-supreme-court-in-india/

Kumar, A. P. (2016, July 12). How many judges does India really need? Retrieved November 26, 2016, from Livemint: http://www.livemint.com/Politics/3B97SMGhseobYhZ6qpAYoN/How-many-judges-does-India-really-need.html

Kurien, A. (2014, November 04). Structure of Indian judiciary. Retrieved November 26, 2016, from Slideshare: http://www.slideshare.net/ajaykurienayroor/structure-of-indian-judiciary

Nic. (2016, February 12). District Courts. Retrieved November 26, 2016, from Nic: http://indiancourts.nic.in/districtcourt.html

Pediaa. (2014, September 29). What is the Judiciary System in India. Retrieved November 26, 2016, from Pediaa: http://pediaa.com/what-is-the-judiciary-system-in-india/

Rana, K. (2014, August 19). Judicial System in India. Retrieved November 26, 2016, from Importantindia: http://www.importantindia.com/12248/judicial-system-in-india/

Sabharwal, Y. (2014). Role of judiciary in good governance. Retrieved November 26, 2016, from Highcourtchd: http://highcourtchd.gov.in/sub_pages/left_menu/publish/articles/articles_pdf/goodgovernance.pdf

Sethi, A. (2014, June 07). Powers and Functions of High court in India. Retrieved November 26, 2016, from Importantindia: http://www.importantindia.com/12418/powers-and-functions-of-high-court-in-india/

sinjini. (2015, February 04). Advisory Jurisdiction (Article 143). Retrieved November 26, 2016, from Lawctopus: http://www.lawctopus.com/academike/advisory-jurisdiction-article-143/

Ssrana. (2015). Indian Court Structure. Retrieved November 26, 2016, from Ssrana: http://www.ssrana.in/Intellectual%20Property/IP-Enforcement-And-Litigation/IP-Indian-Courts-Structure-in-India.aspx

Subramani. (2016, September 24). President clears 15 new judges for Madras high court. Retrieved November 26, 2016, from Indiatimes: http://timesofindia.indiatimes.com/city/chennai/President-clears-15-new-judges-for-Madras-high-court/articleshow/54489476.cms

Reference

[1] Alok Prasanna Kumar, 2016, How many judges does India really need?

[2]  Ssrana, 2015, Indian Court Structure

[3] Gktoday, 2016, Supreme Court of India

[4] Clearias, 2014The Union Judiciary ie. The Supreme Court (Articles 124-147)

[5] Sinjini, 2015, Advisory Jurisdiction (Article 143)

[6] Indianetzone, 2013, High Courts in India

[7] Ipleaders, 2014, What is Jurisdiction?

[8] Subramani, 2016, President clears 15 new judges for Madras high court

[9] Nic, 2016, District Courts

[10]Ecourts, 2015, District Courts of India

[11] Kurien, 2014, Structure of Indian judiciary

[12] Rana Kamal, 2014, Judicial System in India

[13]Rana Kamal, 2014, Powers and Functions of Supreme Court in India

[14] Sethi Anamika, 2014, Powers and Functions of High court in India

[15]Sabharwal, 2014, Role of judiciary in good governance

[16] Archit Gupta, 2012, Judiciary System in India

[17] Pediaa, 2014, What is the Judiciary System in India

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This article is written by Rishabh Pandey from Guru Gobind Singh Indraprastha University, New Delhi.

Introduction

An injunction is a prohibitive writ issued by a court of equity, at the suit of a party complainant, directed to a party defendant in the action, or to a party made a defendant for that purpose, forbidding the latter to do some act, or to permit his servants or agents to do some act, which he is threatening or attempting to commit, or restraining him in the continuance thereof, such act being unjust and inequitable, injurious to the plaintiff, and not such as can be adequately redressed by an action fit law.^[1]

For example, if it so happens that a person is demolishing a building you have possible claims on, you may ask the competent court to order such person to not demolish the building until the trial for the claim of the building is complete and judgement goes in his favour.

The law of injunction has been provided for by the Specific Relief Act, 1963 (hereinafter, the Act), and is also regulated by the Code of Civil Procedure, 1908 in India.

Types of Injunctions in the Indian Law

Generally speaking, there are two types of injunctions under the act^[2], as mentioned below:

1. Temporary Injunction
2. Perpetual/Permanent Injunction

Both the types of injunctions are discussed below.

Temporary Injunction

Temporary injunctions, as the name suggests, are the injunctions that are given for a specific period of time or until the court gives further order regarding the matter in concern. They can be obtained during any stage of the trial and are regulated by the Code of Civil Procedure (CPC), 1908^[3]:

• Section 94: The section provides for supplemental proceedings, to enable the court to prevent the ends of justice from being defeated. Section 94(c) states that a court may grant temporary injunction and in case of disobedience commit the person guilty thereof to the civil prison and order that his property be attached and sold. Section 94(e) of the Code enables the court to make interlocutory orders as may appear to it to be just and convenient.

• Section 95: If it is found by the court that there were no sufficient grounds to grant the injunction, or the plaintiff is defeated in the suit, the court may award reasonable compensation to the defendant on his application claiming such compensation.

• Order XXXIX:
  • Rule 1: It enlists the situations when a court may grant temporary injunction. These are:

• Rule 2: It provides that an interim injunction may be granted for restraining the defendant from committing a breach of contract or other injury of any kind to the plaintiff.
• Rule 3: It states that a court shall direct a notice of application to the opposite party, before granting the injunction to the plaintiff. However, if it seems to the court that the purpose of the injunction would be defeated by the delay, it may not provide the notice.
• Rule 4: It provides for vacation of already granted temporary injunction.
• Rule 5: It states that an injunction directed to a corporation is binding not only on the corporation itself, but also on all members and officers of the corporation whose personal action the injunction seeks to restrain.

In the M. Gurudas and Ors. case^[4], the Hon’ble Supreme Court of India has opined, “while considering an application for injunction, the Court would pass an order thereupon having regard to prima facie, balance of convenience and irreparable injury.”

1. Prima Facie Case: 

Prima Facie literally means, on the face of it. In Martin Burn Ltd. vs. R.N. Banerjee^[5], while discussing a the meaning of the ‘prima facie’ case, the court said:

“A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. While determining whether a prima facie case had been made out the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence.”

Prima facie case is a must to be eligible to obtain a temporary injunction. However, it is not sufficient and temporary injunction cannot be granted if the damage that will be caused if the injunction is not given is not irreparable.^[6]

2. Irreparable Injury:

‘Irreparable injury’ means such injury which cannot be adequately remedied by damages. The remedy by damages would be inadequate if the compensation ultimately payable to the plaintiff in case of success in the suit would not place him in the position in which he was before injunction was refused.^[7]

3. Balance of Convenience:

In the case of Anwar Elahi^[8], the court has clearly explained the meaning of ‘balance of convenience’. According to the court:

“Balance of convenience means that comparative mischief or inconvenience which is likely to issue from withholding the injunction will be greater than that which is likely to arise from granting it. In applying this principle, the Court has to weigh the amount of substantial mischief that is likely to be done to the applicant if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted.”

Permanent Injunction

A permanent injunction can be granted by the court by passing a decree made at the hearing and upon the merits of the suit. Once such decree is passed, the defendant is permanently prohibited from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff.^[9]

When can a permanent injunction be granted?

A permanent injunction may be granted:

a. To the plaintiff in a suit to prevent a breach of an obligation existing in his favour, whether implicit or explicit.^[10] However, in a case where such an obligation arises out of a contract, the court follows the rules as specified by Chapter II of the Act.^[11] Chapter II, under Section 9 provides that a person may claim relief in respect to a contract, by pleading in his defense, any of the ground available to him under any law relating to contracts.

b. In a case where the plaintiff invades or threatens to invade the the plaintiff’s right to, or enjoyment of, property, the court may grant a permanent injunction where:

Mandatory Injunction

If the court finds it necessary and within its capability, to compel the performance of an act, to prevent the breach of an obligation, it may do so granting a mandatory injunction to the plaintiff, compelling the defendant to perform the requisite acts.^[13]

Damages In Lieu of, or in Addition to Injunction

If the plaintiff claims for any additional damages along with the injunction sought for, either perpetual or mandatory, or in substitution of the said injunction, the court may award him such damages, if it thinks fit^[14]. If no damages have been claimed, the court may allow the plaintiff to make the required amendments to the plaint and claim damages^[15].

However, it is highly recommended to claim damages in the plaint before submitting it, as permission for further amendments rests solely at the discretion of the court.

The dismissal of a suit to prevent the breach of an obligation existing in favor of the plaintiff bars his right to sue for damages for such breach.^[16]

Injunction to Perform Negative Agreement

The court can grant an injunction to not do certain acts, which are prohibited by the contract to do. The court may do so even if it is unable to compel the performance of the affirmative terms of the contract, i.e. the terms that requires the defendant to do (perform) certain acts. However, it is subject to the fact, whether the plaintiff has performed the terms of the contract binding on him or not. Non performance by the plaintiff dis-entitles him from obtaining such an injunction.^[17]

Case Laws Regarding Permanent Injunction

In the case of  Jujhar Singh vs. Giani Talok Singh^[18] where a permanent injunction was sought for by a son to prevent his father who happened to be the Karta of the Hindu Undivided Family (HUF), from selling the HUF property was set aside. It was not maintainable because the son, also a coparcener, had got the remedy of challenging the sale and getting it set aside in a suit subsequent to the completion of the sale.

On the other hand, granting the injunction sought would allow the son to use the injunction to prevent the father from selling the property even if he is compelled to do so, due to legal necessities.

Where in the case of Cotton Corporation Of India vs. United Industrial Bank, an injunction was sought for to restrain the defendants from presenting a winding-up petition under the Companies Act, 1956 or under the Banking Regulation Act, 1949, the court dismissed the petition as it was not competent to grant, as a relief, a temporary injunction restraining a person from instituting a proceeding in a court not subordinate to it.

The court here was of the view that if a perpetual injunction cannot be granted for the subject matter of the case under Section 41(b) of the act, ipso facto temporary injunction cannot be granted.^[19]

Grounds for Rejection of an Application for Injunction

On the following grounds, an injunction cannot be granted:

1. To restraint a person from prosecuting a pending judicial proceeding, unless it is to prevent multiplicity of the proceeding.
2. To restraint a person from instituting or prosecuting a judicial proceeding in a court, where the injunction is sought from a court subordinate to that court.
3. To restrain any person from applying to any legislative body.
4. To restrain any person from instituting or prosecuting any proceeding in a criminal matter.
5. To prevent the breach of a contract the performance of which would not be specifically enforced (Illustration: a contract between a master and servant, requiring the servant to render personal services to the master cannot be specifically enforced by the master or the servant. Hence, an injunction cannot be granted in this situation)
6. Where it is not reasonably clear that an act it nuisance, to prevent such an act on the ground of nuisance.
7. To prevent a continuing breach in which the plaintiff has acquiesced, as the general rule is that an acquiescence is an implied consent by remaining silent.
8. Where except in the case of breach of trust, equally efficacious relief can certainly be obtained by any other usual mode of proceeding.
9. When the conduct of the plaintiff or his agents has been such as to dis-entitle him to the assistance of the court.
10. When the plaintiff has no personal interest in the matter.^[20]

Reference:

^[1] Black’s Law Dictionary

^[2] Sections 36 of the Specific Relief Act, 1963

^[3] Section 37(1) of the Specific Relief Act, 1963

^[4] M. Gurudas and Ors. Vs. Rasaranjan and Ors. AIR 2006 SC 3275

^[5] 1958 AIR 79, 1958 SCR 514

^[6] M/S Best Sellers Retail(I)P.Ltd vs M/S Aditya Birla Nuvo Ltd.& Ors (2012) 6 SCC 792

^[7] Orissa State Commercial Transport Corporation Ltd. v. Satyanarayan Singh, (1974) 40 Cut LT 336

^[8] Anwar Elahi vs Vinod Misra And Anr. 1995 IVAD Delhi 576, 60 (1995) DLT 752, 1995 (35) DRJ 341

^[9] Section 37 of the Specific Relief Act, 1963

^[10] Section 38(1) of the Specific Relief Act, 1963

^[11] Section 38(2) of the Specific Relief Act, 1963

^[12] Section 38(3) of the Specific Relief Act, 1963

^[13] Section 39 of the Specific Relief Act, 1963

^[14] Section 40(1) of the Specific Relief Act, 1963

^[15] Section 40(2) of the Specific Relief Act, 1963

^[16] Section 40(3) of the Specific Relief Act, 1963

^[17] Section 41 of the Specific Relief Act, 1963

^[18] AIR 1987 P H 34

^[19] 1983 AIR 1272, 1983 SCR (3) 962

^[20] Section 41 of the Specific Relief Act, 1963

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This article is written by Pradipta Nath, a practicing lawyer.

The application of ESIC Act over Employee’s Compensation Act, 1923 can be sub-served in this, ‘BIRD’ model as formulated here-under for its easy projection.

1. ‘B’ – Barred provision/s under the ESIC for availing benefit/s under other provision/s of other enactment/s.
2. 53 under the Employees State Insurance Act, 1948 read as: –

Bar against receiving or recovery of compensation or damages under any other law

An insured person or his dependants shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen’s Compensation Act, 1923 or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act.

1. 61 under the ESIC Act read as: –

Bar of benefits under other enactments

When a person is entitled to any of the benefits provided by this Act, he shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment.

2. ‘I’ – Interpretation of S. 53 & 61
3. To apply the bar created in Section 53 of the E.S.I. Act., the person must be a workman, insured person under the E.S.I. Act. He should have sustained injury, contacted occupational disease or lost his life due to such injury or disease and they must have ‘arose out of and in the course of his employment’. Such injury is statutorily known as employment injury. It need not be occasioned to him only inside the factory premises. By “notional extension of employer’s premises theory” even if such injury is sustained by him outside his factory premises, outside his working hours, it may become employment injury provided it arose out of and in the course of his employment. There must be some connection, nexus between the circumstances under which such injury was sustained by him and his employment/job. It depends on the facts and circumstances of each case. (The New India Assurance Co. Ltd vs S.Govindaraj on 15 June, 2012)

1. Section 61bars claiming of compensation for employment injury under the provisions of any other enactment other than the E.S.I. Act. Section 61 mentions enacted laws, while Section 53 speaks about a particular enacted law, namely, Workmen’s Compensation Act, 1923 and also other laws, namely, uncodified law, namely, Common Law. Reading Sections 53 and 61 of the E.S.I. Act together we see that they bars claiming of compensation for employment injury not only under enacted Laws but also under unenacted, uncodified General Laws also. (The New India Assurance Co. Ltd vs S.Govindaraj on 15 June, 2012)

3. ‘R’ – Relevant Case Law: –

1. It was held in A. Trehan vs. Associated Electrical Agencies and Another (1996) 4 SCC 255, that the legal heirs would not be entitled to get compensation under the 1923 Act as he was an insured person.

1. The aforesaid authorities make it eminently clear that once an employee is an “insured person” under Section 2(14) of the 1948 Act, neither he nor his dependents would be entitled to get any compensation or damages from the employer under the 1923 Act.

(Dhropadabai and Others Vs. M/s. Technocraft Toolings, CIVIL APPEAL NO.8155 OF 2014) http://supremecourtofindia.nic.in/FileServer/2015-03-25_1427268447.pdf

• In the case of Managing Director and others v. L.Rs. Of Devi Lal and others: 2007 (1) T.A.C. 491 (Raj.), a Division Bench of the Rajasthan High Court took the view that mere negligence on the part of the workman, which may have resulted in the accident does not take away the case from the purview of employer’s liability to pay compensation, if he has suffered injuries in an accident arising out and in the course of employment.

4. ‘D’ – Distinguish between the ESIC Act and the Employees Compensation Act:-

The aforesaid provision (S. 53 under ESIC Act) came to be interpreted by a two-Judge Bench in A. Trehan’s case, wherein the Court after reproducing the said provision and taking note of the definition of workman as provided under Section 2(1)(n) of the 1923 Act, came to hold as follows: “A comparison of the relevant provisions of the two Acts makes it clear that both the Acts provide for compensation to a workman/employee for personal injury caused to him by accident arising out of and in the course of his employment. The ESI is a later Act and has a wider coverage. It is more comprehensive. It also provides for more compensation than what a workman would get under the Workmen’s Compensation Act. The benefits which an employee can get under the ESI Act are more substantial than the benefits which he can get under the Workmen’s Compensation Act. The only disadvantage, if at all it can be called a disadvantage, is that he will get compensation under the ESI Act by way of periodical payments and not in a lump sum as under the Workmen’s Compensation Act. If the Legislature in its wisdom thought it better to provide for periodical payments rather than lump sum compensation its wisdom cannot be doubted. Even if it is assured that the workmen had a better right under the Workman’s Compensation Act in this behalf it was open to the Legislature to take away or modify that right. While enacting the ESI Act the intention of the Legislature could not have been to create another remedy and a forum for claiming compensation for an injury received by the employee by accident arising out of and in the course of his employment.”

With ending the string of discussion, would like to conclude that in case an employee cannot avail benefit under the ESIC scheme, he can make avail of it under the other enactments.

Special enactments like ‘Employees Compensation Act’ states in its ‘Preamble’;

PREAMBLE.- An Act to provide for the payment by certain classes of employers to their *[Employees] of compensation for injury by accident.

Whereas it is expedient to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident….

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In today’s world, with the impetus given to the Intellectual Property a Non-Disclosure Agreements (NDA) has become an obvious necessity.  Be it, a proprietary software, a patent or just documents – an employer, to stay relevant need to make sure that their confidential information should remain within their domain and not end in the hands of their competitor. In the current world, a slight edge over a competing business could mean a world of difference and an entity should not be made to lose it for lack of a NDA.

The concept of trade secret was defined in Ambiance India Pvt. Ltd. v. Shri Naveen Jain ^[1],  where it was held that ” a trade secret is some protected and confidential information which the employee has acquired in the course of his employment and which should not reach others in the interest of the employer. However, routine day-to-day affairs of employer which are in the knowledge of many and are commonly known to others cannot be called trade secrets. A trade secret can be a formulae, technical know-how or a peculiar mode or method of business adopted by an employer which is unknown to others.”

Even though the Indian Contract Act, 1872 (Contract Act) does not explicitly envisage a NDA, the same could be considered as ‘restrictive’ agreements in terms of Section 27 of the Contract Act[2] and hence void. The only exception being in the case of sale of goodwill of a business whereby a buyer may be refrained from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided such local limits are reasonable.

Negative covenant enforceable during the term of employment

In the case of Niranjan Shankar Golikari [3]  the Apex Court held Negative covenants operative during the period of the contract of employment when the employee is bound to serve his employer exclusively are generally not regarded as restraint of trade and therefore do not fall under Section 27 of the Contract Act. Meanwhile, in Wipro Ltd. v. Beckman Coulter International S. A[4]  the court held that negative covenants between employer and employee contracts pertaining to the period post termination and restricting an employee’s right to seek employment and/or to do business in the same field as the employer would be a restraint of trade and therefore, a stipulation to this effect in the contract would be void.

Is an NDA in restraint of trade?

The Bombay High Court in VFS Gobal Services Pvt Ltd [5] held that a clause prohibiting an employee from disclosing commercial or trade secrets is not in restraint of trade. The effect of such a clause is not to restrain the employee from exercising a lawful profession, trade or business within the meaning of Section 27 of the Contract Act.

While the Delhi High Court in Mr. Diljeet Titus, Advocate v. Alfred A Adebare and Ors.[6] restrained the Defendant from misappropriating the information including the lists of clients and other information forming the database of the firm, in Burlington Home Shopping Pvt. Ltd. v. Rajnish Chibber[7]  granted injunction restraining the Defendants from using the compilations, database comprising the list of the clients and in Escorts Const. Ltd v. Action Const.[8], restrained Escorts from manufacturing, selling or offering for sale the Pick-N-Carry Mobile Cranes that were a substantial imitation or reproduction of their industrial drawings.

Conclusion

From the above line of the decisions we can see the courts have tried to draw a line between the rights of the employer and employee. In cases where the confidential information or trade secret is at stake and the same is not available in the public domain then an employer can enforce an NDA, provided that the employee cannot be confronted with decision of either working for the employer or remain idle. An NDA could be enforced only if the restraint imposed was only with respect to not using the confidential information they acquired from their employment and not with respect to carrying on a similar service.

[1] 2005 (81) DRJ 538

[2] Section 27 of the Contract Act provides that ‘every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.’

Exception 1: Saving of agreement not to carry on business of which good will is sold – One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the court reasonable, regard being had to the nature of the business

[3] Niranjan Shankar Golikari v. The Century Spinning and Mfg. Co. 1967 AIR 1098

[4] 2006 (3) ARBLR 118 (Delhi)

[5]  VFS Global Services Private v. Mr. Suprit Roy 2008 (2) BomCR 446.

[6] 2006 (32) PTC 609 (Del.), On termination of employment, the defendant took away important confidential business data, such as client lists and proprietary drafts, belonging to the plaintiff.

[7] 1995 (35) DRJ 335, The Court went on to hold that such database in fact amounted to a copyright and thereby deserved protection.

[8] AIR 1999 Delhi 73

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Written by Venkata Kiran Kumar Nedunuri , pursuing Certificate Course in Insolvency and Bankruptcy Code as part of his coursework.  Venkata is a Project Manager at Tech Mahindra. He holds various other credentials which includes MBA, PGDBM, PGDCL and IPR, LLB. 

When an Individual or an Entity is unable to meet its outstanding debts to the investors, creditors or lenders is termed as Insolvent and this state is called Insolvency. Insolvency can be resolved by two ways as mentioned below:

1. Modifying the repayment plan to the creditors or investors.
2. Selling off the assets of the company and paying back to the creditors or investors from the sale proceeds of the assets.

It would be more precise to understand and the Insolvency Resolution Process stage wise in detail as laid out in the code.

Initiation

Inability to pay back the amount to its creditors or investors or lenders on time and also for a very long time by any corporate or business entity, makes a company to be insolvent and this state is called as insolvency for which the application of insolvency is submitted to the National Company Law Tribunal (NCLT) by anyone of Financial Creditor or Operational Creditor or Corporate Debtor himself.  In case of corporate debtor himself, the operational creditor has to send a prior notice of demand for 10 days to the corporate debtor before the initiation of insolvency resolution process.

Bank or Financial institution or any other lender or anyone providing loan, credit facility or other financial assistance falls into the category of “Financial Creditors”

Someone who has been extended a payment of credit during the course of business is an “Operational Creditor”. Suppliers and service providers are covered under this provision.

Insolvency Resolution process by a Financial Creditor

1. Financial creditor either by himself or jointly shall initiate filing of application before NCLT against the corporate debtor for insolvency proceedings.
2. The proof of default and the name of the proposed insolvency professional to be appointed shall be submitted along with the application

Financial Creditors under Section 7 of IBC, 2016 by Operational Creditors under Section 9 of the IBC, 2016 and by the Corporate Debtor himself under Section 10 of the IBC, 2016.

1. NCLT may reject the application if it is of the opinion that the corporate debtor is not default or if there is any proceeding pending against the proposed resolution professional.
2. Within fourteen days of making application to it, NCLT has to entertain the application.

Insolvency Resolution process by an Operational Creditor

1. An operational creditor will have to serve 10 days of prior notice to the corporate debtor asking him to pay back the dues before initiating insolvency resolution process.
2. In the event of corporate debtor not paying back the amount in that time period and doesn’t bring to the notice of operational creditor about any dispute or any arbitration proceeding pending against it then the operational creditor can file application for insolvency resolution.

Insolvency Resolution by the Corporate Debtor

As per provisions contained in Chapter- II of the Code, where a corporate debtor has defaulted on the payment of dues to a financial or operational creditor, the corporate debtor or any applicant (i.e. the financial or operational creditor) can file the application for the initiation of insolvency resolution process along with the books of accounts and other financial documents of the business. Furthermore, as per Section 10 (3) (b) the corporate debtor shall also file the name of the proposed resolution professional along with the application.

Time period for the completion of the insolvency resolution process

As per Section 12 of the IBC the insolvency process must be completed within 180 days from the date of initiation in the National Company Law Tribunal. The claims of the Creditors shall be frozen for a period of six months on admission of application by NCLT. No legal claim shall be sought against the corporate debtor in any other forum or court unless liquidation process is initiated or a resolution plan is made. In all the above situations the application for initiation of insolvency resolution must be admitted or rejected by NCLT within 14 days of application before it. Further as per section 16 of the Code NCLT shall appoint the interim insolvency professional with the permission of insolvency and bankruptcy board within 14 days of admitting the application.

Public announcement of Moratorium

Upon the admission of insolvency resolution application before it, NCLT will make a public announcement for the submission of claims by the creditors. Also, NCLT appoints the interim resolution professional.

Moratorium

The moratorium will be declared by the NCLT for prohibiting the following: 

1. Institution of any suit or pending suit including execution of any judgement or decree against the corporate debtor.
2. Transferring, encumbering, alienating or disposing of any property or right or beneficial interest.
3. Any action to foreclose, recover or any security interest created by the corporate debtor in respect of his property.
4. Recovery of any property by the owner or lessor which is under the possession of the corporate debtor.
5. Terminate the supply of goods and services to the corporate debtor.

On the date on which the resolution process is approved or on the date of liquidation order the moratorium shall cease to have effect. Insolvency resolution professional or Committee of creditors do not have any powers, conferred by the Code, to invalidate / withdraw or cancel any of the pending actions or proceedings involving the corporate debtor. There will be no impact on the proceedings which are pending before the imposition of moratorium except that during moratorium period, such proceedings or actions will be adjourned sine die.

In case of Canara Bank V. Deccan Chronical Holdings Ltd.  the National Company Law Tribunal (Hyderabad) held that the power of the Hon’ble Supreme Court Article 32 of the Constitution of India and Hon’ble High Courts under Article 226 of Constitution of India cannot be curtailed by any provision of an Act or a Court. Therefore the moratorium under IBC excludes these proceedings under the Constitution.

Role of Insolvency Professional

1. Interim resolution professional(IRP) is appointed by NCLT within 14 days from the insolvency commencement date and the term of his appointment shall not exceed 30 days from the date of appointment.
2. Manages the operation of the corporate Debtor as a going concern and protect and preserve the value of property and also take control and custody of assets which the Corporate Debtor has the ownership.
3. Receive and collate claims from creditors.
4. The officers and managers of the Corporate Debtor shall report to the Interim resolution professional (IRP) and provide access to all the documents and records pertinent to the Corporate Debtor.
5. Accounts of Corporate Debtor maintained by the financial institutions shall be furnished to the IRP. Also, IRP shall have access to the records and documents of corporate debtor available with government authorities, statutory auditors, accountants etc.
6. IRP shall have access to the electronic records of the corporate debtor.

Formation of Creditors’ Committee

Insolvency professional after submission of claims by all the creditors shall form a creditor’s committee and all the creditors who have submitted the claims shall be a part of creditors’ committee. As per Section 21 (2) of the Code, the creditors’ committee shall consist of only financial creditors. Any resolution plan can be implemented only if it has the approval of 75% of the creditors with voting right in accordance with the voting share assigned.

As per Section 24 (3) (c) of the Code, operational creditors having aggregate dues of at least 10% of the total debt are only given the notice of the meeting. Operational creditors cannot be the members of the committee and it is irrespective of the claim size.

The decision of the Creditors’ Committee with respect to the reason of inability of the corporate debtor to pay back the debts, whether it is a business or financial crisis, shall pave the way to the committee to either go for restructuring plan to the creditors or for liquidation process.

• Creditors committee shall hold their first meeting within seven days of appointment and may appoint a final insolvency resolution professional or may give affirmation to the interim insolvency professional to be appointed as insolvency professional with the approval of 75% votes of the creditors of the creditors committee.
• The partners, directors will not have voting rights but they shall attend the meeting.
• Operational creditors shall have one representative joining the meeting on behalf of them but the representative shall not have the voting right.

To enable the resolution applicant to form a resolution plan, the resolution professional shall prepare an information memorandum. Resolution professional shall, if satisfied by the restructuring of repayment plan submitted by the resolution applicant, present the plan to the Creditors’ committee for approval. The plan will be confirmed based on the 75% of votes of the creditors of the Creditors’ committee in favour.

If the approval is obtained then NCLT will order the execution of the restructuring plan in a prescribed manner.

The moratorium shall cease to have effect after the approval by NCLT and the resolution professional will forward all the records and documents to the board of directors to conduct the insolvency resolution process effectively.

Jaypee Infratech Insolvency Case

Brief Facts

The Jaypee Infratech” project started its “wish town city” project in Noida. Jaiprakash Associates Limited ( JAL) and Jaypee Infratech Limited are two subsidiary companies of Jaypee Group. JAL allocated the letters to the homebuyers and JIL received the payments from around 35000 homebuyers. It collected 25000 crore rupees from around 35000 homebuyers. Years after its inception the project remains abandoned and merely a skeleton has been built for the purpose of appeasing the homebuyers. Buyers have alleged that the money collected for the Wish Town city was diverted to its other marquee projects like the Formula 1 circuit and the Yamuna Expressway.

Aggrieved by the pace of the project a small group of homebuyers approached the National Consumer Disputes Redressal Commission (NCDRC) but the commission did not adjudicate on the same. The situation changed as Supreme Court bench headed by the Chief Justice of India, Dipak Misra, agreed to hear the case through a public interest litigation (PIL). Before Supreme court agreed to hear the case, the matter came up before the Allahabad bench of National Company Law Tribunal (NCLT) after a petition by the IDBI which advanced a loan that amounted to approximately 526 crore rupees to the company. The company did not pay back to the bank and since the bank was a secured creditor it had the right to ask for Insolvency Resolution Process under Section 7 of the IBC, 2016.

On August 9th 2017, the Allahabad bench of NCLT ordered the appointment of any Insolvency Resolution Professional (RP) after IDBI bank sought initiation of bankruptcy proceedings against the company. If the NCLT admits a petition on insolvency, the board of the company concerned is suspended and an interim resolution professional within 180 days after its appointment has to turn the company around. The company goes into liquidation automatically should nothing materialize within 270 days. The NCLT has appointed an insolvency professional on 10th August 2017 providing thousands of buyers in Jaypee projects two weeks to raise claims pertinent to their properties.

Anuj Jain, appointed by the National Company Law Tribunal, to take over the management of Jaypee Infratech Ltd. and asked its parent company to deposit Rs 2,000 crore. The IRP was to submit the interim resolution plan to court within 45 days considering the interest of the homebuyers.  

On September 4th 2017, Supreme Court (SC), stayed the NCLT order initiating insolvency proceedings against Jaypee Infratech. The 30000 homebuyers whose position has become weak after 9th August NCLT order. Their status was unclear under the Code despite paying 90% of the price without being handed over the flats and kept pending for long.

The order from Supreme Court came following a writ petition filed by one of the homebuyers Chitra Sharma. The court has issued notices to all parties, the company, the Noida Authority and the UP government including the Centre. The petitioner Chitra Sharma through her representative, Aishwarya Sinha, was questioning the constitutional validity of the insolvency code owing it’s not recognising the right of homebuyers.

On January 8th 2018, Reserve Bank of India (RBI) moved the Supreme Court seeking permission to initiate insolvency proceedings against Jaiprakash Associates Ltd. Jaiprakash Associates, parent company of Jaypee Infratech Ltd, is among the 12 companies against which the RBI asked banks to file insolvency petitions.

On February 12th 2018, NCLT has extended resolution process by 90 days as 180-day timeline expired owing to banks’ seeking a 90-day extension from NCLT to enable them to have sufficient time to reassess defaulters under IBC norms.

On March 21st 2018, The Supreme Court allowed pro-rata disbursement of claims of homebuyers who had opted for refund of their money.

On May 10th 2018, lenders of Jaypee Infratech rejected Lakshadweep offer of resolution. Lakshadweep, chosen by the Committee of Creditors (CoC) as the highest bidder, had offered to buy the realty company for a Rs 28-billion loan dues write-off. Lakshadweep is a joint venture between Suraksha Asset Reconstruction Company and Mumbai-based Dosti Realty.

On May 16th 2018, The Supreme Court stayed the liquidation proceedings against Jaypee Infratech while asking the promoters to deposit Rs.1000 crore by June 15th to refund homebuyers.

Conclusion

The vital factor in the entire gamut of proceedings is the fact that the homebuyers weren’t adequately represented in the IBC, 2016 and weren’t falling under the ambit of secured creditors though the Apex Court felt the urge to save the homebuyers. The Supreme Court to protect the interest of the homebuyers the group to deposit 2000 crore rupees to its registry. Owing to these facts on June 6th 2018, President Ram Nath Kovind has given his nod to promulgate an ordinance amending the insolvency law, recognizing homebuyers as financial creditors. Under the Insolvency and Bankruptcy Code Amendment Ordinance, 2018, homebuyers will get a representation in the committee of creditors (COC) making them an integral part of the decision making process. However, the amended Code doesn’t specify whether homebuyers will be treated as secured or unsecured creditors. Homebuyers would be able to invoke Section 7 of IBC,2016 against errant developers. Following the amendment of the Code, The Supreme Court on 9th August 2018, has ordered that the insolvency case of Jaypee Infratech be returned to the NCLT and the entire proceedings to be restarted with the amendments not being retrospectively applicable though.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills. This course also provides all other processes and drafting related to IBC.  

References

1. http://www.mondaq.com/india/x/682398/Insolvency+Bankruptcy/Jaypee+Infratech+Insolvency+Case
2. https://timesofindia.indiatimes.com/city/delhi/sc-sends-jaypee-infra-back-to-nclt-as-buyers-ask-for-flats/articleshow/65345783.cms
3. https://thewire.in/business/the-supreme-court-was-right-to-pierce-the-jaypee-groups-corporate-veil
4. https://www.timesnownews.com/business-economy/companies/article/jaypee-infratech-insolvency-case-all-you-need-to-know/74067
5. https://www.indiatoday.in/india/story/hope-for-homebuyers-in-supreme-court-s-ruling-on-jaypee-infratech-1310513-2018-08-10
6. https://timesofindia.indiatimes.com/business/india-business/jaypee-infra-insolvency-case-home-buyers-can-raise-claims-till-aug-24/articleshow/60013164.cms
7. https://www.moneycontrol.com/news/business/real-estate/lakshdeep-investments-finance-open-to-revising-its-jaypee-offer-2573965.html
8. https://timesofindia.indiatimes.com/business/india-business/govt-promulgates-ibc-ordinance-home-buyers-to-be-treated-as-financial-creditors/articleshow/64479822.cms
9. https://economictimes.indiatimes.com/news/economy/policy/big-relief-for-home-buyers-president-approves-ordinance-to-treat-them-as-creditors/articleshow/64478712.cms
10. https://www.business-standard.com/article/companies/in-relief-to-over-30-000-homebuyers-sc-stays-jaypee-insolvency-proceedings-117090400472_1.html

The post Process of Insolvency Resolution under IBC (Insolvency and Bankruptcy Code) appeared first on iPleaders.

Written by Saanvi Singla , pursuing  Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions)  offered by  Lawsikho as part of his coursework.  Saanvi is a 5th year Law student at UILS, Panjab University and pursuing B.A. LLB (Hons.).

In any corporate transaction that is involved in acquiring any business or a stake in a business, it is the duty of the acquirer to conduct a proper due diligence of the target company’s assets and liabilities, in order to determine whether that business is worth being acquired in the long term and to analize any form of risks to the business. The acquirer must weigh the extent of the value of the assets, liabilities and potential risks that could be associated with the transaction and finally negotiate a fair prize for the transaction.

Intellectual property (IP) due diligence has become an integral part of the process of legal due diligence process.  Most times a huge amount is at stake with in respect of intangible assets of the target business, particularly in these times. So, the main task of IP due diligence is to investigate the intellectual intangible assets of a business, checking any valid or invalid IPRs subsisting therein and the scope of their protection, understanding the risks involved and in turn, assessing their current potential value.

The Volkswagen-Rolls Royce deal: An eyeopener

Ignoring crucial aspects of any type of intellectual property during the process of due diligence can actually cost a buyer / investor a ton of money. The Volkswagen-Rolls Royce deal of 1998 is the perfect example in this regard. Volkswagen at that time was quite interested in acquiring Rolls Royce and thus owning the automobile brands of Rolls Royce and Bentley. So, Volkswagen acquired Rolls Royce Motor Cars Ltd for a sum of $790 million. The irony of the whole acquisition deal was that till the end of the transaction, Volkswagen had no idea that it had merely acquired the right to the factory, facilities and right to make and sell the respective cars only for a period of 5 years along with the rights to use the marks of Bentley and Rolls Royce. They had in no way acquired the ownership over the name and brand Rolls Royce. In reality, the brand Rolls Royce was actually owned by its parent company with the name Rolls Royce Plc, and the parent company was mostly interested in granting license and further transferring the ownership to the competing group, BMW. After 5 years from the period of the so-called acquisition, BMW in the end became the exclusive right holder of brand of Rolls Royce and also acquired the rights to manufacture Rolls Royce vehicles. By not being vigilant and careful about assessing the true state of IPR ownership relating to Rolls Royce, Volkswagen had to pay a superfluous amount of money for the return it received from the abovementioned deal. This case has proved to be one of the best examples to show how undermining the importance of IP due diligence during any commercial transaction can lead to unprecedented and completely avoidable losses to the buyers / investors.

Points for Maximum Diligence

IP due diligence is an integral part of any M&A transaction in today’s world and is an essential in transactions such as project finance, joint ventures, investment (PE / VC) transactions, issuance of new stocks and securities etc. In spite of there being different sets of requirements for investigation, analysis, and valuation of various target companies, the below mentioned are the general requirements in an IP due diligence exercise for mostly all corporate transactions these days.

Identification of relevant ‘protected’ and ‘protectable’ subject matters under IP laws

The first and most basic action would be to comprehend the essential nature of target’s business and to properly identify all the intangible subject matters that are relevant to the business and will be the main subject matter of the investment or acquisition. The said subject matters could easily be ‘protected’ by registration of Trademarks, Copyrights, or Patents as applicable. The target must have taken some appropriate measures to guard its subject matters or products under the given IP laws. The target company may not have identified the subject matters that need protection. It is for precisely this reason that the first step in any case of IP due diligence is proper identification of protected and protectable subject matter.

If the given business is technology / product / software based, its new products, technologies, designs, unique business methods, and the like will be its principal IP-protectable subject matter. The same will later give rise to design rights, patent rights, trade secrets and/or copyrights as its important IP apart from the trademarks.

Analysis of IP rights over the subject matter (status check)

Once all the subjects have been identified, the next logical step is to check if all the specific IP rights that have been registered in favour of the target or are required to be registered by it. It is not only imperative to identify all the relevant IP-protectable subjects, but it is essential to identify whether such subjects meet the requirements for protection the under IP laws.

For the protection of know-how of a particular product, information and ideas, there are absolutely no statutory laws in India that govern, protect and regulate the same. The principles to protect the same have only been formulated under the common law (only through judicial pronouncements). Hence, appropriate steps should be taken to protect any type of significant business information, methods, pricing formulas and customer information, as trade secrets and confidential information should be concealed by way of non-disclosure and confidentiality agreements.

Check for applicable territory and terms (validity check)

Most of the IP rights are only valid for limited period and territories. One has to individually protect their IPs in all its areas of operation with the exception of copyright. According to the Berne Convention for the Protection of Literary and Artistic Works, if the copyright of any subject matter is protected in one of the countries that is a part of the Berne Union, then the same copyright shall also valid in the other member countries. Hence, it is also imperative to examine the particular territories in which the relevant IP rights are applicable or protected. If the target has operations in various countries, but it’s important IPs have not been protected and/or registered in all those jurisdictions, the same could become a major issue in the future for the prospective buyer / investor. In the process of IP due diligence process, the validity and the terms of validity should be checked.

Check for the origin of IP rights creation (ownership check)

This is one of the most important aspects of any IP due diligence: Determination of the Ownership. If the target is not the owner of a particular IP asset then it cannot transfer any title, rights and interests in the same to the investor.

When there are numerous associated parties, like a parent company, foreign associate companies, subsidiaries, etc., it is quite possible in this scenario that the IP is actually in the name of the associated units and the target merely possesses the right to utilize the same. Many a times, the companies that hold the IP rights are separately incorporated by corporate groups. In this case the specific IP holding companies own all IP rights and further grants limited rights to use to its associate companies, wherever deemed necessary, for utilizing the IP rights it owns.

Unless the complete ownership of relevant IP rights is completely transferred to the target before the transaction, the returns to the buyer / investor so far as they relate to the full utilization of the same, will indeed be at stake.

Third-party’s claims on the IP rights involved (claim check)

Any type of third-party claims or interests with respect to the relevant IP of the target is required to be checked out. This is primarily done to determine whether any third party has any kinds of rights or interests over the relevant IP. So, scrutiny of all joint venture agreements, license and franchise agreements, memorandum of understandings, distributorship contracts, etc., should be carefully done to determine if any exclusive rights have been granted in relation to relevant IP.

Due diligence in Intellectual Property is a tedious and tricky process. But as the saying goes-Better be safe (Diligent) than sorry.

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

The post Five Points to Note About Conducting Due Diligence of Intellectual Property of Investee appeared first on iPleaders.

Written by Vatsal Dhar , pursuing  Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution offered by  Lawsikho as part of his coursework.  Vatsal is a Legal Professional and a graduate in BBA LLB from Symbiosis Law School, Noida.

KYC i.e. Know Your Customer is a very popular term used in the business sphere. It is a term related to the process of customer identification in which an individual is said to enter into a transaction by opening an account with a financial entity. The entire process of KYC is concerned with gathering certain information from and about the end user, validating, verifying the same information and ensuring that the personal details are fair, genuine and true in every manner. Such verification can be done before entering into a transaction or during any time between the operations of the business.

The rise of KYC policies has been emergent very lately while expanding and becoming very important globally as well. KYC policies have now evolved into an important combat tool against illegal or malafide transactions in the financial sector. KYC helps the companies in protecting themselves by ensuring compliance and maintaining appropriate business standards with legitimate entities. It also helps in protecting the individuals who might otherwise be harmed by financial crime. In recent times, various banking institutions, corporate houses, organizations, credit agency, and insurance companies have become big supporters in adopting the KYC policy as it helps them in verifying their client’s real identity. Also, it helps them in identifying and tackling the issue of money laundering, bribery, concealment of money, terrorist financing and corruption related practices at a much earlier stage than expected.

A customer, individual or an investor can get their respective KYC done through submission of relevant government identity cards and supporting documents such as Permanent Driving License, Aadhar Card, valid Passport, Permanent Account Number (PAN), Voter ID Card, Ration Card, Photo ID, NREGA Card etc. It can also be done through address proof (the property owned by the individual) or by property tax, municipal receipts or in-person verification by self-attesting the same.

There are generally two types of KYC which govern individuals and segregate between them:

In the first type of KYC, it is prescribed by the Central KYC registry (CKYC). It basically includes all the basic and uniform KYC details of the individual or investor as and is said to be used by all registered financial intermediaries.

The second type of KYC comprises of all other additional KYC information as may be sought separately by the financial intermediaries such as a Mutual Fund, stockbroker, depository participant opening the investor’s account.

Procedure/ How does it work

Most financial corporations and institutions initiate their KYC procedures by simply collecting and gathering information about their customers by using electronic identity verification also known as a “Customer Identification Program”. Certain personal information such as name, social security numbers (SSN), PAN no., Aadhar card no., date of birth, address (both permanent and current) can be very useful when determining whether or not an individual had been involved in a financial crime previously or not.

After the data has been collected, it is then compared to different lists of individuals with a criminal record or involved in any kind of corruption practices, names present on sanctions list, Politically Exposed Person (PEP) suspected of being involved with a crime, or at a high risk of partaking in bribery or money laundering.

The bank then measures the risk involving the ratio of the client and how likely they are to become involved in corrupt or illegal activity in near future. Once this calculation has been made, the banks can analyze what the client’s account condition might look like in future going as per current records. All the client’s account activity can be managed and monitored consistently by the bank in case it finds anything to be suspicious or out of place.

Many a time, banks also may compare clients with a similar background, location, job profile, field of expertise and salary. It helps them in analyzing better and comparing people as most of them would have a similar statement record from the other if not exact.

How to check the KYC Status?

One can easily check the KYC status by logging into the website of the following financial services companies with whom their funds are tied up with.

1. CDSL Ventures Ltd. CVL – https://www.cvlkra.com/
2. NSE (DotEx International) – https://www.nsekra.com/
3. NSDL Database Management Ltd (NDML) – https://kra.ndml.in/
4. CAMS – https://camskra.com/Home.aspx
5. Karvy – https://www.karvykra.com/‎

What are CKYC Norms?

We now know that Know Your Customer (KYC) is one-time exercise while dealing in securities markets. Central KYC (CKYC) is an initiative by the government to bring all financial sector entities under one single roof. Once a customer has undergone KYC through a SEBI registered intermediary then it is not bound to undergo the same process again and again while approaching another intermediary for its financial services.

To add to the above, the KYC records of the clients are stored, managed and safeguarded in digital form by Central KYC Registry (CKYCR) also known as CERSAI (Central Registry for Securitization Asset Reconstruction and Security Interest of India), an entity substantially owned and controlled by central government. Central KYC Registry is a centralized repository or a register filled with KYC records of customers in the financial sector with uniform KYC norms. Its main objective is to reduce the burden of producing KYC documents each time and getting the same verified every time when the customer creates a new relationship with a financial entity.

Who can get access to CKYC?

The Central KYC application can be accessed by authorized institutions or other notified institutions under the Prevention of Money Laundering Act, 2002 (PMLA) or rules framed by the Government of India (GOI) or any Regulator (RBI, SEBI or IRDA).

Features of CKYC registry

1. Acts as a unique KYC identifier linked with independent ID proofs.
2. Ensures that the data and documents are stored in a digitally secured electronic format.
3. Helps in reducing Substantial cost by avoiding multiplicity of registration and data upkeep.
4. Provides secure and advanced user authentication mechanisms for system access.
5. ID authentication with issuing authorities like Aadhar/PAN etc.
6. Holds regulatory reports to monitor compliance.

Who needs to comply?

The KYC compliance is mandatory for all individuals and citizens under the Prevention of Money Laundering Act, 2002 (PMLA) inclusive of the rules framed thereunder, read along with the SEBI Master Circular guidelines on Anti Money Laundering (AML) and circular on Combating the Financing of Terrorism (CFT) and duties and obligations of Securities Market Intermediaries.

As of now, all investors who wish to make a lump sum investment of fifty thousand (Rs. 50,000) or more have to be KYC Compliant first. Such compliance will also apply to the other mode of investment that is Systematic Investment Plan (SIP) concerned with Mutual Funds which implies that each installment of value greater than or equal to Rs.50, 000 would have to be KYC Compliant.

The following is the list of personnel who need to be KYC compliant before initiating any transaction with the financial institution:

Joint Holders

It may include all active members of the account to be individually KYC compliant before they can invest together in any Mutual Fund. Therefore, all holders need to be KYC compliant and copies of each holder’s KYC Acknowledgement would be then attached to the investment application form

Minors

In case the investor in the picture is a minor or is a person who has not attained majority till date then, the Guardian of minor should be a KYC compliant personnel and should ensure attachment of their KYC Acknowledgement while investing in the name of the minor. However the minor in order to be able to transact further in his own capacity should apply for KYC compliance in his own capacity and intimate the concerned Mutual Fund(s) after attaining majority,

Power of Attorney (PoA) Holder

The KYC compliance is mandatory for both the issuer (i.e. Investor) and the holder (i.e. Attorney) of PoA. Both have to ensure that they are KYC compliant in their independent capacity and must attach their respective KYC Acknowledgements while investing.

Financiers

The financiers who are concerned with providing financial support to the ones in need shall also ensure that they are KYC compliant at the time of Lien Marking.

In case of death of the unit holder

In case of any unforeseen circumstances where the unitholder who is also the sole applicant cease to exist, then the claimant should submit his KYC Acknowledgement along with the other relevant documents to effect the transmission in his favor and get all the remaining.

How do customers benefit?

The following are some of the benefits the CKYC customers shall be entitled to:

It will help in eliminating the repetitive process of KYC registration, again and again, saving financial advisor and financial product manufacturer from completing the KYC process in one go.

It will save them a huge amount of time filling up multiple KYC forms and provide countless self-attested documents.

It will help in convincing clients to invest in a mutual fund, security scheme or a fixed deposit as the action required would be simpler due to the reduction of a barrier.

Customers would also get access to their personal records on CKYC registry and can ask to make updates to their existing records if necessary.

Aadhar Judgement’s say on KYC

The recent Aadhar ruling held that there is no need to link the 12 digits biometric code to with mobile numbers and bank accounts. In this, the Supreme Court struck down Section 57 of the Aadhaar Act that which provided that private companies could ask consumers for Aadhaar details for identification purposes. It is further ruled that the telecom service providers will have to delink the aadhar verification code from mobile numbers so those who had linked their mobile number with Aadhaar may have to provide another identity proof. The ruling also had an impact on the new small finance banks that used Aadhaar to complete the mandatory KYC process for new customers in a quick and cost-efficient way. This is now a time consuming and cost bearing process for both the sectors as well as the consumers. Which initially took 30 minutes, could now take more than a week for completion of the KYC norms.

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

The post What Are CKYC Norms, Who Needs To Comply, How Does It Work And How Do Customers Benefit? appeared first on iPleaders.