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How to lodge a complaint to your municipality on water-logging

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In this article, Simran Sabharwal discusses how to lodge a complaint in cases of water logging in your locality.

Introduction

“Heavy rains wreaked havoc in the city as commuters faced hard time through waterlogged roads and faced traffic congestion.”

“PWD and civic bodies trade blame as Delhi seems set to go down a watery path again this monsoon; L-G likely to chair a meeting on the issue today.”

These are the headlines we read in the national daily during monsoons. But what happens after a road gets waterlogged. Who takes care of the waterlogged road? Also, what if the road next to your home gets waterlogged during a rainy season?

This article discusses the procedure of filing a complaint on water-logging of roads.

What is Water-logging?

Water-logging occurs when there is heavy rainfall and due to improper drainage system, the water gets collected on the road and causes problems. It can also be said that when the soil cannot absorb more water, it causes an increase in the underground water level. As a result, it leads to roads getting waterlogged.

Dealing with water-logging

Waterlogging is a serious problem. Apart from the inconveniences that it causes, it also brings miseries along. During the rainy season, a lot of water-borne disease spreads. These diseases lead to epidemics and unfortunately proves fatal to humans.

To tackle the water-logging problem, various cities have their own Public Health Engineering Department (PHED) or the Municipality, where one can lodge a complaint. They have the authority to look at the conditions of the roads and maintain public hygiene and sanitation. Recently, Odisha has been hit by Cyclone Titli which will increase the groundwater level and eventually cause water-logging on the roads. At these times, it is advisable to stay at homes and not to leave your place unless it is necessary. Also, one needs to lodge a complaint to the concerned authority so that the condition is minimised.   

Step by Step procedure to file a water-logging complaint

Step 1

For lodging a complaint, one can either visit the municipality office and write an application and submit it. People living in villages can go to Panchayat office and submit the application.

But nowadays, the form can be filled online. One can go to the Public Health Engineering Department website or the Citizen’s Corner on the municipality’s page and submit the complaint.

Step 2

If you are writing an application and submitting it, follow this method.

  • Follow a proper format for writing an application. Begin with your personal details (Add your details wisely, and do not write highly private details) followed by the details of the authority you are submitting your letter to.
  • After writing your details, switch to the main problem. Write about the situation you are facing and specifically mention the location where the road has been waterlogged. Be courteous throughout the letter.
  • Mention the complaint number, if you have written the complaint before and it has not been answered.
  • Keep a copy of the complaint letter with you for further records.
  • If your complaint letter is not answered, try writing to higher authorities.

A sample complaint letter has been attached below. (Annexure 1)

Most people these days prefer lodging a complaint online as it is convenient and easy.

Here are the details to file water-logging complaints online in your city.

CITY NAME

MUNICIPALITY ADDRESS

WEBSITE

CONTACT NO.

DELHI

PWD DELHI,

Govt. of NCT of Delhi

12th Floor, MSO Building

I.P. Estate, New Delhi.

Delhi Municipality Website

09718779915

MUMBAI

Municipal Corporation of Greater Mumbai

2nd Floor, Annex Building,

Mahapalika Marg, C.S.T. Mumbai 400001

Mumbai Municipality Website

+912222694725

CHENNAI

Ward-8, 1st Main Rd, Sidco Nagar, Villivakkam, Chennai, Tamil Nadu 600049

Chennai Municipality Website

04424500923

KOLKATA

The Kolkata Municipal

Corporation

5, S.N. Banerjee Road, Kolkata

Kolkata Municipality Website

22861234

JAIPUR

Pandit Dindayal Uppadyay Bhawan, Lal Kothi Tonk Road, Jaipur, Rajasthan.

Jaipur Municipality Website

+911412741424

HYDERABAD

2nd Floor, Municipal Complex, Main Road, Lower Tank Bund, Hyderabad.

Hyderabad Municipality Website

04021111111

ASSAM

Directorate of Municipal Administration,

Assam, Dispur, Guwahati-781006.

Assam Municipality Website

03732322111

HARYANA

Gobind Nagar, Pehowa, Haryana 136128

Haryana Municipality Website

1800-180-1817

BHOPAL

Harshwardhan complex, Mata Mandir, Bhopal

Bhopal Municipality Website

07552701222

RAIPUR

Nagar Nigam Head Office, Near Mahila Police Thana, Gandhi Udyan, Raipur.

Raipur Municipality Website

07712535780

Step 3

This is how a usual website of the PHED department looks like. Here, you can fill in your details as directed.

  • One may need to provide his contact number, email id and address details with correct ZIP code when filing a complaint.
  • For some cities, one may require to enter the OTP received on the entered mobile number first and then proceed with the complaint. List of information required may vary with the municipality’s website.
  • Then, enter the complaint type and fill in your details. One also has an option to upload an image.
  • Submit the complaint and note down the complaint number received.
  • One can also check the complaint status and know when it will be addressed. Also, noting down the complaint number will help in future references.

Can one file a complaint through calls?

  • The government of certain states has even provided the citizens with the application which are available on Play store and WhatsApp numbers to lodge their complaints. The new methods introduced by the government are available 24*7 which prove to be convenient for the people.
  • According to Delhi PWD, one can send the water-logging complaints along with pictures through the WhatsApp number – 8130188222. One can also download the app available on play store.
  • It is possible to file a complaint through calls and authorities have no right to deny it.

Water-logging can also lead to various epidemics. Therefore, it is advisable to safeguard oneself. Also, one needs to file the complaint on time so that the authorities start working on it.


Annexure 1 (Sample complaint letter)

To

The Municipal commissioner,

_______________<name of the corporation>,

_______________ <City with pin code>.

Subject: Water-logged roads.

Respected Sir,

I am <name>, living in <address> at < city and state name>.

The condition of the roads at <detailed address> is pathetic. The sanitation condition is very bad here. The roads are waterlogged since <number of days>. The drainage water flows all over the street, <mention other problems>.

So, I request you to register the complaint and improve the condition of our locality.

Thanking you in anticipation.

Yours faithfully,

<your name>

<city>

<contact number>

<signature>


The post How to lodge a complaint to your municipality on water-logging appeared first on iPleaders.


Planning to Invest in The US Real Estate Sector – These are the 7 Tips You Need to Know

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The real estate industry has traditionally been known as a wise investment that can lead to huge amounts of returns. Big names such as Warren Buffet, Rockefeller, and even Trump have amassed their huge fortune partly due to their real estate endeavors. But before you jump head first and pour all your savings buying real estate, be warned that there are pitfalls that need to be avoided to find success in the industry. Like everything else in life, finding success in real estate requires hard work, too. Here are 7 tips to heed before investing in real estate.

  1. Location Matters

Different cities have different unique sets of buyers and sellers when it comes to real estate investment. It is important that you understand an area’s market before you start buying properties left and right. Investing in a market you are knowledgeable about is a wise decision for any beginners. This way, you will rely on your experience instead of hearsay or rumors. Your knowledge about your hometown will prove useful when you start to acquire real estate. It also pays to track the changes a city undergoes. Some cities have consistently shown growth in property value while others have seen a reversal.

  1. Research, Research, and More Research

If, however, you find yourself limited to a few investment choices you have no clue about, this is where a good amount of market research helps. In real estate, good metrics to keep track of are the construction and vacancy rate of an area. Usually, when prices rise, construction rate increases because it is profitable. But if vacancy rate increases this means the houses are not selling and prices are likely to drop. These are just two of the numerous metrics to look out for before investing.

  1. Know How Much Things Cost

A great real estate investor can look at a property, factor in the number of repairs that need to be done and determine its value. All properties have to have an added value to it to turn a profit and knowing how much things like construction materials, repairs, and cleanup will prevent you from getting overcharged by vendors.

  1. Watch Out for Emerging Neighborhoods

Rental properties are a great way to dip your feet in real estate. Buyers who buy properties in up and coming neighborhoods can capitalize on its tax incentives and growth potential. These are good locations to ensure that investors turn a profit in their investments. Emerging neighborhoods are generally accessible and convenient, usually close in proximity to public transportation. These areas are also adjacent to popular neighborhoods. Properties in these areas don’t stay on the market for too long.

  1. Keep Your Wits Intact

One common problem beginning investors have is jumping too quickly on the first investment scheme that comes their way, or over analyzing a move to the point that they fail to make any decision. Some of these newbies attend one seminar or read an article online and think they know everything there is about real estate investment. The rest do the opposite. They spend hours and hours doing research and attending several talks and seminars but fail to apply it in any significant way because they are too scared to make a mistake.

  1. Diversify

The best place to start investing in real estate is in your backyard. To some extent, this is true. But extending your reach to other cities and states could offer a nice pay off down the line. Having a large pool of properties in different locations will make your investments more resistant to the constant fluctuations of the local market. Properties out of state are also usually more affordable, especially in smaller cities. Some states also offer lower property tax making the properties there more profitable.

  1. Be Patient

A lot of beginning investors are jumping into real estate in the hopes of becoming overnight millionaires, but that’s rarely the case. It takes time to buy and sell a property, not to mention the numerous costs it entails like repairs, renovations, and taxes. Because the property is a necessary commodity, a good investor will know that their investments will only grow over time through compounding. You use the profit from the sale of one property to acquire new property, and so on. This process takes time and only the truly persistent and patient reaps the rewards.

Author Bio: Kerry Brooks is a passionate blogger who loves to write about home designs, home renovation ideas and home improvement. She is currently working for 123closedhouse.com, which offers easy solution for distressed property owners who are facing personal or financial hardship, to sell their home fast.   

The post Planning to Invest in The US Real Estate Sector – These are the 7 Tips You Need to Know appeared first on iPleaders.

You will find opportunities in most unlikely places, when you are not ready

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This article is written by Ramanuj Mukherjee, CEO, iPleaders.

I met my karate guru in Delhi metro in 2013. It was wee hours of the morning. We were travelling to Rishikesh and was on our way to catch a bus. We had not slept and had worked all night before we could take that holiday. I and my co-founders were intermittently singing. Yes, startups do that to you. Life is hard, but there is no shortage of joy, excitement or happiness even when you can take a short break.

So I was singing a Bengali song. Yes, in Delhi metro! I faintly remember that perhaps I was a slightly drunk too. Luckily the train was mostly empty, except for a few early morning commuters.

Unlike the rest of Delhi, inside the metro people are very nice. They don’t spit. They don’t argue. Nobody minded me singing though I am not exactly the kind of singer you would want to hear voluntarily.

However, a short, balding, stocky man walked up to me and started chatting. I initially thought he is pissed because I am singing. Soon I realised he is a Bengali too and is very happy to hear a Bengali song in Delhi metro. He said he teaches karate. I was interested in learning. We exchanged numbers.  

One day I had organized a Bengali lunch at my place. I invited him too, after all, he was one the few Bengalis I knew in Delhi.

One thing led to another, and soon I was learning Kyokushin Karate and MMA. I had really less time in my life as I spent all my hours trying to bootstrap iPleaders. I just couldn’t find time to fit in karate classes. So I had to change my lifestyle, and I started waking up early in the morning to attend these classes.

I didn’t have time to practice at home, so I hung a punching bag in the office itself. When I would be frustrated after some failed misadventures at work, I will channel that frustration into a practice session with the punching bag.

I had to make a lot of changes in my life for karate. I did.

I even convinced half my office to get into karate. It helps when you are not the lone wolf, but have a supportive environment.

I had some natural flair for combat and fighting. I made quick progress. Most other students would be afraid to do a full contact sparring with me. About a year and a half down the line, I was even selected to represent Delhi in a national Kyokushin competition.

Most importantly, my lifelong wish of learning martial arts at an advanced level was fulfilled. It made me strong. My body structure changed over a period of one year. So did my fitness, stamina, confidence, and I learnt some deadly moves too. I know several ways of knocking you out in under 30 seconds if I need to. For example, a downwards spiralling hook to the thirteenth rib. That’s a favourite. Or a thigh kick on the knee with my shin that will ensure you don’t stand up for the next 15 minutes.

Recently, I found myself at the receiving end of a road rage incident in Goa. I was riding a scooter when my vehicle apparently splashed some rainwater from the road onto some people sitting on the side of the road. They chased down my bike for a kilometre and confronted me about it. I explained to them that is next to impossible to go on the road without splashing water during monsoon and I certainly didn’t do it intentionally. If it has happened I am sorry. But these people had no intention of letting it go. It seemed they wanted a fight.

I parked my bike right in the middle of the road, blocking incoming traffic. Then got off my bike and looked at the very aggressive guy eye to eye. I was not afraid at all. I may have been even smiling. I asked him, you want to fight with me over such a small thing? The guy shouted a bit but didn’t dare hit me as I maintained strong eye contact. Looking into my eyes, he probably realised I wouldn’t be an easy target.

It would have been probably very different if I was angry, or agitated, or scared.

As the number of people waiting and screaming at us increased (I had blocked the road), the guy then walked off, still cursing. I smiled and continued on my way. I remembered the first time I found myself in a similar situation when I was 14 years old. I was slapped multiple times, humiliated for no fault of my own, and went home crying.

Those days are long gone.

I could stand up to this bully fearlessly because I was not afraid of a physical fight. I knew exactly what to do if I got into a fight, thanks to a lot of preparation, and it made all the difference.

I always wanted to learn martial arts as a kid. My parents thought that it’s a terrible idea. I will get injured or turn out to be a mafia man or something. What kind of people learn to fight? That was their thought process.

I tried learning karate in college. Most teachers were mediocre. I found various styles of karate more ornamental and little useful. Many martial arts styles are more like dancing – aesthetic, but not very useful in a real fight. And then, one day I met the Delhi head of Kyokushin Karate, a form that almost all professional fighters have to learn, in Delhi metro. Who knew that would lead to a 2-year long training? That was the most unlikely way to find the karate teacher I was looking for all my life!

Opportunities come randomly. When you are least prepared for it. When you don’t expect.

Do you say yes when opportunity knocks? When opportunity lightly brushes past you, do you jump up and grab it by its tail?

Too many times we wait for the perfect day. Perfect research. Perfect timing. The perfect coach. We wait for somebody to show up and tell us what to do. We wait for someone else to give us permission to do what we want to do.

There is no such thing as a perfect opportunity. And you need to give yourself permission. If you want to do something, go for it. Jump at it. Don’t let the half chance you see slide by. Convert it into a once in a lifetime experience.

You will always find opportunities in the most unlikely places when you are not at all ready. Still, don’t let it go.

That’s what differentiates the could-have-beens from already-done-thats.

Do you want to learn either contract drafting, or merger and acquisitions, investment law or about corporate finance transactions? We have two courses coming up by end of this month. If you are sitting on the fence, waiting for the perfect time, perfect opportunity, don’t. Yesterday was the best day to already start learning. Today is the next best day.

That’s why we give you instant access to the course material as soon as you pay the course fee. So that you can start learning and get a headstart, although live coaching and exercises will start from 1st of November.

Learn about the things you fancy learning about. You will never find out who you could have been otherwise.

Here are the details of our upcoming courses:

Courses commencing from 1st November, 2018:

Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions)

Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution

Executive Certificate Course in Arbitration: Strategy, Procedure and Drafting

Executive Certificate Course in Insolvency and Bankruptcy Code

Courses commencing from 15th November, 2018

Executive Certificate Course in Companies Act

Executive Certificate Course in Real Estate Laws

Diploma in Companies Act, Corporate Governance and SEBI Regulations

Diploma in Industrial and Labour Laws

 

The post You will find opportunities in most unlikely places, when you are not ready appeared first on iPleaders.

The Criminal Law (Amendment) Act, 2018

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In this article, Saumya Sinha discusses the recent The Criminal Law Amendment Act, 2018.

The Indian Penal Code, 1860 governs the substantive part and the Code of Criminal Procedure, 1973 along with the Indian Evidence Act, 1872 governs the procedural part of the criminal law of the country. These Acts have been amended several times to keep pace with the changing needs of society. One major amendment in these laws was the Criminal Law (Amendment) Act, 2013. This is also commonly known as the ‘Nirbhaya Act’ and it amended the provisions relating to sexual offences. These amendments were the consequence of the brutal rape and consequent death of a 23-year old woman in a bus in Delhi and were based on the recommendations of Justice J.S. Verma Committee Report.

Criminal Law Amendment Act, 2018

The Criminal Law Amendment Act, 2018 is also a consequence of such barbaric incidents which shook the conscience of the entire nation. The demand for making anti-rape laws more stringent had started developing due to various child rape incidents. The infamous Kathua rape case and the Unnao rape case triggered this demand and this gave birth to the amendment of 2018.

Brief facts of Kathua rape case and Unnao rape case

An 8-year-old girl was raped in Kathua, a district of Jammu and Kashmir. It has been alleged that she was kept in a Shrine for several days and raped continuously and later murdered.

The Unnao rape case was another shock to the nation where a teenage girl accused an MLA of raping her in the year 2017. She tried to set herself on fire in front of the MLA’s residence in Unnao, northern Uttar Pradesh.

Timeline of events which led to the amendment

Several state assemblies such as Madhya Pradesh, Haryana, Rajasthan, and Arunachal Pradesh passed stringent anti-rape laws for committing rape of minor girls after the Kathua rape and the Unnao rape incidents.

  • Following this, the President had promulgated the Criminal Law Amendment Ordinance on 21 April 2018.
  • The Criminal Law (Amendment) Bill was then tabled in the Parliament which replaced the Ordinance.
  • The Bill was passed by the Parliament on 6th August 2018.
  • The President gave assent to the Bill and thus, the Criminal Law (Amendment) Act, 2018 came into force.

What lead to enactment of Criminal Law Amendment Act, 2018

This followed the Criminal Law (Amendment) Ordinance, 2018 and brought amendments in four major Acts.

  • The Indian Penal Code, 1860
  • The Code of Criminal Procedure, 1973
  • The Protection of Children from Sexual Offences Act, 2012
  • The Evidence Act, 1872

The Indian Penal Code, 1860

Before the amendment, Section 376 dealt with punishment for the rape of women in two circumstances.

  • Section 376(1) dealt with punishment for rape of a woman in all the circumstances except those mentioned in Section 376(2). The punishment in such cases was rigorous imprisonment of a minimum seven years which may be extended to imprisonment for life. The punishment under this section has now been amended.
  • Section 376(2) dealt with punishment for the rape of a woman done by police officers, public servants, member of the armed forces, etc. This punishment has not been amended and is a minimum ten years rigorous imprisonment which may be extended to imprisonment for life.

After the amendment, Section 376 deals with three categories of punishment for rape, apart from rape of women by police officers, public servants, member of the armed forces, etc.

  • Punishment for the rape of a woman to be a minimum ten years rigorous imprisonment which may extend to imprisonment for life. {Section 376(1)}. Thus, the quantum of punishment has increased from a minimum of seven years to a minimum of ten years.
  • Punishment for rape on a woman under sixteen years of age has been added by the amendment. Punishment in such cases has to be rigorous imprisonment of a minimum twenty years which may extend to life imprisonment. {Section 376 (3}
  • Punishment for rape on a woman under twelve years of age has also been added by the amendment. The punishment in such cases is defined as a minimum twenty years rigorous imprisonment which may extend to imprisonment for life. The offender in such cases can also be punished with death penalty. {Section 376AB}

Thus, for the first time, death penalty has been introduced for the offence of rape considering the gravity of the offence.

  • Moreover, Section 376DA and 376DB have been added by the amendment which deals with punishment for gang rape on a woman under sixteen years and twelve years respectively. The punishment in such cases has to be invariably imprisonment of life. However, for gang rape on a woman under twelve years of age death penalty can also be awarded.
  • Clause (i) of Section 376(2) has been omitted.

The Code of Criminal Procedure, 1973

There have been simultaneous amendments in the Cr.P.C to meet the ends of justice in such cases of rape.

  • If a person is accused of rape on a woman of under sixteen years of age, he shall not be granted anticipatory bail under Section 438 by a High Court or a Court of Session.
  • The amendment has provided for speedy trial and investigation.
    • The investigation has to be mandatorily completed within two months.
    • The appeal in rape cases has to be disposed within six months.
  • Moreover, the amendment has also made two changes in Section 439 of the Code.
    • A proviso has been inserted which states that the High Court or the Session Court has to give notice to the public prosecutor within 15 days of which it receives the bail application of an accused of raping a girl under 16 years of age.
    • A sub-section has been inserted which makes the presence of informant or a person authorized by him mandatory during the hearing of bail application of the accused in such cases.

The Protection of Children from Sexual Offences Act, 2012

  • Section 42 of the Act which deals with alternative punishment has been amended to include Sections 376AB, 376DA, and 376DB.

The Evidence Act, 1872

  • Section 53A and Section 146 have been amended to make the provision of the Act to be in consonance with the amendments in other Acts.

Various views on the Amendment

The debate on Death Penalty

The amendment in Criminal Law with respect to the introduction of the death penalty triggered the debate whether such punishment addresses the issue at hand.

  1. The death penalty will act as a deterrent

The supporters of the punishment of death for committing rape on a woman under twelve years of age argue that the punishment is apt for such a heinous crime and it will act as a deterrent. One of such supporters is retired Justice P.D. Kode of the Bombay High Court who said that such offence is a “dastardly act” and is inflicted on minors who are actually incapable of protecting themselves and therefore, the punishment of death penalty is not harsh.[1] Another opinion is that a person committing rape on a girl whose body has not even matured is an evil and devious act and thus, to be punished by death penalty is the best answer.

However, there are many activists and lawyers who argued against such punishment on various grounds. The argument that the death penalty will act as a deterrent is dismissed as a futile exercise as stringent punishments in a very few cases have led to a decrease in the rate of commission of crimes. Such arguments have been mostly based on two points.

  • The 2013 amendment of Criminal Law was targeted towards the same objective i.e. to make the laws stringent so as to create deterrent in the minds of the perpetrators. However, records show that the stringent laws have not helped much in bringing down the rate of crime. Moreover, there was a strong demand after the Nirbhaya incident too that death penalty should be included as a punishment for rape but Justice Verma Committee recommended against it stating that “there is a strong submission that the seeking of the death penalty would be a regressive step in the field of sentencing and reformation.”[2] A similar view was also reiterated by the Law Commission of India in its 262nd report.
  • Another ground is that the death penalty is also a punishment in case of an offence of murder. However, this has not stopped the crime and in fact, the crime rate is on increase. The offender is not in the state of mind to analyze the punishment before committing the crime and thus, the death penalty is not an effective deterrent.
  1. The death penalty will lead to under-reporting of cases

This is one of the arguments given by people opposing the death penalty. National Crime Records Bureau (NCRB) data shows that rapes in India are mostly committed by a person known to the victims or relatives of the victims. Out of 38,947 reported rape cases in 2016, 36,859 cases were such in which the victims knew the offenders.[3] As a consequence, there is massive underreporting of rape cases and with death penalty as a punishment, this will only intensify. This is because “we are effectively asking the child’s family to risk sending a family member or a known person to the gallows.”[4]

  1. Introducing the death penalty has increased the chances of the offender killing the victim

This is another view against the punishment of the death penalty. The punishment for murder under Section 302, IPC is death penalty or imprisonment for life. Thus, effectively the punishment for committing rape on a minor girl and committing murder has become same. Therefore, now the chances are high that the offender will make sure that the victim does not survive. This point was also raised by the Delhi High Court when a Bench comprising of Acting Chief Justice Gita Mittal and Justice C. Hari Shankar remarked “Have you thought of the consequence to the victim? How many offenders would allow their victims to survive now that rape and murder have the same punishment?”[5] Thus, this might result to be of fatal consequence for the victims.

The shift in focus

One of the major arguments against the amendment is that this is a step to pacify the public and a step away from addressing the real problem. The real and persisting problem lies in the criminal justice system of the country.

  1. The focus should be on taking steps to increase the conviction rate. In 2016, a total of 38,947 cases of rape were reported in the country. Of these, the Courts completed trial in 18,552 rape cases. However, with a conviction rate of 25.5%, the accused in 13,813 cases were acquitted. Similar statistics can be seen in cases of child rape. Out of 6,626 cases of which trial was completed, 4,757 resulted in the acquittal which means a conviction rate of 28.2%.[6] Thus, the need of the hour is to focus on addressing these issues.
  2. Another issue which requires greater attention is providing protection to the victim as well as the witness. Because of lack of any such system, more often than not the victim, witness or the family members face threats and intimidation. There is a need to create a conducive environment for the victim to report the crime and provide protection to the victim as well as the witness. Thus, there are more intricate issues to deal with and until these are resolved it is difficult to control the rate of such crimes.

The Amendment makes the difference of Section 376(1) and 376(2) ineffective

Section 376 (1), IPC deals with the punishment for the offence of rape in general, i.e. for all the cases except for those provided in Section 376(2). The latter section deals with the punishment for rape if the offence is committed by a specific person or the offence is committed in specific circumstances. There are several categories mentioned in the section such as a police officer, a public servant, a member of the armed forces, a person in a position of trust or authority, etc. Before the amendment, the minimum punishment under Section 376 (1) was seven years imprisonment and in Section 376(2) was ten years imprisonment. This difference was created as the crime becomes more heinous if committed by persons who are held high in the eyes of the public due to their position or if committed in specific circumstances. However, after the amendment, the minimum punishment in both the sub-sections is ten years of imprisonment and thus, there remains no difference.

The difference in the punishment for rape of minor boys and minor girls

The Protection of Children from Sexual Offences Act, 2012 was enacted because the sexual offences were dealt under IPC for all the victims and a need was felt that the children who are victims of sexual violence need special protection and care and hence, a separate legislation. This is a gender neutral legislation as it defines a ‘child’ as the one who is under the age of 18 years. The maximum punishment under this Act is imprisonment for life and the maximum punishment for a sexual offence under IPC for minor girls has become death penalty. Thus, a difference has been created by the amendment of 2018 as punishment for rape on minor girls has become more stringent as compared to rape on minor boys.

The problem in case of no anticipatory bail

The amendment in Cr.P.C provides that no anticipatory bail shall be granted in cases of rape on a woman under sixteen years of age. Thus, now the accused has no provision to get an anticipatory bail even if there are chances of being booked under a false case.

What other states should learn from Madhya Pradesh on successfully implementing the Criminal Amendment Act of 2018

The Criminal Law (Amendment) Act, 2018 through the amendment of Code of Criminal Procedure, 1973 provides for speedy trial and investigation in rape cases. Having considered all the views in favour and against the amendment, it is also important to throw some light on the practical results of the amendment.

  • The state of Madhya Pradesh has shown a successful implementation of the provisions of the amendment. The state has completed the investigation of rape cases within the time frame i.e. within 60 days in 72% of the cases.
  • In a rape case in Bhopal, the arrest was done within 12 hours and the investigation was completed in 72 hours which also included recording the statement of 25 witnesses and the accused was awarded death penalty.
  • In another case, the trial for rape of a 4-year-old was completed in a day after four days probe.
  • These statistics clearly show that the provision laid down in the amendment is an achievable task and can lead to improvement of delivery of justice all over the country.
  • Even the Centre has applauded the government of Madhya Pradesh for the successful implementation of the amendment Act and has asked other states to follow the same.

Conclusion

The Criminal Law (Amendment) Act, 2018 has brought significant changes in the criminal law of the country. These amendments have the objective of making anti-rape laws more severe so as to decrease the rate of crime. The time frame of investigation and appeal, if implemented properly, can bring down the crime rate. However, these amendments need to be supplemented with other changes in the criminal justice system for overall effective results.

References

[1] Sonam Saigal, Activists, Lawyers split over death for minors’ rape, The Hindu (April 23, 2018, 12:24 AM), https://www.thehindu.com/news/cities/mumbai/activists-lawyers-split-over-death-for-minors-rape/article23639421.ece.

[2] Justice Verma Committee Report, at 245.

[3] Soibam Rocky Singh & Jaideep Deo Bhanj & Saurabh Trivedi, Better conviction rate not death penalty will deter sexual offenders, The Hindu (April 23, 2018, 12:00 AM), https://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/better-conviction-rate-not-death-penalty-will-deter-sexual-offenders/article23640863.ece.

[4] Anup Surendranath, Ineffective and arbitrary, The Hindu (March 13, 2018, 12:00 AM), https://www.thehindu.com/todays-paper/tp-opinion/ineffective-and-arbitrary/article23166394.ece.

[5] Staff Reporter, Was any study done before bringing out rape ordinance, The Hindu (April 24, 2018, 12:00 AM), https://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/was-any-study-done-before-bringing-out-rape-ordinance/article23652406.ece

[6] Soibam Rocky Singh & Jaideep Deo Bhanj & Saurabh Trivedi, Better conviction rate not death penalty will deter sexual offenders, The Hindu (April 23, 2018, 12:00 AM), https://www.thehindu.com/todays-paper/tp-national/tp-newdelhi/better-conviction-rate-not-death-penalty-will-deter-sexual-offenders/article23640863.ece.

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Doctrine of basic structure

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Doctrine of Basic Structure

On 16 oct 2015, Supreme Court quashed the National Judicial Appointment Commission (NJAC) and unpinned the 99th amendment act from the constitution’s board as it was diluting the independence of the judiciary and hence violating the doctrine of basic structure.

In India, parliament can amend any provision of the constitution and is vested with such power under Article 368 of the constitution itself but cannot disturb the basic structure of the constitution through amendment or any type of alteration.

Understanding doctrine of basic structure

Doctrine of basic structure is nowhere expressed or mentioned in the constitution of India so why are we limiting the powers of the parliament with a reason which is even not mentioned in the constitution? J. Khanna provided that the power in Article 368 of ‘amend’ is not of nature of arbitrary but limited.

Verbatim Article 368 -”Power of parliament to amend the constitution”, here the word ‘amend’ gives birth to the doctrine of basic structure. The word amend itself expresses that the parliament can amend the constitution but cannot change its ideals and philosophy or briefly say- the structure.

So the doctrine of basic structure says that

  1. the parliament’s unlimited power to amend the constitution is subject to only one restriction i.e it should not dilute or violate the basic structure of the constitution.
  2. Or the effects of the amendment should not be abrogating or disturbing in nature towards the basic structure.

Subject matter

The doctrine of basic structure though is not exactly defined but through its contents which have been provided by the judicature clarifies a scope defining the frame or the structure of the constitution. From time to time basic structure is enhanced with some new contents and hence the Supreme Court is yet to define the exact basic structure of the constitution.

  • Supremacy of the constitution
  • Rule of law
  • Sovereignty, liberty and republic nature of Indian polity.
  • Judicial review
  • Harmony and Balance between fundamental rights and directive principles.
  • Separation of power.
  • Federal character.
  • Parliamentary system.
  • Rule of equality.
  • Unity and integrity of the nation.
  • Free and fair elections.
  • Powers of SC under Article 32,136,142,147
  • Power of HC under Article 226 and 227.
  • Limited power of parliament to amend the constitution.
  • Welfare state.
  • Freedom and dignity of an individual.

Evolution of doctrine of basic structure

The developeent history of the doctrine of basic structure can be divided into four state –

First stage – Sankari Prasad judgement and ending with I.C. Golaknath judgement

Initially judiciary was of the view that the amendment power of the parliament is unrestrictable because it can amend any part of the constitution even also the article-368 which provides the power to amend to the parliament. But in 1967, Golak Nath V State of Punjab, the Supreme Court adopted a new vision to see the powers of parliament that it cannot amend the part III of the constitution i.e Fundamental rights and thus awarded fundamental rights a “Transcendental Position”

NOTE-The “basic features” principle was first expounded in 1953, by Justice J.R. Mudholkar in his dissent, in the case of Sajjan Singh v. State of Rajasthan.

He wrote, “It is also a matter for consideration whether making a change in a basic feature of the Constitution can be regarded merely as an amendment or would it be, in effect, rewriting a part of the Constitution; and if the latter, would it be within the purview of Article 368?”

The second stage (main stage) – Starting with Post Golakhnath Scenario and ending with Keshavananda case Judgment

In 1973, Keshavanada Bharti V State of Kerala gave birth to the landmark judgement which pronounced that the parliaments cannot alter or disturb the basic structure of the constitution. It was held that however the parliament has unfettered power to amend the constitution but it cannot disturb or emasculate the basic structure or fundamental features of the constitution as it only the power of amendment and not of re-writing constitution.

The Third stage – Starting with Post Keshavananda’s case and ending with Indira Gandhi’s case

Although the doctrine of basic structure was given in Keshavanand case but it got widespread acceptance and legitimacy due subsequent cases and judgments. The main evolution of this doctrine started at the emergency period imposed by then powerful PM Indira Gandhi. 39th amendment was passed by the government in order to suppress her prosecution which also extracted the elections of Prime Minister from the purview of judicial review. However, in the case of Indira Nehru Gandhi v. Raj Narain, the 39th amendment act was quashed down with the help of doctrine of basic structure.

The fourth stageJudgment like Minerva Mill’s case and Vaman Rao’s case

In the Minerva Mills case, the Supreme Court provided key clarifications on the interpretation of the basic structure doctrine.

Under the limited power of parliament to amend the constitution, two important factors were added-

  • To keep harmony and balance between the rights and directive principles.
  • Judicial review

Keshwanand Bharti’s case and the way it was pronounced.

An opposition is the core of conflict and that is what lead to the case. Six different petitions were filed by different petitioners seeking that whether the parliament’s amending power is limited especially when it comes to Fundamental rights or not.

Kesavananda Bharati Sripadagalvaru, the leader of a math in Kerala, challenged the Constitution (29th Amendment) Act, 1972, which placed the Kerala Land Reforms Act, 1963 and its amending Act into the IX Schedule of the Constitution.

Chief Justice S.M. Sikri headed the 13 judges bench, constituted for hearing the petitions in the case. The judgement was passed by a majority with 7/6 ratio concluding the statement that the basic structure of the constitution of India cannot be amended by the parliament. But was it as simply passed as it seems?

The case of Keshwanand Bharati created a “poisonous” atmosphere in the court-as alleged by an author. Also, a judge later spoke about the “unusual happenings” which brings the judgement in the question mark “was the decision pronounced in the case was judicial one? ”

“I got the impression [from the first day] that minds were closed and views were determined.”-Justice Jaganmohan Reddy through this record against his colleagues again puts a question mark on the nature of the judgement.

With such 5 months frictional environment the case was decided with 11 pronounced judgments by nine judges collectively contributing to approx. 1000 pages. Discussing in other form, this match was decided by the umpire Justice Khanna as there was a tie between the other judges- 6 were of the opinion that parliament’s amendment power is limited as the constitution itself contains inherent and distinct limitations, with 6 other who were of the opinion that parliament’s power with regards to amendment process is unlimited, but it was justice Khanna who suggested that parliament although can amend any provision of the constitution but as the power is to “amend” so it cannot violate or amend the basic structure of the constitution.

H.R. Khanna J.

  1. H.R Khanna in his judgement said that however, the parliament has full power to amend the constitution but here ‘the power to amend’ should not shrink or dilute the basic framework or the structure of the constitution. Other six judges also who favoured the limitation on power, contended that parliament cannot amend essential elements of the judgment as they are implied in the constitution.

According to Honourable Justice, parliament is empowered to amend and bring law with respect to the changing situation but it cannot touch or alter the boundaries of the constitution.

But how can the judgement of one unit lead to a majority name? Thereby hangs a tale not generally known. After the 11 judges were done with their judgement, CJ Sikri who was of the opinion that parliament’s amendment power is inherently limited and also with implied limitations, immediately passed a paper named “View of the majority” for the assent of the thirteen judges. However, the paper was the conclusion of Justice Khanna’s judgment i.e Basic structure of the constitution cannot be amended” but only 9 judges signed the paper and so other were not called for the press conference expressing the majority view.

This is the brief struggling story of “Doctrine of Basic Structure”.

Important judgments of Supreme Court regarding Basic Structure

  • Shankari Prasad V Union of India
  • Golak Nath V State of Punjab
  • Keshavanand Bharti V State of Kerala
  • Indira Gandhi V Raj Narayan
  • Minerva Mills V Union of India
  • Kihoto Hollohan Vs. Zachillhu
  • Indira Sawhney Vs. Union of India
  • S.R Bommai vs Union of India
Parliament can amend any part of the constitution.

Parliament can not amend Part III of the constitution i.e. Fundamental Rights.

Parliament can not amend or dilute the basic structure of the constitution.

Parliament can not amend the basic structure of the constitution.

Judicial review and harmony& balance between fundamental rights and directive principles were added to the basic feature.

‘Free and fair’ elections was added to the basic feature.

Rule of law was added to the basic feature.

Federal structure, unity and integrity of India, secularism, socialism, social justice and judicial review were reiterated as basic features

Conclusion

Subsequently, we find that basic structure as an idea has developed over years since its origin in the 1970s, with each passing year there has been to an ever increasing extent right being incorporated into the basic structure of the Constitution. Basic structure as we see today is consequently a finish of long periods of legal supervision of Rights and related constitutional structure. Through the ‘rights chain’ we have substantiated that basic structure is a summit of judicial decision to pick the simple best in the rights buffet and secure them despite seemingly insurmountable opposition. In this way, an essential structure is the distillate of centre natural rights, human rights and Fundamental Directly under the Indian situation. Be that as it may, as we have seen the judiciary never gave a solid test to discover what basic structure is leaving the definition so dubious that legal have abundant moving space. Be that as it may, from dubious words like constitutional identity’, ‘basic value of constitution’, we have discovered that dependent on the rights chain fundamental structure would be restricted to natural rights and to those zones of lawful structure that straightforwardly influences those.

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Why do deal lawyers earn so much?

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This article is written by Ramanuj Mukherjee, CEO, iPleaders.

Many law students and litigators ask me how much a corporate lawyer can earn, especially if they practice independently or start a new law firm. I think the pricing of SHA is one of the most fascinating subjects that will give you a good glimpse into the earning potential of corporate lawyers.

In law firms, in more than one practice areas, what the majority of the partners do for a vast majority of their time is SHA related work. This is something that contributes a lot to the revenues of law firms, possibly more than a non-corporate lawyer would imagine. M&A, Private Equity and Venture Capital work largely include drafting SHA or SSPA (Share Subscription and Purchase Agreements) apart from due diligence and a bit of deal compliance.

Outsiders think that there must be a price range. Insiders know that the answer is much more complex.

In course of doing research on this article, I spoke to around 6 lawyers, including law firm partners, individual practitioners, founders of boutique law firms that specialize in investment deals and young lawyers who frequently work with startups at considerably low rates. The range I got was Rs. 30,000 to Rs. 40,00,000. Pricing varies wildly, not only from one service provider to another service provider but also from one deal to another.

At the bottom of the food chain, there are individual lawyers who would work on a small deal. They may draft an SHA for INR 30,000, usually for an early stage investment in a startup. I never heard of a smaller number, and finding someone who will competently draft and negotiate an SHA at that rate is quite hard. You have to find a very young lawyer to do it at that rate. A more likely number would be something above Rs. 60,000. However, it seems there is significant undercutting and competition going on at this level, and prices fluctuate a lot.

In recent times, the market has been flooded by lawyers looking for this kind of work, as since advent of startup economy in India, a lot of lawyers who earlier worked for big law firms and handled big deals, moved into the startup market to build an independent practice. With a wider supply base, the price has significantly come down.

The boutique law firms that are known for investment law work will easily charge much more. Some of them will aim for 1% of the deal value as the fee, which means they will get 1 lakh for per crore of investment. This is on the higher side though. Some of them refuse to negotiate on price because reducing price to get a client can send long-lasting wrong signals to the market.

Boutique law firms tend to get high quality, specialized work, the partners are known for their specialization, and often command better hourly rates than some of the bigger law firms, especially compared to junior partners at these big law firms.

Such boutique law firms will easily charge 3-4 lakhs for a 10 crore investment or acquisition. It is rare to be able to charge over 5 lakhs for a transaction for these firms though unless combined with very extensive due diligence.

Of course, with the complexity of deals, prices also increase. If there are several groups of investors involved, that increases the number of negotiation points, markups, the volume of paperwork, and the number of moving parts to track in a deal. Therefore, the price goes up significantly. Usually, such late-stage investment deals involving many investors are handled by more mature firms with more experienced hands on deck.

Next comes the full-service law firms, with M&A, PE, VC specific teams and partners who are responsible for growing these practice areas. These law firms, especially if not tier 1 firms, tend to be aggressive in matters of pricing, offers very cheap rates especially to bag long-term clients, as they tend to have many mouths to feedback at the firm where they are trying to grow the team and reputation.

Earlier, big deals where hundreds of millions of dollars are being invested or huge corporations are being acquired used to exclusively go to the 7-8 big law firms. Things have since changed. The newer law firms, often referred to as 2nd or 3rd tier law firms have really dented the market by offering much cheaper prices and comparable service levels. Also, the big companies and their in-house legal teams have come to appreciate that these newer crop of law firms are much cheaper but not necessarily any lesser in service quality than the much more expensive ones.

Big law firms are able to charge up to 30-40 lakhs in some large deals for negotiating the SHA or SSPA. However, 8-10 lakhs are more realistic targets for them as well. In many of these matters, a fixed fee has become the norm though law firms prefer an hourly billing model.

Why is it so expensive to get an SHA drafted or negotiated?

The jurisprudence around SHA is not really settled. There are a whole lot of standard clauses in a typical SHA, such as tag along, drag along, reverse vesting, Right of First Refusal etc, which are yet to be tested in the court of law. It is dangerous territory for even in-house counsels, and they are not ready to put their neck on the line on how these will be decided in the future. It is much safer to hand off the responsibility to outside counsels who do this work day in and day out.

Also, SHA or SSPA are complex documents, often running into hundreds of pages. This kind of work is quite rare in most companies. The exclusive knowledge and experience needed to do this work, therefore, develops only in law firms that handle M&A and investment related work. If a new lawyer who did litigation all his life jump in to do an investment deal, he will be quite out of depth and there will be a huge learning curve.

Also, those with a better understanding of venture capital, PE and even specific technology industries and insider knowledge of these enterprises tend to do much better in negotiations.

Most other contracts over time tend to become standardized. For example, IP assignment agreements. There was a time when these sort of agreements were unusual in India, and very few lawyers had the skill set to draft or negotiate them. Law firms used to charge a premium to draft assignment agreements. However, over time enough lawyers and law firms worked on it, and now it is a staple agreement, and every company with IP and a legal team probably has several templates which they reuse every time there is an assignment of IP.

This never happened with M&A or investments. The agreement you sign when there is a majority shareholder investing additional money, and the agreement you sign when there is an investor with 5% buying another 10%, will look completely different. Situations are complex and differ every time. Every company has a unique set of opportunities and risks. Every fund has a different objective than another. Investors have a different stomach for risk and every founder has different priorities and unique ways to negotiate. Highly customized solutions become necessary in these circumstances. And this inability to standardize the documentation around deals is perhaps the biggest reason for drafting and negotiating SHA is one the best paid legal work.

This is why big companies and funds started by outsourcing this kind of work to law firms, and it became the norm over time. Some big companies have begun to hire their own in-house M&A lawyers now, especially when they plan on many acquisitions or strategic investments in years to come, but it is still the exception rather than a trend.

What does the future hold?

If you want to be an M&A lawyer or investment lawyer, you must learn to draft and negotiate SHAs. Which is why we dedicate a significant portion of our diploma course on M&A, Investment and institutional finance law course to teaching you how to draft and negotiate SHAs. You don’t just read some study materials or watch some videos, but have to work extensively on exercises that deal with realistic scenarios you will face when you begin to do this sort of work.

And yes, this is an area of work which holds a lot of promise in the future. Investment in the Indian economy is not about the slow down, nor will consolidation through M&A. And this is the sort of legal work that will always be the domain of experts than generalists, so by specializing in M&A you are likely to do very well in the long term.

Just make sure you are well prepared with knowledge, basics and concepts when you show up for that interview. Let us know if we can help you with that.

Our next batch of M&A course is starting from 1st of November. The last date for enrollment is 30th October.If you have read so far, you definitely have some interest in the subject, so don’t miss the opportunity to join this batch. There are only 20 seats, and we take students on first come first served basis.

 

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All things are indeed created twice

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This article is written by Komal Shah, Team iPleaders.

I hated Mills and Boons. For those who aren’t aware, Mills & Boons were the love stories in vogue a long time before the Twilight brigade came along. But that doesn’t mean I didn’t have fantasies. Except these would have me as the heroine all along. I didn’t dream of knights in shining armour rescuing me, I would dream of kicking some corrupt goons in their behind. Or if there ever was a hero, his role was to be dragging me out of the office close to midnight to have a romantic stroll on the beach. Seeing as this write up was initiated at about 11.34 PM and then halted in the middle, I am living the dream.

Speaking of dreams, a sage saying goes – ‘All things are created twice – first in the mind, and then, in reality.’ Trust me, it’s true. While going through one training, I was introduced to a scientific technique called ‘relaxation’ coupled with ‘visualisation’. You can read about it here. It relates to bringing your subconscious mind to a level where it accepts suggestions and then using visualisation to make it work precisely in the direction you want it to work.

I picked up the technique quickly because I absolutely didn’t mind daydreaming. On one occasion, I recall that I put the daydream in detail, down on paper and submitted it as a write up for the journal of the Ahmedabad Chapter of the Institute of Company Secretaries of India. To my astonishment, it was published. Not only that, a senior professional probably found the imagery to be splendid, and wrote back to the chapter stating he was impressed with my vision. I got fan mail for my daydream!!

Sportspersons use this technique thoroughly. They see themselves damaging the other team the day before the matches. They see all the details – they see how they negotiated a difficult situation and still managed to bowl that unimaginable yorker to dislodge the stumps. They see how they kicked the football from miles away and brought it within the goal post. They see how they hit the final punch to knock out the opponent. You’ve got to dream it, in every single detail, feel it and sense it and believe in it. When you do this, your mind picks up the suggestions. It’s incredible how magically you will see situations turning to your advantage – it’s like there is an angel in the sky, listening to whatever you are telling yourself.  

Why not use this for your career? You wanna be Harvey Specter, see yourself as one, striped suits and cocky lines included. You wanna be one hell of an M&A lawyer, see yourself working on the deals. Your mind will automatically bring you to acquiring the right skills and make you do things towards being that. You wanna be negotiating contract clauses with the opposing counsels and ‘one-upping’ them every time? See this happen. Feel it. Feel it in your bones, how you won the negotiation for your client. The suggestions you give your mind do turn into reality. When? This depends on how detailed your vision is, and how fast you act on what your mind asks you to. Time is precious. Don’t waste it.

Click here for free materials on contract drafting!contract drafting

Can you visualise yourself closing M&A deals, or learning how to draft over 100 commercial contracts in next one year, arguing bankruptcy cases in NCLT or becoming a hotshot arbitration lawyer flying international to represent your clients in Dubai or Hong Kong?

If yes, please check out our upcoming courses here:

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Skills for being a successful a civil litigator in 2018

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This article is written by Abhyuday Agarwal, COO, iPleaders.

Yesterday, senior person who is an advocate on record in my LinkedIn network shared something very insightful. He shared the lament of a trial litigator that there is nothing left for litigators to practice in civil courts.

He remarked that 30 years ago, civil courts used to entertain all types civil suits under Section 9 of CPC.

However, the civil litigation landscape has undergone a sea change since then. Now, service matters have gone to tribunals (service law), consumer cases have gone to consumer courts, family cases have been moved to family courts and cases where the government is a party are no more filed in Civil Courts, but instead as writs in High Court under Article 226. Litigation in other areas such as specific performance, land title, etc. has reduced as procedures of registration have become very clear.

Based on these trends, some trial court lawyers believe that prospects of a civil court lawyer have become very dim. However, the person in my network saw a silver lining and explained that new types of cases around torts and cases for damages can still be filed in civil courts.

This is a huge insight, but it opened up a new question for me –  how can someone build a reputation and a career as a civil litigator in today’s age? What are the subjects he or she must acquire expertise in?

From time to time, the economy and the legal system will undergo these shifts, and not just lawyers, but people in any other profession will have to improvise and adapt in their careers.

Those who don’t improvise, those who practice today based on the beliefs of the past, will struggle to survive.

What are the emerging areas in civil litigation today?

Today’s civil litigator is not working on family law matters, property disputes or enforcement of wills, but is working on a wide variety of matters before diverse forums (not necessarily in civil courts):

1. Arbitration

Most civil litigation matters today arise from commercial disputes. The foundational understanding for commercial disputes is available in the contracts that were entered into by the parties. Most commercial contracts include an ad hoc or an institutional arbitration clause. Depending on the outcome your client needs, the work of a commercial litigator can involve:

    1. Drafting necessary documents to frame the dispute and initiate arbitration
    2. Get interim relief from court (this is something you actually argue in civil courts for, and not in any tribunal)
    3. File petitions in court for appointment of arbitrators and commencement of proceedings before the tribunal  
    4. If it is an institutional arbitration, then initiating arbitration by invoking necessary procedures of the arbitral institution   
    5. Oppose applications for referral of the dispute to arbitration, or for interim relief or file various challenges against appointment of arbitrators (if that is your client’s goal)
    6. Representing the client through different stages of the arbitration before the arbitral tribunal
    7. File necessary challenges to awards which are not in your client’s favour

Necessary skills to do the above will require you to understand civil procedure and functioning of civil courts, arbitration and contract law.  Those of you who are interested in learning practical aspects about arbitration will find them here.

2. IBC Litigation

The Insolvency and Bankruptcy Code, 2016 completely overhauled the insolvency framework in the country.

The money recovery landscape has been completely altered – any creditor to whom you owe a debt of more than INR 1 lakh which is overdue has the ability to commence insolvency proceedings against you. Many organizations are using this as a powerful tool to recover their dues.

Once IBC proceedings are accepted by NCLT, the responsibility of the management ceases and vests in the resolution professional. For this reason, many companies are now scared of receiving IBC notices and have started paying up.

IBC notices can also be used maliciously by unscrupulous vendors to extort money from  unsuspecting entities. If an entity which has unpaid dues fails to raise a dispute right at the first step when it receives notice of an unusually high claim, it will find it difficult later to avoid insolvency proceedings.

As a lawyer, you could be involved in one or more of the following roles:

  • Support an organization or a consultant in recovering unpaid dues
  • Act for a financial institution who intends to commence insolvency resolution against a debtor
  • Act for a financial institution or creditor who is preparing a resolution plan for the debtor
  • Support a debtor in processing claims, which includes disputing bogus or unscrupulous claims
  • Participate in arriving at a consensus about the terms of the restructuring of the corporate debtor

Each of these roles involves you to send multiple notices and communications, draft and file legal documents with NCLT and participate in negotiations with multiple parties.  

Those of you who are interested in learning more about how the Insolvency and Bankruptcy Code works and upskilling yourself in this area will find this course, anchored by an ex-Trilegal Associate, useful.   

3. SARFAESI and DRT work

SMEs and large companies take various kinds of business loans for their expansion. Many of these loans are taken on the backing of the security of the company’s property and assets. The value of the security may be sufficient to or exceed the amount of the loan. In such cases when there is a default, the lender banks do not need to proceed under insolvency – they directly take possession and sell secured assets. For this, specific procedures are to be followed under the SARFAESI Act and Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

As a lawyer, you may be involved in acting on the part of the lender and lead the proceedings against the defaulter, or you could be engaged by the defaulting organization to protect its interest.

4. Company law matters at NCLT

Many litigious aspects under the Companies Act are now handled by the National Company Law Tribunal, which has benches in around 10 locations across India. Thus, if you are to deal with share transfer disputes, oppression and mismanagement claims regarding how the company is being administered, creditor’s objections against reduction of share capital or approve schemes of arrangements or mergers, developing expertise in Companies Act and corresponding litigation around it is necessary. This is highly specialized work and very different from ordinary trial litigation under Code of Civil Procedure, 1908.  

To learn more about this, try out the Diploma in Companies Act, Corporate Governance and SEBI Regulations or the Executive Certificate Course in Companies Act. These are all courses with live classes and a bunch of exercises containing simulations from real world work.

No matter what you are working on, you will need to apply a combination of skill-sets. For example, a shareholder dispute may have an NCLT angle and an SHA which specifies an arbitration clause may go to arbitration. If there is a government shareholder involved you may even be able to invoke writ jurisdiction of a court in certain situations.   

5. Regulatory Litigation

Depending on the sector in which the company is operating, there may be a lot of other regulatory work for companies. For example, a fintech company may receive a show cause notice from the RBI. Almost any company will receive a tax notice over the course of its lifetime. From time to time, a competition law scrutiny will be required for M&As and joint ventures, especially for a company which is a market leader in its space. Litigators are ideally suited to make representations and handle any proceedings before regulators.  

Being a successful civil litigator today requires a very different set of skills today from what was required even ten years back.

What’s your plan for acquiring these skill-sets? Which skill sets will you acquire next and how?

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Where do you see yourself in the next five years?

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What is your goal in life? Where do you see yourself in the next five years?

These seemingly HR interview questions, are quite important if we want to get anywhere in life, apparently.

Most of my life I have been a planner. Once I knew what I wanted, I used to focus all my energy towards it. Being headstrong and adamant helped, to a certain extent. But life has been unpredictable.

For instance, I went to law school in order to become a criminal litigation lawyer. But soon upon graduation, the hard reality sinked in that I am not cut out for the job at hand. I had a ten year plan going into law school. But once that plan did not work out, I was out of ideas.

What do I do next?  What should be my next goal? Where do I see myself for the next five years? Do I want to go into a law firm or work with a company? What training do I need, in order to pursue my next goal?

All these questions haunted me for a long time. When I quit my first job, I was a rookie who had given a year of her time to the job, only to realise that she does not see herself  doing that for the foreseeable future.

I know of many people who are doing their jobs just because it pays the bills. There are those who are working for the causes they truly believe in. But more often than not, one’s job is simply for paying the bills. It is tempting to go after the money. It is crucial after all.  But can you really excel at something that you do not have passion for, but do only for the money?

I should know, I mostly picked up jobs as they paid the bills. But where does one’s ambitions go, if all you are after is a good paycheck? Do you compromise on the aspirations and goals? Do you modify them to suit the present scenario? Do you let go of the aspirations completely?

When I quit my last job, I had already been working there for close to four years. I could do the work with my eyes closed. The designation sounded good, it was a large company and the job was safe. I was coordinating with different internal teams and external lawyers alike for different assignments and was running point on several projects. I was simultaneously working on self improvement and on my long lost hobby of writing.

But then one day, I took stock of my situation. I have been working for five years at that point since graduating. I remembered the HR asking me, a long time ago, where do I see myself in the next five years. I was not where I wanted to be. I had not had a promotion in over a year and half. My role had not expanded as I’d hoped. So I went around asking what I needed to do in order to get where I expected myself to be.

Some said I needed to acquire more skill set like contract drafting and negotiation. Some said I needed to know how to network better. Others suggested, I should probably change industries and get onto something with more growth opportunities and headroom for disruption. Perhaps an industry that is slated to grow dramatically over the next decade? Confused with so many suggestions, luckily, I got an opportunity to learn marketing, and I took it.

Looking back, if someone had said I’d be doing marketing even a year ago, I would dismiss the notion with utter disbelief. That is the beauty of taking risks. You not only get to learn more about something new, you also learn to test your limits.

I met a bunch of people in the past few months, who were more or less doing the same thing as I was – trying to find out their project for the next five years or so.

There was one young woman, who has been trying hard to get a suitable job. She had tried her hand at multiple jobs in less than three years and had excelled in all of them. But you know when you know that you don’t belong somewhere and it is just not the right fit? She had that feeling for a longest time. She worked at a mediation startup, then went on to work at a supreme court AoR firm, and then again a legal startup. She tried to do her best in every role she had. Last I heard she was about to join a big law firm. She seems to have finally found her true calling there. Or maybe not. Only time can tell. However, she is definitely searching for it! She is definitely like to find the right fit more than many others I know.

Then there was a man I’d met, in his early 50’s. He had served in the Indian Navy and then gone to work in US for almost a decade or more. He had come back to India in search of his next project, which will make sense for the next five years or more. He was an eternal learner. He learned to play a variety of musical instruments, learnt about cyber law and cryptocurrencies and more in the few months that I’d known him. Last I heard, he was appointed the Chief Innovation Officer of a US startup working with cryptocurrency. He had found his next project!

People who take risks, learn new skills, force themselves to face challenges that they do not know how to scale but learn on the fly – they grow. And wonderful things happen to them.

The point I am trying to make here is simple. We all go through our lives trying to make a living. Sometimes we are able to pursue our dreams, sometimes, we are not. Life is too short for living  with disappointments and regrets. The goals and dreams may change with time and circumstances. But we must take a pause every now and then, to stop and see where we are going. And try new things. Shake up stuff. Add new ingredients in the mix. Do the unpredictable.

Are you doing what you want to do? Did you once dream about working with the big law firm? Did you fail at realising that dream? Where do you see yourself in the next five years? Are you on the right path towards said goal? Are you doing the things that will ensure you reach your goals? Are you having fun doing what you are doing? Does your job excite you? Do you look forward to taking on the challenges at work?

If the answer to any of the above questions was a maybe or a no, then you need to stop and take a hard look at yourself and your goals. You need to find where you want to be and how to get there. You might need to improve your skill set

For instance, I want to learn how to draft different kinds of contracts like commercial contracts, technology contracts, IP contracts and more. So I will need to hone my skill in this area before landing my dream job. I have taken up a contract drafting course for a thorough learning of the subject matter. To get more exposure in the industry and display my expertise, I might write well researched articles.

If you are interested in working for a law firm dealing with merger and acquisitions, in the next five years, you need to get into the industry. For getting into the industry, you need to know all there is about merger and acquisition, investment deals, due diligence, deal compliances, institutional finance and more. You may need to do a practical online course on the mergers and acquisitions, write articles, network in the industry in order to break into it.

The idea is not to just keep doing aimless things which do not contribute to your skills or career or the future you seek. You do not want to resent the job at hand because that affects your mindset and performance. Don’t waste your future or life. You only get one.

There is a famous saying which goes on something like this- If you don’t like where you are, then move. You are not a tree.

Take a pause from whatever you are doing studies or your job, and take a hard look at your career. Are you where you wanted to be five years ago? Are you gradually moving towards where you want to be in the next five years? Are you on the correct path?

If not, then stop. Change courses. Take a reverse turn. Go where you want to go. Don’t second guess yourself. There is no reason why you won’t achieve your goals if you put hard work and effort towards it.

If you feel like you are stuck in your legal career and have no way of changing course, think again. It is never too late to improve and change the trajectory of your career. You could do online courses to pursue a career in your chosen field of law.

We at LawSikho understand that your career goals cannot be met with the traditional legal education system. It lacks the practical training that we dearly need on the job. So unless you have interned well from the beginning and mapped out your entire career before joining law school, and got things right throughout, there is a slim chance that you will land your dream job. Even if you did everything right, why not prepare yourself for the job so you land on your feet, learning the exact tasks you have to do when you get that job?

Therefore, to that end we have designed online law courses in the subjects which are practically necessary for the industry, like cyber laws, business laws, media laws, mergers and acquisitions, companies laws, labour laws, real estate, criminal law, and more!

You can learn more about it here.

These courses are not only theoretical, but have practical applications which you learn to put to use through intensive exercises and assignments. You get regular feedback and guidance while pursuing the course. You get job and internship assistance too.

So do not wait to see where life takes you. Check for yourself, if you are going in the right direction or not. If you are not, then no need to lament. Just take the right step and change the course of your career!

Good luck!

 

The post Where do you see yourself in the next five years? appeared first on iPleaders.

LawSikho’s Insolvency & Bankruptcy Law Course; Applications Open

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As per a news report, the National Company Law Tribunal (NCLT) has sanctioned 45 resolution plans under the Insolvency and Bankruptcy Code (IBC). In addition, the NCLT has ordered for the liquidation of 19 companies which were initiated in December, 2016.

As of November 2017, over 4,300 applications under the corporate insolvency resolution process (CIRP) were filed in the various benches of NCLT, according to the Financial Stability Report (FSR) released by the RBI in March 2018. The Insolvency and Bankruptcy Code has been a huge step. It has changed the economic maths in India. It is expected to make the Indian economy efficient, and keep creditors in check.

A simple money recovery suit takes a lot of a time in a civil court. But IBC changed the game. If your claim is over one lakh, you now have the option to take any company to NCLT for insolvency for failing to make payment on due date. The cost is cut down for recovery as it only takes weeks to recover the said claim, instead of prolonged years as in a civil suit.

So all in all, IBC has changed the face of the game. The Insolvency and Bankruptcy Code came into existence with the enactment of the Insolvency and Bankruptcy Code (IBC) in May 2016,  when it replaced the Company Law Board process.

The RBI had asked the banks to refer the 12 largest dead accounts totalling  2.5 trillion, i.e., about 25 percent of gross NPA of the banking system. Of them 11 are due before NCLT.

Who is impacted the most by IBC?

Has it brought in change of career opportunities for the professionals like lawyers, accountants, bankers?

With this in mind, we at LawSikho have launched Executive Certificate Programme in Insolvency and Bankruptcy Code. This course helps you learn the basics and practical aspects of the insolvency and bankruptcy code. You learn how to draft the notices, applications, petitions along with procedural aspects of IBC.

Click here to know more about IBC course!

What is the career potential for lawyers after doing this course?

The best time to be an expert is something is when the law is in the nascent stages. With most people unaware or ill-informed of the changed laws, legal experts in IBC are sought after by the banks, financial institutions, NBFCs, real estate, insurance, etc. They need litigation lawyers and strategists who are well-equipped with IBC.

Law firms are also looking into IBC as a separate practice area and are hiring people with IBC expertise in their teams. This is an area where only a few can claim expertise since it is in its nascent stages. So you don’t need to showcase a long career graph in this are of law, just sound practical and theoretical knowledge of the domain!

You may want to start reading the IBC, but you need more than mere provisions of the statute to stand apart from the crowd. You’ll need to know the regulatory developments, judicial pronouncements, commercial insights in order to successfully resolve insolvency disputes. Most importantly you need to understand the commercial aspects of the legal process, so that corporations and banks want to hire you!

What is unique about this course?

Generally when we start learning, especially in online courses people start and end with reading the study materials. This course is not about learning the provisions of the statute and case laws.

This course is intensive and not just theoretical, it has hands on practical lessons, where your drafting skills are honed. You learn what lawyers and professionals do practically on a regular basis.

You need to spend 4-6 hours per week on this course. This course will provide you feedback, coaching from trainer to help you improve the work you produce. You will be writing an article per month under expert guidance which will publish on iPleaders blog or other publications. You will get a free course on professional networking, CV writing and interview skills so that you can easily find jobs.

Students who perform well in class get recommendation to top law firms for jobs and internships.

This course enable you to  perform insolvency working with ease and deal with the insolvency aspects of corporate transactions in banking, finance, law firms, corporate litigation etc.

Who should take this course:

Lawyers working in bankruptcy practice, debt heavy sectors like manufacturing, real estate, e-commerce, technology companies need to take up this course.

Lawyers working in banks, NBFCs in recovery roles and those looking to work with law firms in commercial litigation, corporate litigation practice may take up this course.

Law students interested in working with the corporate litigation, commercial litigation and sectors like banking, manufacturing, real estate , e-commerce, technology, etc.

Training methodology

You get access to the study material through the digital learning management system, available on Android and iOS applications.The hard copy of the study materials is couriered to your address. You get live video sessions held after regular work hours along with 2 practical weekly exercises followed by written feedback. You get to ask questions, clear your doubts in the live session or the online forums. You get to learn conveniently on the go!

What will you learn?

You will learn how to handle entire process from serving a notice of default till the approval or rejection of a resolution plan by NCLT. You will learn how to strategize the commercial aspects of IBC and develop strategic thinking. You will learn how to draft various memos, notices, applications, petitions, etc.

Here is a glimpse of what topics will be taught under the course:

MODULE I- OVERVIEW OF INSOLVENCY LAWS IN INDIA

  • Why was the Insolvency and Bankruptcy Code (IBC) introduced?
  • Bird’s eye view of the IBC for a novice

MODULE II- INITIATION OF INSOLVENCY AS A FINANCIAL CREDITOR

  • Initiation of insolvency by financial creditors
  • How to draft an application to initiate insolvency (by financial creditor)

MODULE III- INITIATION OF INSOLVENCY AS AN OPERATIONAL CREDITOR

  • Initiation of insolvency by operational creditors
  • How to draft a demand notice and application to initiate insolvency by operational creditors

MODULE IV- INITIATION OF INSOLVENCY BY CORPORATE DEBTOR

  • Initiation of insolvency by corporate debtor itself
  • How to draft an application to initiate insolvency by a corporate debtor?

MODULE V- AFTERMATH OF FILING AN APPLICATION FOR INITIATION OF INSOLVENCY

  • Role of National Company Law Tribunals in Insolvency Cases
  • Consequences of admission of an application to initiate insolvency

MODULE VI- CONSTITUTION OF COMMITTEE OF CREDITORS AND FILING OF CLAIMS

  • Constitution of Committee of Creditors (COC)
  • How to file claims with the COC

MODULE VII- ADMISSION/REJECTION OF A CLAIM

  • How are claims admitted or rejected by the Insolvency Resolution Professional (IRP)

MODULE VIII- MEETINGS OF COC AND THEIR DUTIES

  • How does the COC work and decide matters?

MODULE IX- ROLE AND DUTIES OF THE RP

  • What are the roles and duties of the Resolution Professional?

MODULE X- INVITING PROSPECTIVE RESOLUTION APPLICANTS

  • How to invite resolution plans from prospective resolution applicants

MODULE XI- APPROVAL/REJECTION OF RESOLUTION PLAN BY COC

  • Approval or rejection of resolution plan

MODULE XII- APPROVAL/REJECTION OF RESOLUTION PLAN BY NCLT

  • Proceedings and NCLT
  • Appeals and Revisions from various orders during the insolvency process

Sample Exercises

We inculcate the habit of practical learning in our students through assignments, articles and exercises. Here is a taste of the exercises that we give to our students:

  1. Decide a suitable forum and advise lenders for recovery of specific debts through a memo
  2. Draft a notice of default to a debtor as well as guarantor
  3. Draft an application on behalf of a financial creditor to initiate insolvency of a company
  4. Draft a demand notice under the IBC
  5. Draft an application under section 10 of the Code

Course Details:

Last Date of Enrollment: 31st October, 2018
Batch Commencement Date: 1st November, 2018
Duration: 3 months
Course: INR 10,000/- (including GST)
To enroll for this course, click here.

Contact Details:

For any of queries, please email us at support@lawsikho.com or schedule a career counselling session by calling 011-39595032.

Learn on the go! Get immediate access on the Web, Android, and iOS on enrolment.

 

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Sebi PIT Regulation on Leakage of UPSI through WhatsApp

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In this article, Ambika Jhawar discusses Sebi PIT Regulation on Leakage of UPSI through WhatsApp.

Introduction

Insider trading means trading of securities of a public listed company, by an individual or an entity, who has access to unpublished sensitive information (“UPSI”) of the company. There are two kinds of offences related to Insider trading, that is communication offence and trading offence. In India, only trading offence[1] is recognized as an offence and therefore attracts the provision of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”). The law on prohibition of Insider Trading in India has been replaced by new set of regulations, to provide a better legal framework for investigating and curbing the practice of Insider Trading[2].

In this article, I will analyze whether the present PIT Regulations are capable enough to deal with the problem of leakage of UPSI through social networking application WhatsApp. This article is divided into two parts. Part I will talk about the recent cases on insider trading, which involved communication of UPSI through WhatsApp and the approach taken by Securities and Exchange Board of India (“SEBI”). Part II will talk about the recommendations given by Shri T.K. Viswanathan committee on Fair Market conduct, which can solve the problem of leakage of UPSI through WhatsApp. Lastly, I conclude this paper by stating my opinion on the recommendations and its utility in solving the issue at hand.

PART I

Leakage of UPSI through WhatsApp

In 2017, Reuters documented 12 cases of prescient messages about Indian companies being posted on WhatsApp groups[3]. After this report, SEBI has made efforts to deal with this issue, which has become relevant due to the rise of new technology. Recently, SEBI initiated preliminary examination in the matter of circulation of UPSI through WhatsApp groups. It was observed with respect to companies like Tata Motors Limited[4], Bata India Limited,[5] and HDFC Bank limited[6] that the messages, which were circulated on WhatsApp group matched the quarterly financial results of the companies. The messages about the financial results were circulated prior to the official announcement made by the companies. In my opinion, the disclosure of this information violates the rule of parity of information and perpetuates information asymmetry. The same could not have been possible without communication of UPSI by any person, who was privy to the information prior to the official announcement. The problem faced by SEBI in these cases was that the source of the leakage of UPSI could not be identified.

In this context, SEBI stated that leakage of unpublished quarterly financial result is prohibited and is in contravention of regulation 3(1) and (2) of PIT Regulations read with section 12A(e) of the SEBI Act, which prohibits procurement or communication of UPSI[7]. SEBI gave the following directions to the companies: Companies shall strengthen its processes/systems/controls to ensure that in future UPSI is not leaked; companies shall submit a report on how are they planning to strengthen the present control systems; companies shall conduct an internal inquiry into the leakage of UPSI and take actions against those responsible for the same; and the inquiry shall be completed within period of 3 months from the date of this order and within 7 days from the completion of the report, the company shall submit the report to SEBI[8]. It can be inferred from these cases that communication of UPSI, even though not an offence in India, is taken seriously by SEBI. The report given by Shri T.K. Viswanathan committee (“Report”) proposed some amendments to the PIT Regulations to deal with the issue at hand.

Click here

PART II

Recommendations in the Report

Some of the recommendations given can be useful in dealing with the problem of leakage of UPSI through WhatsApp. Firstly, the Committee has recommended that the PIT Regulations can be amended to include two separate Codes of Conduct, which prescribes minimum standards for (1) Listed companies and (2) Market Intermediaries and other Persons who are required to handle UPSI[9]. In my opinion, this recommendation can be helpful as it will put an obligation on market intermediaries like auditors, accountancy firms, law firms and consultancy firms to follow certain standards and a proper control system, while handling UPSI during the course of their ordinary business as well as while discharging its legal obligations. Secondly, it is recommended that a new regulation should be added to the PIT Regulations that Listed companies/ market intermediary may sign confidential or non-disclosure agreements with a third party, who is in possession of UPSI. The agreements should clearly state their responsibilities, while handling UPSI. If it is not practical to sign confidentiality agreements, then a notice may be given to the person receiving UPSI, stating the necessary safeguards while dealing with the information.[10]

Thirdly, the Committee recommends that SEBI should seek power to intercept telephone calls and electronic communication, to collect strong evidence against repetitive offenders in cases of insider trading[11]. In my opinion, this power will violate the right to privacy which is being recognized as a fundamental right by the supreme court. Also, sharing the data of users is against the privacy policy of WhatsApp. Another key issue with this kind of power is, that if WhatsApp shares data with SEBI, it will set a precedent and other government agencies would also file for similar cases. Therefore, SEBI should not have the power to intercept telephone calls and electronic communications. Fourthly, the committee suggests that Whistleblower Mechanism is an important tool to obtain information on market abuse such as insider trading. This kind of mechanism can increase the incidents of voluntary disclosure by persons, who are involved in unlawful dealings[12]. I would like to compare this mechanism with the Voluntary Disclosure of Income Scheme. It would give an opportunity to the defaulters to disclose their undisclosed income at the prevailing tax rates. This scheme has been successful for collecting revenues and it also ensures that the laws relating to economic offences would not be applicable for those defaulters. As per the present law, “the Central Government may, on recommendation by the Board, grant immunity to any person from prosecution for any offence under this Act, or the rules or the regulations made thereunder or also from the imposition of any penalty under this Act with respect to the alleged violation” [13].

The committee also suggested that the section may be amended to give power to SEBI to grant complete immunity or impose lesser penalty along the lines of a similar provision in Section 46 of the Competition Act, 2002 and the associated leniency regulations. In my opinion, the central government should lay down some guidelines and standards, which needs to be followed before using this mechanism.

The benefit of giving SEBI the power to grant immunity can be that political influence and pressure will not be a determining factor in the decision. Lastly, the committee recommended Inter-regulatory cooperation. SEBI may sign a Memorandum of Understanding amongst the various regulatory bodies and enforcement agencies like Income Tax Authorities, Reserve Bank of India, Ministry of Corporate affairs etc. for information-sharing and joint investigation in certain cases, to enable speedy and effective investigation of economic offences[14]. In my opinion, this is a good recommendation as it will also create a deterrent effect and compliance rate will be higher.

Conclusion

In my opinion, some amendments to the PIT Regulations are necessary to deal with the new concerns, which have arisen in the field of economic offences like Insider trading. Inferring from the language of Regulation 3 of the PIT Regulations, recent orders by SEBI and the recommendations, I believe that communication and procurement of UPSI shall also be recognized as an offence to deal with the issue at hand. Even though SEBI in recent cases has not imposed any penalty on the companies due to leakage of UPSI, but it has given directions to the companies to deal with the problem and the language of the directions use the word “shall”. Therefore, the jurisprudence on this point suggests that for better enforcement and compliance, communication and procurement of UPSI shall be declared as an offence under Indian law.

References

[1] Trading while being in possession of UPSI.

[2] SEBI (Prohibition of Insider Trading) Regulations, 2015 replaced the 1992 regulations.

[3] Reuters, “Exclusive: Prescient messages about Indian companies circulate in WhatsApp group” by Rafael Nam, dated 16th November 2017. https://in.reuters.com/article/india-whatsapp/exclusive-prescient-messages-about-indian-companies-circulate-in-whatsapp-groups-idINKBN1DG0IQ

[4] 2018 SCC OnLine SEBI 87.

[5] 2018 SCC OnLine SEBI 89.

[6] 2018 SCC OnLine SEBI 119.

[7] Ibid.

[8] Supra note 4,5,6.

[9] Pg. 51, REPORT OF COMMITTEE ON FAIR MARKET CONDUCT UNDER THE CHAIRMANSHIP OF Dr. T. K. VISWANATHAN (Ex-Secretary General, Lok Sabha and Ex -Law Secretary)

[10] Pg.56, ibid.

[11] Pg.62, ibid.

[12] Pg.63, ibid.

[13] Section 24 B, Securities and Exchange Board of India Act, 1992

[14] Supra note 11.

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What makes you burn with passion?

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Is there a burning desire, raging like fire, inside you?

There is a nicer way to say this. Are you really connected with your goal?

Most people say I want to be this, I want to be that. But what they really want the most is, no trouble. They want an easy life more than anything else. They want to be comfortable. They don’t want to risk what they already have – which is usually not much, except for comfort.

That’s not a goal. The people who stay comfortable do not achieve much. They cannot take a risk, so they do not get the rewards. They do not stand up and say, speak their mind, or do something new, something radical.

They do not care enough about their craft to labour at it for years and years, improving every single aspect of the work they do. They do not have the pull to keep focussing on their work when there are distractions abound. There is always some Netflix series, or the TV, or Facebook, which easily distracts them from their real work.

All of us are like that. We all have that lizard brain which cannot handle complex calculations and only think of fight or flight. That part of us would rather be safe, than chase greatness and risk the momentary comfort we are enjoying. Some of us learn to tame that part of us, and others never realise what the problem is.

What is your goal? What do you really, really want? Do you think about it when you go to sleep? Do you think about it when you wake up? Do you wake up in the middle of the night because you dream about it, and the intensity is so much that you can’t contain your excitement?

Of course, if you keep doing what others do, you will get the results they get. If you want something out of the ordinary, you have to take actions that others do not take.

Usually, that is risking your comfort. For that, you have to learn to defeat your lizard brain. For example, learning new things that are hard to learn. Or go out there and build a network that respects you, benefits from you and appreciates your contribution to them.

It requires you to give unquestionable value to others before you seek something for yourself. And you have to be unquestionably valuable for that. That requires practice, training, self-discipline, long-term effort, concentration, a supportive environment. But more than anything else, a burning hot desire to succeed.

How far will you go to achieve your goals? If you say whatever it takes, and is actually living that, then that’s what a burning desire looks like. That’s a goal that is going to be achieved, no matter how ambitious.

What is your major career goal going forward? Hit reply and share with me.

Do you think learning a bunch of new career skills will help you to move forward? Will increase the chance of you landing your dream job? Will it help to do your job 10% better? Will it increase the likelihood of you cracking your next interview? Will it lead to progress?

We definitely think of these questions all the time. My burning desire, that keeps me awake at night, and makes me wake up from sleep extremely excited at times (much to the chagrin of my wife), is to create a next generation legal education system that will change the face of lawyering.

I was just talking to my landlord yesterday. He has a lot of land in Goa, and many, many cousins. He has been litigating since last 10 years. Every single case he ever filed or defended was screwed up by one lawyer or the other. They have screwed up even simple matters like partition suits.

There are too many incompetent lawyers in India, with little skills but big egos, big ambitions but no idea as to how to convert opportunities into success. This is where we want to make an impact. I know it is going to change not only the practice of law but our country itself when we succeed, and it excites me to no ends.

We must go far beyond what the law schools are teaching. How can we train lawyers and law students in such a way that a law firm or a corporate legal department will be delighted to hire them? How can we train them to find their own clients, build lasting relationships with important clients and build a law practice?

All the courses we make and run are created with this objective in mind. Here is a schedule of upcoming courses in case you are interested in any of these things.

Courses commencing from 1st November, 2018:

Courses commencing from 15th November, 2018

In any case, work on developing that burning desire for something. That’s the easiest and only straight way to lasting success!

 

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Seat of Arbitration – Supreme Court in Hardy Exploration

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The atmosphere of arbitration is globally expanding. More and more commercial decisions are favoring arbitration as a preferred dispute resolution mechanism. Each day, new steps are taken by Courts as well as legislators to improve the viability of India as a preferred seat of arbitration. This is being done for varied reasons such as improving the international ease of doing business ranking of India and in turn resulting in improving foreign investment in India. Amidst all the fervor of making India a preferred seat, what implications essentially follow? The implications which follow are that the seat of an arbitration, brings with it, the implications of the courts which will have supervisory jurisdiction over the arbitration.

The Supreme Court of India has recently, on 25th of September, 2018 dealt with the question of the difference between the “seat”, the “place” and the “venue” of arbitration, in the case of Union of India v. Hardy Exploration and Production (India) INC, C.A. No. 4628 of 2018. This is a follow up post from an earlier short post.

ARBITRATION CLAUSE

In order to better understand the stipulations and the agreement between the parties regarding arbitration, it is important to understand the arbitration clause.

“32.1 This contract shall be governed and interpreted in accordance with the laws of India.

32.2Nothing in this contract shall entitle the contractor to exercise the rights, privileges and powers conferred upon it by this contract in a manner which will contravene the laws of India.

32.3

The English language shall be the language of this contract and shall be used in arbitral proceedings. All communications, hearing or visual materials or documents relating to this Contract shall be written or prepared in English.

33.1 The Parties shall use their best efforts to settle amicable all disputes, differences or claims arising out of or in connection with any of the terms and conditions of this Contract including the validity and existence hereof or concerning the interpretation or performance thereof.

33.2Matters which, by the terms of this Contract, the Parties have agreed to refer to a sole expert and any other matters which the Parties may agree to so refer shall be submitted to an independent and impartial person of international standing with relevant qualifications and experience appointed by agreement between the Parties. Any sole expert appointed shall be acting as an expert and not as an arbitrator and the decision of the sole expert on matters referred to him shall be final and binding on the Parties and not subject to arbitration.

If the Parties fail to agree on the sole expert, then the sole expert shall be appointed, upon request by one of the Parties, by the Secretary General of the Permanent Court of Arbitration at the Hague, from amongst persons who are not nationals of the countries of any of the countries of any of the Parties.

33.3Subject to the provisions herein, the Parties hereby agree that any unresolved dispute, difference or claim which cannot be settled amicably within a reasonable time may, except for those referred to in Article 33.2 be submitted to an arbitral tribunal for final decision as hereinafter provided.

33.4The arbitral tribunal shall consist of three arbitrators.

The Party or Parties instituting the arbitration shall appoint one arbitrator and the Party or Parties responding shall appoint another arbitrator and both parties shall so advise the other Party. The two arbitrators appointed by the parties shall appoint the third arbitrator.

33.5Any Party(ies) may, after appointing an arbitrator request the other Party(ies) in writing to appoint the second arbitrator. If such other Party(ies) fails to appoint an arbitrator within forty five (45) days of receipt of the written request to do so, such arbitrator may, at the request of the first Party(ies), be appointed by the Secretary General of Permanent Court of Arbitration at Hague, within forty five (45) days of receipt of such request, from amongst persons who are not nationals of the country of any of the parties to the arbitration proceedings.

33.6 If the two arbitrators appointed by the Parties fail to agree on the appointment of the third arbitrator within thirty (30) days of the appointment of the second arbitrator and if the Parties do not otherwise agree the Secretary General of Permanent Court of Arbitration at Hague may at the request of either Party and in consultation with both, appoint the third arbitrator who shall not be a national of the country of any Party.

33.7If any of the arbitrator fails or is unable to act, his successor shall be appointed in the manner set out in this Article as if he was the first appointment.

33.8The decision of the arbitral tribunal and in the case of difference among the arbitrators, the decision of the majority, shall be final and binding upon the Parties.

33.9Arbitration proceedings shall be conducted in accordance with the Suncitral Model Law on International Commercial Arbitration of 1985 except that in the event of any conflict between the rules and the provisions of this Article 33, the provisions of this Article 33 shall govern.

33.10Notwithstanding anything to the contrary contained in Article 30, the right to arbitrate disputes and claims under this Contract shall survive the termination of this Contract.

33.11Prior to submitting a dispute to arbitration, a Party may submit the matter for conciliation under the UNCITRAL conciliation, rules by a sole conciliator to be appointed by mutual agreement of the Parties. If the Parties fail to agree on a conciliator in accordance with the said rules, the matter may be submitted for arbitration. No arbitration proceedings shall be instituted while conciliation proceedings are pending.

33.12The venue of conciliation or arbitration proceedings pursuant to this Article unless the parties otherwise agree, shall be Kuala Lumpur and shall be conducted in English language. Insofar as practicable the parties shall continue to implement the terms of this contract notwithstanding the initiation of arbitration proceedings and any pending claim or dispute.

33.13The fees and expenses of a sole expert or conciliator appointed by the Parties shall be borne equally by the Contractor and the Government. Assessment of the costs of arbitration including incidental expenses and liability for the payment thereof be at the discretion of the authorities.”  

From a perusal of the above clause, a few important considerations emerge:-

  1. The substantive law of the contract is the law of India (Clauses 32.1 and 32.2)
  2. The procedural law of arbitration is the UNCITRAL Model Law.
  3. The venue of arbitration is Kuala Lumpur

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WHAT HAPPENED

To elaborate a little on the background of this case, the agreement between the parties was entered into in 1997. The agreement dealt with Hardy Exploration’s rights of the search for and potential extraction of hydrocarbons in India. The award was rendered in February, 2013 in favour of Hardy Exploration.

The entire arbitral proceedings took place at Kuala Lumpur and the award was also signed at Kuala Lumpur, as was contemplated in the Agreement. To the knowledge of the writer, never during the arbitration proceedings was there any dispute raised regarding the venue, seat or place of arbitration.

Cutting the long story short, the issue before the Supreme Court of India was whether Kuala Lumpur would be considered to seat of the Arbitration and in effect would that result in the Indian Courts lacking the jurisdiction to entertain a Section 34 Petition before the Delhi High Court.

WHAT LAW APPLIES

The major issues which are to be considered in order to appreciate the Court’s verdict is as follows:-

  1. The Agreement between the parties was entered into in 1997

  • The effect of this is that the Agreement between the parties would be governed by the Pre-BALCO law including the implied exclusion principle of Bhatia International. BALCO[1] laid down prospectively(from 06.09.2012), that in a foreign seated arbitration neither Section 9 nor any other provision of Part I would be applicable.
  • Prior to BALCO, the law laid was as laid down in BhatiaInternational[2]Bhatia International laid down, that the provisions of Part I would apply even to arbitrations held outside India, unless it was expressly or impliedly excluded by parties. It is pertinent to note, that Bhatia International still continues to govern the law as far as arbitration agreements pre-dating BALCO are concerned.
  • The jurisprudence of implied exclusion has been developing Bhatia International onwards, where various factors such as:-
  • Foreign law being the Proper law of the contract (Substantive law);
  • Foreign law being law governing the arbitration agreement;
  • A Foreign seat;
  • Absence of mention of other laws;
  • could lead to an implication of exclusion of Part I[3].

(Keep in mind, the 2015 amendment is nowhere in the picture)

2. UNCITRAL model law is the procedural law that applies.

Thus any matters of interpretation or ambiguity would have to be resolved by making a reference to UNCITRAL model laws.

WHAT THE COURT DECIDED 

Based on the implied exclusion jurisprudence which developed on the basis of Bhatia International and continued to develop even post BALCO with respect to pre-dated arbitration clauses, the court came to a conclusion that there were not enough factors to hold that Kuala Lumpur, Malaysia being the venue of arbitration was sufficient to impliedly exclude Indian Courts’ jurisdiction.

Another important factor, which is a novel concept developed in this case is the interpretation of the UNCITRAL Model law’s Article 20. Article 20 reads as follows:-

“Article 20. Place of arbitration – (1) The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case including the convenience of the parties. 

(2) Notwithstanding the provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation amount its members, for hearing witnesses, experts or the parties, or for inspection of goods, other property or documents.”

While interpreting the above clause, the Court held that while clause (1) of Article 20 dealt with a determination of the “seat”, clause (2) dealt with merely the venue of convenience.

The Court then held that while the award was signed in Kuala Lumpur and the place of signing the award was mentioned at Kuala Lumpur, it was not a “determination” of the seat of arbitration, but merely of the venue. It was on this basis that the Court determined that Kuala Lumpur was not the seat but only the venue and the jurisdiction of Indian Courts was not excluded, courtesy the Bhatia International jurisprudence of implied exclusion.

AUTHOR’S COMMENTS 

There are a lot of controversies and questions which this judgment raises. A few of them in very concise form are as below:-

Was a determination of the seat by the Court, really required?

As explained above, the implied exclusion jurisprudence clearly applies to this case. The determination of seat and place of arbitration occurs only if the BALCO law applies. To recapitulate, the BALCO judgment held, that once the seat of arbitration is outside India, Part I of the Arbitration & Conciliation Act, 1996 cannot apply. This is owing to the interpretation given to Section 2(2) of the Act. However, before BALCO, the law was in consonance with Bhatia International which clearly laid down that seat or no seat, it needed to be adjudged on surrounding circumstances and various facts, whether Part I was impliedly excluded.

The Court was simply required to look into different factors, such as substantive law being Indian, the requirement for rights to abide to Indian laws, and also the subject matter of the dispute to be in India. These factors could have been sufficient to apply the implied exclusion jurisprudence to adjudicate that Indian Courts would have jurisdiction.

What was the requirement of determining the seat of arbitration, as no purpose is served? 

Determination of seat, contrary to law followed in various jurisdictions

The Court has interpreted the UNCITRAL model law to come to the conclusion that the place where the award is signed cannot be interpreted to be the seat of arbitration.

However, the UNCITRAL model law is the basis of the arbitration laws in several jurisdictions and the Courts have held otherwise. Simply, a bare perusal of Article 30.3 of the UNCITRAL model itself clarifies that an award is to state its date and place and the award has to be deemed to be made at that place of arbitration mentioned in the award. (Indian courts, including the Supreme Court in this judgment interpret the place to mean the seat of arbitration). However, reading down this provision the Supreme Court held, that the ‘place’ mentioned in Article 30.3 has to be ‘determined’. Since it was not ‘determined’, and merely stated, the same would not amount to it being the place/seat of arbitration.

On the contrary, the English Court in the judgement of Hiscox v. Outhwaite[4], decided that an award was made at the place where it was signed, and this is how it would be determined whether New York Convention would apply or not. The Supreme Court on the contrary has held that the place of the signing of the award would be irrelevant to determine the applicability (or inapplicability) of the New York Convention, ie. To effectively hold that the place of signing of the award is irrelevant to determine whether Part I or Part II would apply to the arbitration. It is important to also mention that the English Arbitration Act now stands amended to read that the award would be treated to be made at the seat of arbitration, ‘regardless of where it was signed’. No such language is contained in the UNCITRAL model law, which is the subject matter of interpretation before the Supreme Court in this case.

The position in Netherlands also appears to be different from the stand taken by the Supreme Court. Netherlands law provides that if the place of arbitration has not been determined, either by the parties or the tribunal, the place of making the award, as stated in the award is deemed to be the place of arbitration[5].

Did the parties ever really dispute the seat?

The Supreme Court’s primary reason for Kuala Lumpur not being the seat was that the tribunal had not ‘determined’ the place(seat) of arbitration as defined under Article 20 of the UNCITRAL model law. What the court essentially meant was that the word ‘determination’ means that there should be an effective expression of opinion which ends a controversy or a dispute. Since the place in the award was not an expressive opinion, there has been no adjudication.

But did the parties really raise a controversy or a dispute to be adjudicated before the arbitrator, which was to be “determined”? The answer to this, is a simple no. There was never any controversy or issue raised during the arbitration regarding the seat.

CONCLUDING REMARKS

This judgment can be termed a lot of things, other than a disposition on what can be termed as a seat in an International Commercial Arbitration. While the judgment surely throws light on the entire implied exclusion jurisprudence, it is not very vocal about it. Further, the fresh disposition on the interpretation of what a “seat” is, in terms of UNCITRAL model laws is also very ambiguous. This would surely create many controversies in the time to come.

____________________________

[1] Bharat Aluminum and Co. vs. Kaiser Aluminium and Co. (2012) 9 SCC 552.

[2] Bhatia International v. Bulk Trading S.A. (2002)4SCC105.

[3] Videocon Industries Ltd. v. Union of India, (2011)6 SCC 161Yograj Infrastructure Ltd. vs. Ssangyong Engineering Construction Co. Ltd.(2012) 12 SCC 359; The rule of implied exclusion has been upheld in arbitration clauses pre dating BALCO in Reliance Industries v. Union of India, 2014 (4) and CTC 75 Harmony Innovation Shipping Ltd. v. Gupta Coal India Ltd., (2015) 9 SCC 172, which have been decided post BALCO.

[4] [1992]1AC562

[5] Netherlands Arbitration Act 1986, Art. 1037

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What is specific performance of a contract? Which contracts can be specifically enforced?

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In this article, Sanjana Tripathy discusses the specific performance of a contract and what contracts can be specifically enforced.

WHAT IS A CONTRACT?

A contract is a written or oral agreement which is legally enforceable entered into for a particular purpose by two or more parties where each party assumes a legal obligation that must be fulfilled. (See Here)

Section 10 of Indian Contract Act, 1872 states that an agreement becomes a contract if it is entered into with the free consent of parties, for a lawful consideration, for a lawful object and is not void.

The elements of a valid contract are as follows:-(See Here)

  1. Offer

The very first element of a contract is offer. Without an offer, there can be no contract. It is important for a party to make an offer to another party so that it would legally capable to enter into a contract. When an offer is made, the party would know what is being offered and what the other party wants in return.

2. Acceptance

After an offer is made, there must be acceptance of that offer from the other party. The acceptance would mean that the other party is well versed with the rules and regulations of the offer. Acceptance can be made in writing or orally.

3. Consideration

This is also a very important element in a contract. Consideration means that the other party would want something in exchange for doing something or abstaining from doing something at the promisor’s desire. It simply means an exchange of one valuable thing for another.

4. Legal Object

The fourth element of a contract is its objective. The purpose for which a contract is entered into must be legal otherwise the contract would be void.

5. Capacity to Contract  

This is one of the most important elements of a contract. The parties must be legally capable of entering into a contract. According to Section 11 of Indian Contract Act, 1872, parties must-

  1. Be of a sound mind;
  2. Have attained the age of majority;
  3. Have not been disqualified from entering into a contract by any law to enter into a contract.

6. Mutuality of obligations

This element specifies that all parties to the contract have to perform all their obligations. A contract having one-sided arrangements are declared null and void due to lack of mutuality of obligations. (See Here)

WHAT IS SPECIFIC PERFORMANCE OF A CONTRACT?

Parties to a contract must perform their contractual obligations otherwise they can be sued for non-performance. Specific performance is a discretionary order made by a court wherein a party to a contract must perform a specific action as outlined in an existent contract. Specific performance can refer to any kind of forced action, though it is usually enforced so as to complete a transaction that had been previously agreed to. (See Here)

One of the reasons the court orders specific performance is because in some contracts damages cannot be remedied by money or where the true amount of damages is not clear. The most common example of such contract is a contract for a sale of property, for instance, mere monetary damages may not remedy the purchaser’s situation. (See Here)

Specific Performance and Replevin

Replevin means ‘claim and delivery’. It refers to an action taken by a court in which an actual property is transferred to the plaintiff in a dispute. Replevin and Specific Performance are similar and are used interchangeably. The court may in some cases order specific performance in the form of replevin. (See Here)

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Specific Performance v Injunction

In an order of injunction, a person is prohibited from doing something whereas, in an order for specific performance, a person is ordered to perform his contractual obligations. Both are remedies for breach of contract but their purposes are different.

Specific Performance v Liquidated Damages (See Here)

Specific Performance

Liquidated Damages

Legal action brought into a court compelling a party to carry out the terms of a contract. Amount predetermined as total compensation by the parties to an agreement which an injured party should get if other party breaches a part of the contract.
The court’s jurisdiction can only be attracted if the breach in a real estate contract is such that it cannot be compensated by money. In some building contracts, parties foresee a breach and point out the amount of damages that is to be paid for such breach.
Contracts cannot be specifically enforced for personal services nor can it be enforced on an illegal contract, an ambiguous contract or a contract where there is an inadequate consideration. For a liquidated damage clause to be enforceable, an amount must be set forth having a relationship with the actual damages as estimated by the parties otherwise the court will treat the amount as a penalty for failure to perform the contract.

WHO CAN OBTAIN SPECIFIC PERFORMANCE?

Section 15 of the Specific Relief Act, 1963 provides for those persons who can obtain specific performance of a contract. Those are as follows:-

  1. Any party to a suit;
  2. Representative in interest or principal of any party;
  3. If a contract is a settlement of marriage or a compromise of doubtful rights between members of the same family, any beneficiary entitled thereunder;
  4. If a tenant enters into a contract for life in due exercise of a power, the remainderman;
  5. A reversioner in possession, if an agreement is a covenant entered into with his predecessor in title and the reversioner is entitled to the benefit of such covenant;
  6. A reversioner in remainder, if an agreement is a covenant and the reversioner is entitled to the benefit and will sustain material injury if there is a breach of contract;
  7. If a company has entered into an amalgamation with another company through a contract, the new company which arises out of such amalgamation;
  8. If the promoters of a company entered into a contract before its incorporation for purposes of the company and such contract is warranted by the terms of the incorporation, the company provided that the company accepted the contract and communicated such acceptance to the other party of the contract.  

AGAINST WHOM CAN SPECIFIC PERFORMANCE BE ENFORCED?

Section 19 of the Specific Relief Act, 1963, provides for those persons against whom specific performance can be enforced. Those are as follows:-

  1. Either party to a suit;
  2. Any other person claiming under him by a title arising subsequently to the contract except a transferee for value who has paid his money in good faith and without notice of original contract;
  3. If a company has entered into an amalgamation with another company through a contract, the new company which arises out of such amalgamation;
  4. If the promoters of a company entered into a contract before its incorporation for purposes of the company and such contract is warranted by the terms of the incorporation, the company provided that the company accepted the contract and communicated such acceptance to the other party of the contract;
  5. Any person claiming under a title which, though prior to the contract and known to the plaintiff might have been displaced by the defendant.

WHEN CAN A COURT ENFORCE SPECIFIC PERFORMANCE AND WHAT CONTRACTS ARE SPECIFICALLY ENFORCED?

Section 10 of the Specific Relief Act, 1963 states that a court may order specific performance of a contract under the following circumstances:-

  1. When there is no standard for ascertaining the actual damages for non-performance of an obligation given in the contract;
  2. Non-performance of an obligation of a contract cannot be compensated with money.

Section 14(3) of Specific Relief Act, 1963 provides for those contracts which can be specifically enforced by a court:-

  1. Execution of a mortgage or furnishing any other security for securing repayment of any loan which the borrower is not willing to repay provided that if only part of a loan is advanced;
  2. Taking up and paying for any debentures of a company;
  3. Execution of formal deed of partnership, if the parties have entered into a partnership;
  4. Purchasing a share of a partner of a firm;
  5. If a suit is for enforcement of a contract for construction of a building or any other work on a land provided:-
  1. The building or other work is sufficiently described in the contract so that the court is able to determine the nature of the building;
  2. Plaintiff has a substantial interest in the performance of a contract. The interest must be such that compensation in terms of money for non-performance of the contract is not an adequate relief;
  3. Defendant has the possession of the land in which the building is to be constructed or other work is to be executed.

CASE LAWS

In 2016, the Supreme Court in Robin Ramjibhai Patel v. Anandibai Rama @ Rajaram Pawar & Ors. [SLP (C) No. 31087 of 2014] reiterated that when a plaintiff wants to implead certain persons as defendants in a suit for specific performance on the ground that they may be adversely affected by the outcome of the suit, then interest of justice also requires allowing such a prayer for impleadment so that the persons likely to be affected are aware of the proceedings and may take appropriate defence as suited to their vendors.

The court also observed that the necessary parties in a suit for specific performance of a contract for sale are not only parties to the contract or their legal representatives, but also a person who had purchased the contracted property from the vendor. (See Here)

In 2017, the Kerala High Court held that a plaintiff is entitled to specific performance of a contract only if he sticks to the original terms of the contract. If there is any variation in the terms of the contract even if it for the benefit of the defendant, the plaintiff will not be entitled to seek specific performance. (See Here)

IN 2018, the Supreme Court in Sucha Singh Sodhi v. Baldev Raj Walia (Civil Appeal No.  3777 of 2018) held that specific performance and permanent/temporary injunction cannot be claimed in one suit. This was held for the following reasons:-

  1. Specific performance and temporary/permanent injunction cannot be claimed in one suit as they are independent of each other.
  2. The cause of action to claim temporary/permanent injunction against the defendants from interfering in plaintiff’s possession over the suit premises accrues when defendant No.1 threatens the plaintiff to dispossess him from the suit premises or otherwise cause injury to the plaintiff in relation to the suit premises. It is governed by Order 39 Rule 1 (c) of the Code which deals with the grant of an injunction. The limitation to file such suit is three years from the date of obstruction caused by the defendant to the plaintiff.

On the other hand, the cause of action to file a suit for claiming specific performance arises from the date fixed for the performance or when the plaintiff has noticed the non-performance of the defendant. The limitation to file such suit is three years from such date.

  1. When both the reliefs/claims are not:-
  1. similar when the causes of action to sue are separate;
  2. when the necessary constituents to the respective causes of action for both the reliefs/claims are different;
  3. when both the reliefs/claims are governed by separate sections of the Limitation Act;

then it is impossible to claim both the reliefs together on one cause of action in the same suit.

Another issue arose whether, in absence of permission granted by the trial court at the time of withdrawing the previous suit in which permanent injunction was claimed, the plaintiff can file a fresh suit where specific performance will be claimed. The court held that it would consider the statement made by the plaintiff regarding withdrawal of suit and filing of a fresh suit and this statement would serve as a part of the order for the same. (See Here)

SPECIFIC RELIEF (AMENDMENT) BILL, 2017

Lok Sabha has passed a draft bill amending Specific Relief Act, 1963 known as Specific Relief (Amendment) Bill, 2017. One of the main features of this bill is that specific performance will be ordered compulsorily by the court instead of its discretionary power. Due to wide discretionary powers, a court often awards damages generally and award specific performance as an exception. The other features of this Bill are as follows:- (See Here)

  1. The concept of “Substituted Performance” is introduced. A party affected by the breach of contract has a choice to get the contract performed by an outsider, or by its own particular organization, at the cost of the contracting default party. The affected party must issue an earlier notice of thirty days to the other party communicating the same. This idea will be introduced in the Act by substituting Section 20. Another clarification is to be made is that a party by acquiring substituted execution relinquishes his entitlement to get specific performance through court.
  2. No need to plead readiness and willingness to perform contractual obligations.
  3. A new Schedule is sought to be introduced which will contain a list of activities named “Infrastructure Projects”. Such activities are in the sectors of transportation, energy, water & sanitation, communication and social & commercial infrastructure.
  4. No injunction to be granted against infrastructure projects.
  5. Special courts for infrastructure projects.
  6. Time limit of 12 months for disposal of a case.
  7. Power of court to engage experts.

Let’s see what benefits will this Bill bring.

REFERENCES

  1. The Specific Relief Act, 1963
  2. www.livelaw.in
  3. What is Specific Performance as ‘legal remedy’? https://smallbusiness.findlaw.com/business-contracts-forms/what-is-specific-performance-as-a-legal-remedy.html
  4. Specific Performance https://legaldictionary.net/specific-performance/
  5. Mutuality of Obligation https://contracts.uslegal.com/elements-of-a-contract/mutuality-of-obligation/
  6. Main Elements constituting a Valid Contract https://www.lawteacher.net/free-law-essays/contract-law/main-elements-constituting-a-valid-contract-contract-law-essay.php
  7. What is Contracts Law? https://hirealawyer.findlaw.com/choosing-the-right-lawyer/contracts-law.html

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How to File a Complaint Before the Human Rights Commission

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In this article, Sanjana Tripathy discusses procedures for filing a case before the Human Rights Commission.

WHAT ARE HUMAN RIGHTS?

Human Rights are fundamental rights and freedoms which have a place with each person from birth till death. They are rights regardless of where a man is from, what he believes or how he carries on with his life. They can be limited yet they can never be taken away.

Section 2(d) of Protection of Human Rights Act, 1993 characterizes human rights as those rights identified with life, freedom, equality and dignity of the individual ensured by the Constitution or epitomized in International Covenants and enforceable by courts in India.

The global community has turned out to be extremely specific about human rights subsequent to seeing the atrocities committed during Second World War. The United Nations Organization provide for human rights with its Declaration of Human Rights on December 10, 1948. The member countries were requested to perceive and observe these rights and freedoms in this presentation. The member countries observe 10th December as human rights day consistently.

FUNDAMENTALS OF HUMAN RIGHTS

The fundamentals of human rights are as follows:-

  1. Human rights certainly have a place with each individual not as an individual from a specific country however as an individual from a human culture with no segregation in regards to sex, caste, religion and so forth.
  2. Human rights incorporate financial, political, common and social rights which are important to lead a life of dignity.
  3. Human rights are justiciable. They cover legitimate rights and in addition central rights.
  4. Human rights are not absolute. They are limited in light of a legitimate concern for justice, social tolerability, political security and so forth.
  5. Individuals can’t live without making the most of their human rights. Since they are unmindful of their rights, they must be instructed about these rights. They can lead a life of peace, security and nobility with the developing cognizance of these rights.

TYPES OF HUMAN RIGHTS

The accompanying are the sorts of human rights as given in Universal Declaration of Human Rights:-

  1. Social or Civil Human Rights

These rights incorporate:-

  • The privilege to life, freedom and security of people;
  • Right to freedom from bondage and servitude;
  • Right to freedom from torment or cruelty, inhuman or debasing treatment or punishment;
  • Right to freedom from discretionary obstruction with privacy, family, home or correspondence;
  • Right to wed and have family and ideal to property.

2. Political or Human Rights

These rights incorporate:-

  • Right to nationality;
  • Right to equality before law and equal protection of law;
  • Right to judicial remedies, reasonable trial and freedom from discretionary capture, confinement or outcast;
  • Right to freedom of thought, articulation, conviction, confidence, conscience and religion;
  • Right to freedom of quiet get together and affiliation;
  • Right to partake in government undertakings and equivalent access to public service;
  • Right to measure up to suffrage;
  • Right to opportunity of development and right of refuge and so on.

3. Economic Human Rights

These rights incorporate:-

  • Right to social security;
  • Right to work and the privilege to equal pay to equal work;
  • Right to form trade unions;
  • Right to rest and relaxation;
  • Right to nourishment, wellbeing and satisfactory way of life.

4. Social Human Rights

These rights incorporate:-

  • Right to take an interest in the social existence of the community;
  • Right to appreciate art and to partake in the scientific advancement and its advantages;
  • Right to the security of the good and material interests coming about because of any logical, literary and artistic creation of which the individual is the creator;
  • Right to a social and worldwide order in which the human rights as given in the Universal Declaration can be completely figured out.

FORUMS PROVIDED FOR PROTECTION OF HUMAN RIGHTS

In India, there are two commissions set up to ensure human rights:-

  1. National Human Rights Commission (NHRC)

This autonomous commission was built up on October 12, 1993. It conforms with the Paris Principles, embraced at the primary universal workshop on national establishments for the advancement and assurance of human rights held in Paris in October, 1991, and supported by the General Assembly of the United Nations in Resolution 48/134 of December 20, 1993. The Commission is an encapsulation of India’s anxiety for the advancement and security of human rights.

2. State Human Rights Commission (SHRC)

Each state has a human rights commission for insurance of human rights in a specific state. If by any chance, a man’s human rights is abused then he may file a case in the separate human rights commission.
NHRC and SHRCs are made to be supplementary to the courts and not to replace them. An official courtroom centers around punishing the wrongdoer though Human Rights Commissions centers around restoration and giving financial help to the victim without partiality to the criminal procedures against the guilty party. Commissions endeavors to make mindfulness and keep human rights from being disregarded.

FUNCTIONS OF NATIONAL HUMAN RIGHTS COMMISSION

The accompanying capacities are performed by this commission:-

  1. Examination of complaints identified with infringement of human rights either suo moto or after a petition is filed.
  2. Examination of non-performance of obligations with respect to any authority for avoiding infringement of human rights.
  3. Intercession in any legal procedures including any allegation of infringement of human rights.
  4. Going to any prison or some other establishment under the control of the State Government to see the living states of the prisoners and to make suggestions subsequently.
  5. Surveying the safeguards given under the constitution or any law for the security of the human rights and to prescribe suitable remedial measures.
  6. Examining treaties and other global instruments on human rights and making proposals for their powerful usage.
  7. Undertaking and promoting examination in the field of human rights.
  8. Empowering the endeavors of the NGOs working in the field of human rights.
  9. Spreading human rights education among different segments of society and to advance familiarity with the remedies accessible for the security of these rights through publications, the media, workshops and different means.
  10. Looking into all actualities identified with the exercises of the psychological oppressors which deter the method for the security of human rights and to make suggestions for their powerful execution.

PROCEDURE FOR FILING A COMPLAINT IN NHRC

There are two alternatives accessible for recording a grumbling in NHRC- offline and online.

Offline Procedure

The first choice is to file it offline. The printable adaptation of the complaint is given in the NHRC website “http://nhrc.nic.in/complaints_format.htm.” After taking the printout, the complainant needs to fill this form and submit it within the required time.

The complaint can be sent to:-

ADDRESS-National Human Rights Commission, Manav Adhikar Bhawan Block-C, GPO Complex, INA, New Delhi – 110023.

Or by:-

PHONE NUMBER- 24651330, 24663333

E-mail- cr.nhrc@nic.in

FAX NUMBER- 24651332

The following format must be followed:-

  • Complainant’s Details
  1. Name-
  2. Sex-
  3. Full Address-
  4. District-
  5. State-
  6. Pincode-
  7. Mobile-
  8. E-mail id-
  1. Incident Details
  1. Incident Date-
  2. State-
  3. District-
  4. Date of Incident-
  1. Victim’s Details
  1. Name of victim-
  2. No. of victims-
  3. Full Address-
  4. District-
  5. State-
  6. Pincode-
  7. Religion-
  8. Caste (SC/ST/OBC/General)-
  9. Sex-
  10. Age-
  11. Whether disabled person-

  1. Brief summary of facts/ Allegations of human rights involved
  2. Whether complaint is against armed personnel/paramilitary? Yes/No
  3. Whether similar complaint has been filed in any court/State Human Rights Commission?
  4. Name, designation & address of the public servant against whom complaint is being made
  5. Name, designation & address of the authority/officials to whom the public servant is answerable
  • Prayer/Relief, if any, sought

Signature of Complainant                                                                                                                                                        

Online Procedure

The other alternative accessible is online. The online complaint registration form is accessible in “http://nhrc.nic.in/HRComplaint/pub/NewHRComplaint.aspx.” The status of online complaint can be checked by clicking the “Complaints” option in the site which will incorporate the option of “Check Status of a Complaint Filed.” After clicking on that option, another page “http://nhrc.nic.in/advSrcCases.asp” will open in which the complainant needs to mention the following:-

  1. Document Number
  2. Journal Number
  3. Complainant’s Name
  4. Victim’s Name
  5. Date of Incident
  6. Place

The following format is for online registration:-

Your Details

Name-                                  Sex-

Address-

State-                                   PIN-

District-

E-Mail-                                 Mobile-

Victim’s Details

Name-

Address-

State-                                    Sex- Religion-

District-                                 Disability- Caste-

PIN-                                      Age-

Incident’s Details

Place-                                          State-

Incident Date-                             District-

Incident Category-                                                                                 

Sub category-  

Write Complaint-

Is it filed before any court/State Human Rights Commission? No/Yes

Relief Details

Pray/Relief sought-

Name, designation and address of public servant-

HUMAN RIGHTS ISSUES TAKEN UP BY NHRC

The following are the issues taken up by NHRC:-

  • Custodial Torture
  • Appropriate to Work and Labor Rights
  • Extrajudicial Killings
  • Discretionary Arrest and Detention
  • Over the top Powers of the Armed Forces and the Police
  • Sexual Violence
  • Struggle Induced Internal Displacement
  • Child Labor
  • Manual Scavenging
  • Brutality and victimization of Women, Children
  • Lesbian, Gay, Bisexual, Transgender Rights
  • Issues looked by Scheduled Castes and Scheduled Tribes, Religious Minorities, Persons with Disabilities

RULES PROVIDED BY NHRC FOR FILING A COMPLAINT

The following procedure ought to be taken for filing a case under NHRC:-

  1. The victim or by some other individual on his behalf may file a complaint to the Commission.
  2. The appropriate complaint, either in English or Hindi or in some other Language incorporated into the 8th Schedule of the Constitution, might be documented. Just a single arrangement of complaint should be submitted to the Commission.
  3. Complaint might be sent either by Post, Fax or even by email.
  4. Fees isn’t charged on such complaints.
  5. The complaint ought to contain:-
  • Infringement of human rights or abetment thereof or;
  • Carelessness in preventing such infringement by a public servant
  • The Commission’s jurisdiction is limited to only those offences which have been committed within 1 year from the date on which the complaint is received.
  •  Any documents attached with this complaint supporting the allegations are eligible.
  1.  The complaint must contain:-
  1. His/her age
  2. Sex
  3. Caste/Religion
  4. State and district to which the incident relates
  5. Date of incident etc.

WHERE TO FILE AN APPEAL CHALLENGING THE ORDER OF NHRC?

The Allahabad High Court in State of Uttar Pradesh v. National Human Rights Commission (WRIT C No.- 15570 of 2016) held that State Government can challenge NHRC’s order on merits since the Act does not provide for filing an appeal. It must be clarified that the State Government cannot modify, set aside or review the order at its discretion in the absence of an order. Order of the Commission can be challenged through an application for judicial review but the State Government subject to this right is bound to comply with the order otherwise the purpose of enacting the legislation would be defeated. (See Here)

WHAT IS THE EXTENT OF JURISDICTION OF NHRC?

The Supreme Court in Remdeo Chauhan @ Rajnath Chauhan v. Bani Kant Das examined the role and jurisdiction of NHRC in human rights. It stated that Section 12 (j) of the Protection of Human Rights Act, 1993 confers on NHRC “such other functions as it may consider necessary for the promotion of human rights.” It isn’t vital that every case related to the infringement of human rights will fit decisively inside the four corners of Section 12 of the 1993 Act, for invoking the jurisdiction of the NHRC. One must acknowledge that human rights are not like proclamations engraved on a stone. They are made and unmade on the understanding and through the irreversible procedure of human battle for freedom. They concede to a specific level of smoothness. Classifications of human rights, being of many varieties, are never extremely shut. That is the reason the residuary condition in subsection (j) has been so generally worded to deal with circumstances not secured by subsections (a) to (I) of Section 12 of the 1993 Act. The purview of NHRC along these lines stands developed by Section 12(j) of the 1993 Act, to make an essential move for the assurance of human rights. Such activity would incorporate inquiry into situations where a party has been prevented the protection of any law to which he is entitled, regardless of whether by a private party, a public establishment, the legislature or even the Courts of law. We are of the conclusion that if a man is qualified for the benefit under a specific law, and advantages under that law have been denied to him, it will add up to an infringement of his human rights.

Human rights are fundamental, intrinsic, immutable and natural rights to which a man is entitled just by the righteousness of his being born a human. They are such rights which are to be made accessible as an issue of right. Constitution and Legislations of a nation remember them since they are so quintessentially part of each person. That is the reason each democratic nation resolved to rule of Law put into constraint systems for their requirement and protection. Human rights are widespread in nature. The Universal Declaration of Human Rights (hereinafter referred to as UDHR) adopted by the General Assembly of the United Nations on 10th December, 1948 perceives and requires the recognition of certain widespread rights, explained therein, to be human rights, and these are recognized and acknowledged as equivalent, basic and vital for the inherent pride and advancement of a person. Thus, however, the term ‘human rights’ itself has not been characterized in UDHR, the nature and substance of human rights can be comprehended from the rights articulated in that.

Potentially thinking about the wide range of such essential rights, the meaning of ‘human rights’ in the 1993 Act has been designedly kept extremely wide to incorporate everything the rights related to life, freedom, uniformity and nobility of the individual ensured by the Constitution or embodied in the International Covenants and enforceable by Courts in India. Therefore, if a man has been ensured such rights either under the Constitution or under an International Covenant or under a law, and he is denied access to such a right, then it adds up to a reasonable infringement of his human right and NHRC has the jurisdiction to interfere for protecting it. (See Here)

Section 36 of the Protection of Human Rights Act, 1993 limits NHRC’s jurisdiction only to those complaints which are not pending before any State Commission or any other commission and are filed within 1 year from the date of the commission of offence alleged to have violated human rights.

WHAT RELIEF DOES NHRC PROVIDE?

Since NHRC is not a constitutional body, it merely recommends remedial measures or directs the state concerned to pay compensation to the aggrieved party. This does not mean that the recommendations made by the Commission are to be ignored. State is bound to comply with them. [See State of Uttar Pradesh v. National Human Rights Commission (WRIT C No.- 15570 of 2016)]

PROTECTION OF HUMAN RIGHTS (AMENDMENT) BILL, 2018

The Union Cabinet in a meeting chaired by Prime Minister Narendra Modi has approved the Protection of Human Rights (Amendment) Bill, 2018 for better protection and promotion of human rights.

This Bill proposes the following:-

  1. Incorporation of National Commission for Protection of Child Rights as an esteemed member of National Human Rights Commission.
  2. Including a female member in the commission.
  3. Joining of a mechanism to take of the cases of human rights infringement in Union Territories.
  4. Change of the term of office of chairperson and members from the NHRC and SHRCs to make them in similarity with the terms of chairperson and members of different commissions.
  5. Consistence with the Paris Principle concerning self-rule, freedom, pluralism and far reaching capacities so as to viably ensure and promote human rights.

CONCLUSION

15 years have passed since the National Human Rights Commission (NHRC) was set up in India through the adoption of the Protection of Human Rights Act, 1993, by Parliament. Throughout the years, more than 15 State Human Rights Commissions (SHRCs) have come up. The motivation to enhance the advancement and security of human rights in India pre-dates the foundation of the NHRC. Now is a decent time to analyze not just the working and adequacy of the NHRC and the SHRCs yet in addition to recognize the focal difficulties identifying with human rights later on and work towards handling them. It is critical that Human Rights Commissions (HRCs) prevail in their endeavors to promote and secure human rights. The authenticity and validity of these commissions lay on their capacity to address the issues related to human rights in a general public. It is for the Parliament to choose whether to consult NHRC with some sort of contempt powers to influence authorities to actualize its recommendations.

REFERENCES

  1. The Protection of Human Rights Act, 1993
  2. www.livelaw.in
  3. “What are Human Rights?”- Equality and Human Rights Commission https://www.equalityhumanrights.com/en/human-rights/what-are-human-rights
  4. “Cabinet approves draft bill for better protection of human rights” https://www.hindustantimes.com/india-news/cabinet-approves-draft-bill-for-better-protection-of-human-rights/story-8IHXgw5tnlQ5X99Gpk0s3I.html
  5. “Insights into Editorial: NHRC a toothless tiger: Panel chief” http://www.insightsonindia.com/2016/06/02/insights-editorial-nhrc-toothless-tiger-panel-chief/
  6. “National Human Rights Commission” http://www.yourarticlelibrary.com/human-rights/national-human-rights-commission-2/47117
  7. Website of National Human Rights Commission (http://nhrc.nic.in/)
  8. National Human Rights Commission: The Role Revisited http://legalperspectives.blogspot.com/2010/12/national-human-rights-commission-role.html

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An Insight into Law of Torts in India

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In this article, Simran Sabharwal discusses law of torts in India.

Introduction

One fine day, you are walking on a road and you fell down in a manhole. Where will you lodge a complaint? What if, someone throws water on you, what will your recourse be? What if, your neighbour throws garbage in your garden? You are sitting in a class and someone pulls your chair. What will your course of action be? A driver negligently knocks you down on the road, whom will you sue: the driver or the master? All these cases are covered in the Law of Torts. A statement that a lady has given birth to a child can also constitute a tort if the lady was unmarried. Matters related to daily lives are covered in the Law of Torts. The concept of Torts in India is an old concept though is still developing.

Meaning of Torts

Tort is a civil wrong, i.e. it is a wrong against an individual. The word Tort is derived from a Latin word ‘tortum’ which means crooked or twisted.in this sense, it is equivalent to the English word ‘wrong.’ Law is divided into two – Civil and Criminal. Civil Law is further divided into two – Tort and Contract. It is basically a breach of the duty imposed by law. It is a violation of others’ legal rights. A tort occurs when someone deliberately or through carelessness causes harm to someone.

Origin of Tort Theory

Law and civilisation co-exist. One cannot exist without another. If one flourishes, the other one develops too and with the decline in one, the other suffers. So, for offences related to day-to-day affairs, tort law was formed.

The origin of the Law of Torts can be traced to Roman precept alterium non- laedere.  The maxim means “not to injure another” i.e. not to hurt anyone by deeds or words. This maxim is similar to honesty vivere which means “to live honourably” and suum clique tribuere which is explained as to render to every man that belongs to him or it is a general expression to provide justice to each person. All these three maxims can be attributed for the development of Law of Torts.

What is Tort according to jurists?

  • Salmond defined Torts as, “It is a civil wrong for which the remedy is common law action for unliquidated damages and which is not exclusively the breach of the contract or the breach of the trust or other merely equitable obligation.”
  • Winfield mentions, “Tortious liability arises from the breach of duty primarily fixed by the law: this duty is towards the persons generally and its breach is redressable by an action for unliquidated damages.”

Winfield and Salmond’s definition are contradictory to each other. Salmond’s definition has the practical point of view while Winfield’s definition has the theorist point of view. Lawyers prefer Salmond’s point of view but the students prefer Winfield point of view. Also, Salmond’s view can be said to be narrower one but Windfield’s view can be said to be a broader one.

Law of Torts in the United States

English lawyers accepted the code of conduct and began to form remedies for violations of certain legal duties. It further led to the development of the modern Law of Torts. [1]

The Law of Torts has its origin in England but it is followed and adopted in the United States, Dominions of British Commonwealth of Nations and India. Torts in the US developed through four main stages, described by Professor White as

1) Legal science

2) Realism

3) Consensus thoughts

4) Neo-Conceptualism

The law has radically reformed itself in the last 50 years in the US as before it used to deal with cases related to minor accidents but now it deals with major social activities in the US.

For the early years- common law, private law, contract law and property law served a minor role in the lives of Anglo- American people. Seeing the diversity in decisions and cases, jurists and lawyers decided to develop the law of torts. So, in 1923 other branches of the law of torts was developed. The first volume was placed in 1934 and the fourth, and the last volume was placed in the year 1939. Though the tort law is uncodified in almost every nation yet it is codified in American law.

Law of Torts in England

  • The English law of Torts is a branch of English Common Law. Common Law is the precedents or case laws which differs from the statute law or law enacted by Acts of Parliament.
  • In fact, the word tort was introduced by the French-speaking lawyers and judges of the Courts of Normandy and Angevin Kings of England. The law of Torts consists of various judgements that are derived from legal principles and statues.  The acts made by parliament cannot be tested and remains undoubted.

Application of English Law of Torts in India

Law of Tort in India is basically English Tort law.

  • The English Law of Torts has a lot of dominance on the Indian Tort law, though the act was modified according to Indian legislation. When the British were ruling India, they introduced their own rules and regulations to administer justice in the country. In ancient Hindu law, the Sanskrit word, Jimha which meant crooked was considered to be equivalent to “tortious of fraudulent conduct.”[2] The scope of British tort was narrow at that time.
  • As the Indian people were completely unaware of the English Laws, the laws proved to be unfair for them and created injustice. In the early days of British laws, it proved very difficult to administer Indians as there was an English Judge who had to deal with a foreign language case.
  • So, in order to avoid the chaotic situation, they decided to draft an Indian Tort Law inspired by English doctrines. In the 18th century, after going through the then laws of India and getting the required permission, they decided to set up courts in India.
  • The first court started by the Britishers in India were Mayors Courts in the Presidency Towns of Calcutta, Madras and Bombay. These courts came under the jurisdiction of English statute and Acts which were then enforced in England.
  • The courts established that time worked on the principle of “justice, equity and good conscience.” The expression “justice, equity and good conscience” was interpreted by the Privy Council to mean rules of English Law so far as they are applicable to Indian society and circumstances.[3] All this stated, that the High Courts of Bombay, Calcutta and Madras followed Common Law of Torts and the other courts administered the principle of justice, equity and good conscience.
  • The Law of Torts in India is still uncodified ad is still based on Common Law of England. In absence of Common Law, Indian Courts apply the principles of justice, equity and good conscience.

Also, when we have a look on Indian judgements, in M.C. Mehta v. Union of India [4], Justice Bhagwati mentioned,

“We have to evolve new principles and lay down new norms which will adequately deal with new problems which arise in a highly industrialised economy. We cannot allow our judicial thinking to be constructed by reference to the law as it prevails in England or for the matter of that in any foreign country. We are certainly prepared to receive light from whatever source it comes but we have to build our own jurisprudence.” By the statements, we can infer that Justice Bhagwati realised the value of having one’s own law and how it helps in the growth of the nation.”

The Main purpose of Law of Torts in India

  • The main purpose of Law of Torts is to provide compensation to the person who has suffered injuries. Though in modern times, the aim is to distribute the losses among people who are in a way connected to each other.
  • Also, some writers believe that Tort Law objects to punish than to compensate. Every person has his point of view for the objective of Torts.
  • In both crime and torts, the common element is of violation of general duty. The state controls serious crimes like murder, robbery, burglary etc. In Law of Torts too, the state has control over all the common wrongs. It is believed that harm to an individual is equivalent to society.

Thus, the main purpose of Law of Torts is to punish the wrongdoer and promote peace in the society.

Reasons for the slow development of Law of Torts in India

The Law of Torts is not much developed in India as compared to other nations. Even the Indian Tort Law is not codified. There are many reasons for the slow development of Tort Law in India, some are listed below-

1) The law is uncertain. As the law is not codified and still in its developing stages, it proves to be very uncertain for the people. This is the reason why a very few numbers of cases are filed under Tort Law in India. Also, there is a lack of precedents which increases the ambiguity of Tort law. The precedents available belong to English Tort law and cannot be applied to Indian Law.

2) There is a lack of political consciousness among the people. The people are not even aware of their rights due to which Tort law is not used much in the country. This problem is because of the vast illiteracy in India which also lead to people not going to court for exercising their rights. A lot of importance is placed on people performing their duties than people demanding their rights.

3) Now, why do people ignore their rights? This is because of ignorance of their rights and the huge rate of illiteracy in the nation. Due to illiteracy they do not have knowledge of their rights and hesitate to go to courts for the remedy.

4) Poverty also remains an issue for the slow development of Tort Law in India. The population in India is mostly economically backward and as a result, they are incapable of meeting high costs of litigation. This remains a prime reason for refraining from filing a Tort case.

5) Furthermore, the judicial system is very expensive. The rate of court fee and lawyers fee is very high. As a result, the poor man decides to suffer the pain than to approach the court. The cases are also dealt in as slow as molasses manner. On the other hand, the administration of justice is so inexpensive and fast in England, that these types of cases are decided in within a year.  All these factors add up to the slow development of Tort law.

Here is a chart which shows the number of pending cases in India as on 13 October 2018.

The chart has been taken from National Judicial Data Grid. A large number of cases still remain pending which owes to the slow development of laws in India.

5 Principles of Tort Law every Indian must know

There are few principles or important points of tort law that every Indian should be aware of, as these will help the Law of Torts to develop and also enhance the judiciary system.

  • Injuria Sine Damnum and Damno Sine Injuria – These are two Latin maxims which mean legal injury without damage and the other one means damage without legal injury. Damage should be in the form of money, comfort and health. Mere loss of money or property does not come under ‘damage’.The injury should be legal injury i.e. infringement of your legal rights. Violation of legal rights is actionable even if it has not caused any real harm or loss.
  • Vicarious liability – Man is liable for the torts committed by him. But under this, a man will become liable even if he has not done any wrong. In India, many people are working under someone. So, this concept becomes necessary. Under Vicarious liability, the employer has to suffer for the harm done by an employee. This liability shifts the burden from servant to master.
  • Volenti Non-fit Injuria – This principle simply relates to the person who voluntarily consents to the risk. If the person voluntarily consents to the risk, knowing about the consequences, he has no claim against the injuries received. This principle is mostly applicable to the point of view of players and viewers. Players consents to the normal risks involved in the game, if they get hurt they don’t have any claim. Similarly, the spectators, on buying the tickets consents to all the risks they may face while watching the match. It follows the rule that if one is willing, then no harm is followed.
  • Defamation – Defamation is an oral or written statement that can hurt someone’s reputation. In India, defamation is a civil and criminal offence. Defamation can occur if a person publishes, writes or speaks a wrong statement. The main part for defamation is that the statement published should be false. Most of the cases filed under tort law in India are related to defamation.
  • Minors India has the highest number of youth. So, one of the important parts of Tort law is related to minors. A minor is a person who is not called an adult.  A minor can be called as a person who is under 18 years of age. A minor has the right to sue like an adult but he has to file the case through his “Next friend.” Also, unlike crime, minority is no defence in the law of torts. Minor can also be sued. Therefore, minority is no defence under the law of torts.

New Interests in Tort Law

Law of Tort is still in its developing stage in India. New principles are developing every day.

  • Confidentiality is an emerging concept in Tort Law. According to Black Law Dictionary, “the term that applies to something that has the quality of being confidential, secret or privileged.”
  • In the United Kingdom, a breach of confidence is an independent tort. However, there is no such concept in Indian Law. But when we look at the cases filed in Indian Judiciary, there are a lot of cases related to Confidentiality breach.
  • Breach of Confidence may be related to data, ideas or simple breach of the health of patients or leaking the account information by banks. In India, the concept has received awareness in recent years.

A look in the recent case will provide a better understanding of the topic.

Zee Telefilms Limited and Another Vs. Sundial Communications Private Limited and Others.[5]

  • In this case, the suit was brought up by the plaintiffs because of misuse of confidentiality principle and breach of copyright.
  • The company’s business was of video programming and television programming. The plaintiff worked on the concepts and conveyed it to the defendant and decided with the price negotiations.
  • But they didn’t hear from defendants afterwards. Assuming the deal is cancelled, they moved forward. The defendants breached the confidentiality principle and started working on the project solely.
  • The court emphasized that the principle of confidentiality is different from the law of copyright as the law of confidentiality also includes unpublished ideas. This case is a landmark judgement that showed the principle of breach of confidentiality in case of copying ideas.
  • Especially in India, there is a need for this principle between employer and employee, doctor-patient and bank- customer relationship.

Landmark Judgements under Law of Tort

The tort law in India is uncodified. The ambit of the tort law is wide in India. Though in recent years not many cases are filed under tort law, yet there are a few landmark judgements that need to be considered for better understanding.  

  • As many people in India travel from buses and trains and that too sitting on the top of it.

Rural Transport Service v. Bezlum Bibi [6], is such a case. Here, the conductor allowed the people to travel on the roof of the bus. During the journey, one of the passengers got hit by a branch of a tree and as a result,  fell from the bus and got injured. The court mentioned that the conductor was liable as –

      • Firstly, the act of allowing people to travel on the top of the bus was rash and negligent. He should have stopped people to travel on the roof. Inviting them to travel on the roof of an overloaded bus proved his negligence.  
      • Secondly, the person who consented to travel on the top of the bus contributed to the accident. Hence, it was contributory negligence. The consequences of an act were foreseeable.
  • Bhim Singh v. State of Jammu and Kashmir [7].

In this, the police wrongfully detained the plaintiff from attending the Assembly election. The plaintiff was an M.L.A. of Jammu and Kashmir assembly. He was deprived of his personal life and liberty to attend the assembly session. To this, the court awarded the plaintiff a sum of fifty thousand rupees as a relief.

Why cases related to Law of Torts are not frequently found in the Indian Courts nowadays

The Law of Tort is based on morality. For social development and growth of the society, the law of torts is very necessary. If one wants to have complete knowledge of the necessity of Tort law, one can look into the growth of Tort Law in England. The tort litigation has grown three times in England and Indian Tort Law has largely been borrowed from English law. Though we have borrowed a large portion from the West, we need to make use of it too. Also, we need to adopt the law according to our needs i.e. according to the morals of our society.

Therefore, it will be unnecessary to state that the law is not of use. Law of Tort is completely necessary in India as many cases are filed under defamation, nuisance, negligence etc.

Conclusion

  • The tort law in India is not unnecessary but definitely requires development. The reasons for slow development should be looked upon and further amendments must be made.
  • The fee involved in filing a case should be reduced so that every individual who suffers has a court to approach. As of now, poor people don’t even complain about the wrongs that happen to them.
  • The elimination of difficulties will help in the growth of the nation
  • If these lacunae are removed, tort litigation will certainly witness a growth in India.

[1]  Anand and Sastri, Law of Torts,3rd Ed. by C. Kameswara Rao, p.1.

[2] Text of Narada cited in Priyanath Sen Hindu Jurisprudence, p 211.

[3] Waghla Rajsanji v. Shekh Masludin, (1887) 14 IA 89 ; Ratan Lal v. Vardesh Chander, AIR 1976  SC 588.

[4] AIR 1988 SC 1037.

[5] 2003 (5) BomCR 404.

[6] AIR 1980 Cal 165.

[7] AIR 1986 SC 494.

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Impact of US-China Trade War on India

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Kashish Khattar is a fourth-year law student at Amity Law School, Delhi. This article mainly revolves around the impact of the US-China trade war on India. 

What is a trade war?

A trade war is when a nation imposes tariffs or quotas on imports and the other countries retaliate with the same vigour through the imposition of more or similar types of tariffs. It definitely affects international trade. Typically, a trade war starts when one country tries to protect its domestic market and tries to create jobs for its people. In a narrow point of view, this kind of a move may look that it would work. However, in the long term a trade war is said to cost jobs, slow down the economic growth of every country involved. Let us also not forget about the issue of inflation when the supposed tariff increases the price of the imports.

The last time it happened in the United States in recent history was in the 1930s, which was the Smoot Hawley Tariff which increased 900 import tariffs by a percentage of 40-48 per cent, with the intention of supporting US farmers who had been affected by the Dust Bowl. This raised food prices for Americans who were already in a bad place due to the Great Depression. The other countries involved started with their own tariffs and it forced global trade to go down by 65%, which worsened the depression, and become one of the many reasons which started the World War II.

How did the US China Trade War start

It all started this year, let us trace the events through a timeline:

  1. On 22nd January, President Trump imposes tariffs on the imported Chinese solar panels and washing machines. China is regarded as the world leader in solar equipment manufacturing.
  2. On 8th March, Trump asked China to develop a plan to reduce the USD 375 billion US trade deficit by a 100 billion dollars. China is open to the idea, because the part of their economic reform plan is to reduce their dependence on exports. But the Chinese warn that they cannot do much, because the deficit is mainly due to the high demand of Chinese goods in the American market.
  3. On 22nd March, Trump announced that it would levy tariffs on USD 60 billion of imports on China. The Trump Administration also said that it will limit the US technology transfers to Chinese companies. China needs all foreign companies who want to sell their products in the mainland to share all their trade secrets with Chinese companies. China responded to this by imposing tariffs on USD 3 billion in US fruit, pork, recycled aluminium and steel pipes.
  4. On March 26, the White House started negotiating with the Chinese and focused on three main requests, which ranged from China reducing tariffs on US automobiles, Chinese importing more US semiconductors and American business sector to have greater access to China’s financial sector.
  5. April 3, the administration announced that it may impose tariffs of USD 50 billion on Chinese electronics, aerospace and machinery. China retaliated with 25% tariffs on USD 50 billion of American exports to China. China targeted 106 products which mainly affected the industries located in states that supported President Trump in the 2016 election.
  6. China also cancelled all the US soybean import contracts. It used to import USD 12 billion in US soybeans. China can easily replace it’s demand through Brazil’s supply. US farmers used to sell half of their crop to China. China being their biggest customer. In July this year, soybean prices hit a 10-year low for the US Farmers. 
  7. In April, President Trump said that he will impose tariffs on USD 100 billion more of Chinese imports which would equals to 1/3rd of the US imports from China. China announced that the trade negotiations broke down.
  8. May 4, 2018 – The trump administration listed out 5 demands and presented them to China: (i) end subsidies to tech companies; (ii) stop “stealing” US IPR; (iii) cut tariffs on US goods by 2020; (iv) open China to more of American investment; and (v) reduce trade deficit by USD 200 billion by 2020.
  9. It is expected that China will not be able to meet the first two demands, China plans to reduce its trade deficit also. China also agreed to import more US products.
  10. China by mid of May, agreed to remove tariff on US pork imports, further it also allowed Qualcomm to acquire NXP. What they wanted in return was that US remove tariffs on Chinese telecom company ZTE. By the end of May, the White House said it would announce a final list of products by mid June which will receive tariffs. By the end of June, investment restrictions would also be announced.
  11. By July, President Trump’s tariffs were in effect, they hurt USD 34 billion Chinese imports. China retaliated with a 40% tariff on US automobile industry. The administration in a few days time also announced 10% percent tariffs on USD 200 billion Chinese imports, which would go in effect from 24th September. The tariffs will then rise to 25% by the end of the year. They are expected to raise prices on a variety of goods. China retaliated by adding tariffs on USD 60 billion in US exports. Trump administration threatened to add tariffs until all of the USD 500 billion of Chinese imports are hurt by it.
  12. In August, the White House imposed a 25% tariff on USD 16 billion worth of Chinese goods. It went into effect on August 23. It is mainly levied on industrial equipments such as tractors, plastic tubes, and chemicals. In retaliation, the Mainland announced a 25% tariff on USD 16 billion worth of US goods, which mainly included automobiles and coal.

Effects on India

The odds are, the trade war the Trump administration is pursuing is likely going to — in

economic terms — harm everybody else much more than the United States.

  • Adam Posen, President Peterson Institute for International Economics.

India being the fastest growing economy in the world today will face the consequences of this trade war. The basic principles of Demand and Supply would come into the picture. The shortage of supply of a good, either finished or raw material will most likely increase the consumption price for the consumer. Further, the burden of additional taxes would also be borne by the end user. The effects won’t be limited to a particular area or sector but they would be multifold:

Increase in Exports

The direct impact on the Indian market could be an increase in the India- US trade market as the US-China trade quota could fall given the situation of tariffs. The US could look forward to finding alternatives for Chinese products whose prices have gone to the sky post-tariff levying. India, which has a $60 billion trade deficit with China, may stand to benefit as Xi Jinping moves to slap levies on US goods such as soybean and simultaneously removes levies from Indian exports. (Beijing has recently slashed tariffs on soybean imported from India, South Korea, Bangladesh, Laos and Sri Lanka from the current three per cent to zero). If Chinese exports to the US slow down as a result of the trade war, India may be able to gain significant traction in textile, garments and gems and jewellery. However, China could still find crude oil from alternative sources such as West Africa which has a similar quality as US crude, the US would find it hard to find an alternative market as big as China. However, if crude oil prices fall as a result, then other things constant, India benefits from this perspective.

Weakening Rupee

The impact on the rupee, which is already battling historic lows against the US Dollar making oil and other imports extremely expensive. This would certainly result in inflation, widening of the current account deficit, which is already at 2.4 per cent against 0.7 percent FY 2017 and an overall macroeconomic instability and possible slippages on sovereign ratings. The US Fed is already on its quantitative easing policy of gradual hiking of interest rates which will encourage flight of capital from debt and equity markets in emerging economies. The trade war will only add fuel to fire. India’s highest imports from the US are very critical in nature like nuclear reactors, boilers, mineral fuels, aircraft, space crafts, medical equipments etc. Any higher duty on these products will impact India’s key sectors. The United States and it’s companies have the stomach to absorb such an impact. However, India does not share the kind of stomach or strength like the US to absorb such high costs.

Increase in Interest Rates

Rising interest rates in America could mean a few bad days for the India’s equity market. As higher interest rates in the US will lead to people withdrawing their money from bonds and equities from emerging markets like ours and investing it into their own economy which guarantees them with better and higher interest rates and returns. It can be said that a surge in our domestic inflows is a reassuring factor for our Indian equities but higher rates do make investing in the United States a better option as of now.

Volatile Markets

Increase in interest rates by the Federal Reserve in the United States, because of importers passing on their increased costs of raw material will affect emerging economies such as India, both for their debt and equity market. Even a minor disruption in the US financial markets has major implications for India. The three external risk factors – higher tariffs, rising interest rates and elevated bond sales are coming at a time when the Indian banking system is already stressed with NPAs. The economy of the country, especially the financial markets have to be ready for a lot of volatility and stress from the combined effects of global and domestic challenges. Increase in Supplies

Supply chain disruption is another threat which looms large, as the Chinese export to the the US is made up of 30% imports it makes and then finishes these intermediate products to final products. In the event of the export demand from the US going down, the imports will be affected directly. This could lead to excess supply in the emerging markets from where these are imported. India is one of these markets and imports a variety of intermediate Goods.

“India can become more competitive in segments such as textile, garments and gems and jewellery since India already has an edge,” says says economist Upasna Bhardwaj of Kotak Mahindra Bank in a Livemint article. However, this is doubtful in the short run because China’s exports to the US are much more diverse and it’s a tall order for India to fill the gap.

Conclusion

While the Trade War which seemed like a distant reality earlier has become a true tale of our times and one which will possibly have heavy effects in the years to come, what remains to be seen is how exactly things move. The Republican White House has constantly made its Make in America agenda very clear and is leaving no stone unturned to achieve it. But with the determination also comes a hard reality of fighting with their biggest trade partners and their retaliation which could be very harmful in the times to come. The most certain thing about this trade war is its uncertainty.

Every day a new action is taken which invites an equal and opposite reaction. In these scheme of things, the Indian Government is making a deal with the American authorities to work out a plan where Indian goods purchased by the US don’t face the tariffs and the supply-demand equation remains healthy. The ongoing changes cannot be stopped halted, the volatile stock markets which react the moment a new tariff is imposed or a retaliation is announced. The weakening rupee or the rising crude oil prices. There is also the excess supply scare moving over India or other emerging countries ahead.

None of these questions has a definite answer as the problem at hand is neither static nor at a halt. It is an ongoing dialogue where dynamic change occurs almost every hour. The best course India could take is to take advantage of the improved trade relations it could build and hope to increase its exports. It could also plan how it would use its surplus resources if China refuses to buy them due to lack of demand. Alternative buyers or usages of these products should be a priority of the organizational leaders.

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What is the one technique that helps you stay ahead of the curve?

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Last week, I read somewhere about a weird practice of a famous international music band prior to each of their performance. The band had like 50 equipment set-up for their performance. So, before their performance they used to give a checklist to the organisers instructing how they want the setup to be.

One of the things listed in the checklist was to have half a glass of water with the coin inside, on stage before each performance. The band used to cancel the performance if this condition was not fulfilled when they did a sound check.

It all sounds pretty weird, until you realise the reason behind the bizarre request.

The band wanted the setup to be exactly as per their instructions. So when they did not find the glass of water with the coin on stage, they’d realise that their checklist was not thoroughly followed. This checklist test is brilliant in its simplicity!

They can’t check for each technical thing from their checklist but they can  look for the coin in the half empty glass. It is symbolic. If somebody did not put the glass there, they probably ignored other far more important instructions too, which might diminish the overall performance.

On the other hand, if one followed that seemingly illogical point in the checklist, they could be sure that their every request was fulfilled.

How do you manage your multitude of tasks and goals?

In my experience, I have found that being prepared is the first step towards success. But is there that one technique which helps you stay ahead of the rest?

Just like the music band relied on the checklist for a perfect performance, we at LawSikho, too believe in the importance of checklists, as a part of the curriculum in our contract drafting course and M&A course. We train you to make checklists for important contracts and critical, high value transactions.

Even big law firms create ‘closing bibles’ that are to be followed while closing a big transaction by everyone involved.

Therefor we inculcate the habit of preparing a similar checklist before drafting a contract, or preparing a due diligence report. As a corporate lawyer, clients will pay you a premium if you have a reputation to not miss a single detail. How do you become that sort of a lawyer with amazing eye for details?

We have to teach our students to be ultra prepared whenever they approach a task at hand, and develop more suitable time saving and efficient methods. That’s at the heart of corporate lawyering.

But being prepared is not easy. Law schools don’t prepare you for such things.

Very often, the first step of preparation is to either make a mind map, or a checklist. Some very successful lawyers I know obsessively keeps making checklists and mind maps. Be it court cases, client meetings, team meetings and the likes.

You could be a lawyer, a law student, a CA or even a businessman. We all face instances where such checklists are not only handy, but preferred. You may have to convince a judge with your fantastic set of arguments which are backed by precedents and the law. Or, you might have to do a paper presentation in your classroom for an assignment. Or, you have to acquire a new client for your business.

You need to be well prepared in order to convince your audience to go with your idea.

The fact remains that when you walk into the court, or your classroom, or the conference room, you have to own it. The only way to do that is to work a little more than the rest, and be more prepared than them.

You have to know their strategy and prepare to beat them at it.

Having a checklist helps you to keep a track of the things that are to accomplished in order to complete the task or the goal.

So let’s say right before a hearing in the court, you prepare a checklist for the same, by making a list of the grounds involved, main arguments, supporting case laws, etc. You also prepare a checklist for the brief, with all the necessary documentations with the contentious points highlighted or flagged for convenience.

These checklists help you stay on point and accomplish the tasks in an organised manner. You’d know not only the things to be done, but also the sequence in which they need to be done. They also help to improve your overall efficiency as well as time management.

It makes sure you don’t forget to get a critical information from client before a case.

Let us take another example. For example, there is a corporate lawyer, who has a multitude of clients, deadline, and associated work to do. If he/she do not have a plan of action to tackle this in a prepared manner, then they are headed towards doom.

Imagine, if one client calls up asking for a specific query, pertaining to a specific clause in the shareholder agreement, while the lawyer is busy contemplating a suitable business model for another client? Which one should they prioritise and how?

Checklists can make your life simple and take away a lot of headache and heartburn.

There should be multiple checklists in place at each crucial juncture, (like for drafting a contract, conducting due diligence and more), to ensure that nothing important is left out.

The best way to ensure success is by preparation. Vision, diligence, and drive matters only when, it is aided by due preparation. So start preparing well. Do not hesitate or overthink things.

Not only how to prepare and the importance of checklists or mind maps, but we can help you learn the techniques which you can carry throughout your career like networking, preparing strategy notes, drafting contracts and various related documents, and more, that will not only impress clients, bosses, peers and judges, but set you apart from the ordinary masses.

We at LawSikho can provide you the tools for success through our curated online courses.

But, it is you who has to take the first step. You can learn on the go through our digital learning management system available on Android and iOS applications. All you need to do is give 6-8 hours of your time per week!

In turn, you get realistic legal exercises to work on, live video sessions held after regular work hours (job or law school) followed by personal written feedback. You get to ask questions, clear your doubts in the live session or the online forums. You learn not only the statutes, but also the practical application through exercises, on drafting various pertinent documents, strategizing and more!

Don’t miss this opportunity of a lifetime and enroll now! Get ahead of the curve. It is always about the skills you learn and then practice, thereby attain mastery.

All the best.

 

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Concept of share capital under the Companies Act

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This article is written by Sneha Chawla, while pursuing NUJS Diploma in Entrepreneurship Administration and Business Laws. 

Introduction

Sub-section 84 of Section 2 of the Companies Act 2013, defines “Shares” as, “Share” means a share in the share capital of a company including stocks. Shares are considered as a type of security. Securities is defined in the Sub-section 80 of Section 2 of the said Act, which refers to the definition of the securities as defined in clause (h) of section 2 of the Securities Contracts Act, 1956.

According to Section 44 of the said Act, the shares of any member in a company shall be movable property. It is considered to be transferable in the manner provided by the articles of the company. 1

According to Section 45 of the said Act, it mandates on all companies having a share capital to ensure that the shares of the company shall be distinguished by a distinctive number. This requirement does not apply where a share is held by a person whose name is entered as holder of beneficial interest in the records of depository. 2

Allotment of Securities

Offers for shares are basically made when application forms are supplied by the company. It is considered an allotment when an application is accepted. It is considered as an appropriation out of the previously un-appropriated capital of a company. Consequently where forfeited shares are re-issued, it is not the same thing as an allotment.3

For an allotment to be considered valid it shall comply with the requirements of the and principles of the law of contract that is regarding acceptance of offers.

Statutory Restrictions on Allotment

1. Minimum subscription and application money

According to Section 49 of Companies Act, 2013 the first requisite of a valid allotment is that of minimum subscription. In the given prospectus of the company the amount of minimum subscription shall be stated when shares are offered to the public. No shares shall be allotted unless a specified amount has been subscribed and the application money, which shall not be less than the appeal that was held to be successful, the decision of stock exchange was set aside and the listing would be granted. The allotment would be saved.4

2. Over-subscribed Prospectus

An allotment is valid when the permission of a stock exchange has been granted and the prospectus being considered as over-subscribed portion of the money received shall be sent back to the applicants within the given time frame.

Principles of Allotment Of Shares

1. Allotment of shares by proper authority

Allotment is generally made by a resolution that consists of the Board of directors. But where the articles so provided, an allotment made by secretaries and treasures was held to be regular.

2.Within the reasonable time

Allotment is basically made within a reasonable or specified period of time otherwise the application shall lapse. The specified time frame of six months between application and allotment is held to be not reasonable.

3. Shall be communicated

It is primary that there must be communication of the allotment to the applicant. Posting of a properly addressed and stamped letter of allotment is considered as a sufficient communication even if the letter were to be delayed or lost.5

4. Absolute and unconditional

As per the terms and conditions of the applicant the allotment must be absolute and unconditional. Thus where a person applied for 400 shares on the condition that he would be appointed cashier of a new branch of the company, the Bombay High Court held that he was not bound by any allotment unless he was so appointed. 6

Global Depository Receipt

As given under Section 41 of the Companies Act 2013, a company may pass a resolution in its general meeting authoritising it to issue depository receipts in any foreign country in such manner and subject to such conditions as prescribed by the company.7

Private Placement

According to Section 42 of Companies Act, 2013, a company may make a private placement through issue of offer letters for private placement. Provisions of Section 42 become applicable to such placement. Provisions of Section 42 become applicable to such placement. The offer of securities or invitation to subscribe for securities can be made to a number of persons but not exceeding 50 or such higher number as may be prescribed. This number is not to include qualified institutional buyers and employees of the company being offered securities under a scheme of employees stock option as per the provisions of Section 62(1)(b). This can be done in one financial year and on such conditions as may be prescribed which is to include the form and manner of private placement.8

The first Explanation to sub-section (2) provides that an offer of private placement to more than the prescribed number is deemed to be an offer to the public and is governed by the provisions of (Ss. 23-41) relating to public issues. This will be so whether the company intends to go in for enlistment or not in or outside India.

The Second Explanation to Sub-Section (2) states that for the purposes of this sub-section, the expression used in it will have the following meaning –

“A qualified institutional buyer” means one as defined in SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 as amended from time to time.

According to [Section 42(3)] no fresh offer or invitation is to be made by the company unless allotments under any earlier offer have been completed or that offer has been withdrawn or abandoned.

All moneys payable towards subscription have to be paid through cheque or demand draft or other banking channels and not cash.

As per Section 42(5) Securities have to be allotted within 60 days of receipt of application money failing which the application money would have to be refunded within 15 days or else 12 per cent interest would become chargeable. The money received on application is to be kept in a separate bank account in a scheduled bank and is to be utilized only for adjustment against allotment of securities or refund as given under Section 42(6).

Offers can be made only to persons whose names are recorded by the company prior to the offer. They should receive the offer by name. A complete record of such offers has to be kept by the company in a prescribed manner. A complete information about an offer has to be filed with the Registrar within a period of 30 days of circulation of the relevant private placement offer letter. As given under Section 42(7) a company offering securities under this section is not to release any public advertisements or utilize any media, marketing distributing channels or agents to inform the public about the offer.

Section 42(8) explains that after making allotments, the company shall file with the Registrar a return of allotment in the prescribed by the company which consist of the complete list of all the security holders along with their full names, addresses, number of securities allotted and also any other information.

Consequences in case of default

Section 42(10) provides an explanation stating that any contravention of the section would make the company, its promoters and directors liable to a penalty which may extend to the amount involved in the offer, or two crore rupees whichever is higher. The company shall then be in a position to refund the money to subscribers within a specified time frame of 30 days of the order imposing the penalty.

Numbering of shares

Every share in a company has to be distinguished by its distinctive number. The proviso to this declaration says that this section is not to apply to a share held by a person whose name is entered as a holder of beneficial interest in a share in the records of a depository.

Certification for shares

An allottee is generally permitted to have from the company a document, that is the share certificate. And this certificate certifies the allottee is the holder of the specified number of shares in the company.9 Shares in a depository record are not required be given their distinctive numbers. The right of an allottee to get his certificate cannot be defeated by putting up the right of lien for any dues owed by the allottee to the company.

A complaint was allowed to be filed at a place other than the company’s registered office.

Duplicate Certificate

A shareholder shall carefully preserve and store his certificate as he shall not be issued a duplicate unless and until it he shows that the original certificate is lost, damaged or destroyed by any means and is surrendered to the company. 10

5 See, Ss. 4,5 and 6, Indian Contract Act, 1872,

6 Ramanbhai v Ghasiram, ILR (1918) 42 Bom 595,

7 Section 41 of Companies Act 2013,

8 Section 42 of Companies Act 2013,

9 Section 46 of Companies Act, 2013,

10 Section 46 of Companies Act, 2013,

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Register of members under the Companies Act

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This article is written by Sneha Chawla, while pursuing NUJS Diploma in Entrepreneurship Administration and Business Laws. 

REGISTER OF MEMBERS

According to Section 88 of Companies Act, 2013 every company shall maintain certain registers in manner prescribed. The forms of register are discussed below.

Register of debenture holders

Register of members indicating separately for each class of equity and preference shares held by each member residing in or outside India;

Register of any other security holders. The contents of such registers, their form and manner are now to be prescribed under the rules.

Earlier under Section 150 of the 1956 Act, the Register of Members had to contain the following particulars:

  • Members name, address and occupation;
  • Amount of shares held by every member and the amount of shares that have been paid;
  • Here all shares shall be distinguished by its appropriate number;
  • The date of joining as members;
  • The date at which any person ceased to be a member;

The register usually a computer record or a bound book. Companies are usually required to maintain an index of members. Generally the register is kept in the form of an index or a separate card index is usually used for these purposes. This is required to enable entries relating to a particular member to be readily found. If any changes are made in the register they shall be noted on the index within fourteen days. 1

The Tribunal may, after hearing the parties to the appeal under sub-section (1) by order, either dismiss the appeal or direct that the transfer or transmission shall be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved.

The provisions of this section shall not restrict the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal.

Where the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992 or this Act or any other law for the time being in force, the Tribunal may, on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned.

REGISTER AND INDEX OF BENEFICIAL OWNERS

According to Section 88(3) of Companies Act, 2013 at a point where shares and debentures are held in the demat form, the register and index of beneficial owners maintained by a depository under Section 11, Depositories Act, 1996 is to be deemed as an index and register of members and that of debenture holders, as the case may be. 2

 

FOREIGN REGISTER OF MEMBERS

According to Section 88(4) of Companies Act 2013, If a country has issued shares or debentures to people who are residents of another country, the company shall maintain a branch of the register in that country. This shall be termed as a “foreign register”. It is required to be maintained in the prescribed manner. The foreign register is generally a part of the company’s home register which is to be called as the principal register. The foreign register is bound by the same rules as of the principal register. Usually an advertisement for closure must be published in a newspaper that is circulated in the district where the foreign register is maintained . Entries made in the foreign register shall be transmitted to the home office and a duplicate register shall be maintained in the home office. Generally when entries are made in the foreign register are not to be reflected in the principal register. When the foreign register is discontinued they shall be shifted either to some other foreign register or to the principal register. 3

RECTIFICATION OF REGISTER OF MEMBERS

According to Section 59 of Companies Act 2013, states that if any persons name appears in the registry of members and they are presumed to be shareholders or members even if they aren’t so. On the contrary if a person’s name isn’t in the register, then it shall be considered that he isn’t a member even although he might have done everything in order to entitle him to become a member. The company is has the responsibility to keep the register up to date in order to provide accurate and correct position as to particulars of shareholding. If the company fails to abide by these guidelines an order shall be sought from the Tribunal in respect of all matters falling within Section 59. 4

The power to order rectification of the register has, therefore been conferred on the Tribunal . Generally an aggrieved person or any member or the company itself can apply for rectification on any of the stated grounds:

If a person’s name has been entered in the register without sufficient cause. In this case rectification has been ordered on the basis that a person was induced or instigated to become a member by misleading circumstances, where the allotment was held as invalid or where a forged transfer is registered or where the allotment was subject to shareholders’ approval and they did not do so or where a transfer could be effected only with the approval of the Board of directors and there was no evidence of any such approval.5

If a persons name is in the register without a sufficient cause is deleted.6

Wherein a person has fulfilled every requirement of law in order to enable him to become a member , but there is default or delay on part of the company that would have led to “unnecessary delay” while placing his name in the register. This also includes where a person is denied registration to a transfer within the meaning of Section 58 and where a person has been rightly ceased to be member but his name has not been removed with due promptitude from the register. 7

Matters dealing with foreign members or debenture holders who are residing outside of India, the petition for rectification has to be made to a competent court outside India as specified by the Central Government, as per Section 59(1) of Companies Act 2013.

In the year 1988 , according to Section 155, a regular suit for rectification can also be filed and this would be the only appropriate remedy where tricky scenarios were involved.

Even though the court was granted elaborate discretionary powers in order to decide all questions those are necessary in order to determine with an application for rectification, yet a petition under this section was not considered in favour with certain cases.

In the case of Jayashree Shantaram Vankudrev Rajkamal Kalamandir (P) Ltd, the Bombay High Court held that : Where discovery and inspection are necessary and complicated questions such as forgery and fabricated documents arise, the summary procedure trial under Section 155 i.e, Section 59 should not be allowed.

Delhi Court has rejected a petition under this section as it involved ascertainment of a number of facts like the value of imported machinery against which shares were allotted and which required expert opinion and its cross examination and the Madhya Pradesh High Court did not entertain a petition which required as to whether there was a free consent or one under undue influence or fraud.8

LIMITATION ACT NOT APPLICABLE

Though the period of limitation is not applicable, an action which is initiated several years after the cause of action may not be entertained because of inordinate delay. An aggrieved person shall not be prevented from approaching the NCLT by reason of delay in exercising his rights, the period of limitation being not applicable. 9

SPOT DELIVERY CONTRACT

In the case of spot delivery contract, the consideration is offered much after the date of the sale. The transfer was held to be void and refusal of registration justified.10

DIRECTOR’S POWER OF RECTIFICATION OF ENTRIES

It is open to the discretion of the directors to rectify members registered even when an entry has been detected. There is no certain requirement in this scenario to apply to the tribunal for an order of rectification.

“If there is no dispute, and if the circumstances are such that the Tribunal would order rectification”, the Board may itself effect the necessary corrections. “An application to the court is only essential when the company disputes the right to rectification. There is no certain reason as to why the directors if they bona fide agree and that a shareholder has the right to avoid a contract should not thereupon assent to the rescission of the contract and rectify the register in the appropriate manner.

However, the directors have no power to rectify the register by substituting he name of another person in the place of an existing member, except on an application for transfer duly made in compliance with the provisions of the Act.”

References

1 Section 88 Companies Act,2013,

2 Section 88(3) Companies Act, 2013,

3 Section 88(4) Companies Act, 2013,

4 Section 59 Companies Act 2013,

5 Chotoo Sud v Bhagwan Finance Corpn(P) Ltd, (2006) 130 Comp Cas 567(CLB),

6 Jayantila Purushottam Patel v Gordhandas Desai (P) Ltd,(1967) 1 Comp LJ272: (1968) 38 Comp Cas 405 (Bom),

7 Dale & Carrington Investments (P) Ltd v PK Prathapan,(2002) 111 Comp Cas 410 (CLB),

8 Punjab Distilling Industries v BPC Mills Ltd, (1973) 43 Comp Cas 189(Del),

9 Tommy Mathew v Duroflex (P) Ltd, (2004) 122 Comp Cas 741 (CLB),

10 Bhagawati Developers v Peerless General Finance & Investment Co, (2005) 6SCC 718: AIR 2005 SC 3345

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