This article is written by Dhruv Bhardwaj, a student of Amity Law School, Delhi. In this article, he covers the principles of Right to Equality in the Indian Constitution which are laid out in Article 14-18. 

What is Right to Equality

Each citizen of India is guaranteed the right to equality by Articles 14 to 18 of the Constitution. Article 14 encapsulates the general standards of equality under the watchful eyes of the law and restricts nonsensical and baseless separation between people. The succeeding articles layout explicit utilization of the general standards set down in Article 14. This article goes over the Right to Equality in India covering every one of the articles that this Right exemplifies.

Equality Before Law

The idea of equality does not mean outright equality among individuals which is practically unrealistic to accomplish. It is an idea implying the absence of any extraordinary benefit by reason of birth or the like for any individual, and furthermore the equal subject of all individuals and classes to the ordinary law of the land. As Dr. Jennings puts it: “Equality before the law implies that among equivalents the law ought to be equivalent and ought to be similarly applied, that ought to be dealt with in a like manner. The privilege to sue and be sued, to prosecute and be prosecuted for a similar sort of activity ought to be the same for all residents of full age and comprehension without refinements of race, religion, wealth, societal position or political impact.”

Equality Before Law and Rule of Law

The assurance of equality before the law is a part of what Dicey calls the Rule of Law in England. It implies that no man is exempted from the rules that everyone else follows and that each individual, whatever be his position or conditions, is subject to the purview of ordinary jurisdiction. Professor Dicey gave three meanings of the Rule of Law:

• Absence of Arbitrary Power or Supremacy of the Law:

This provision means that under no circumstances can the use of power exercised arbitrarily overshadow the supremacy of the law. To put it differently, it is also said that a person can be punished for nothing other than a breach of law.

• Equality Before the Law:

It implies subjection of all classes to the ordinary rule administered by ordinary law courts that everyone must follow. This implies ‘nobody is exempt from the laws that apply to everyone else with the sole special case of the monarch who won’t ever be blamed no matter what’. Everyone in England, whether he is an authority of the State or a private individual, will undoubtedly comply with the same law. In this manner, public authorities don’t hold a privileged position in Great Britain. In Great Britain, there is one arrangement of law and one arrangement of courts for every citizen, i.e., for public authorities as well as private persons.

• Predominance of Legal Spirit:

The Constitution is the aftereffect of the ordinary law of the land that everyone must follow. It implies that the pool out of which the rights of people arise isn’t the rigid Constitution but they are the standards as characterized and upheld by the Courts instead.

The first and the second provision apply to Indian framework yet the third part of Dicey’s rule of law does not make a difference to the Indian framework as the source of rights of people is the Constitution of India. The Constitution is the Supreme Law of the land and all laws sanctioned by the legislature must be steady and in consonance with the provisions of the Constitution.

Equal Protection of the Laws

The assurance of equal protection of laws is like one encapsulated in the fourteenth Amendment to the American Constitution. This has been translated to mean subjection to equal law, applying to all in similar conditions. It just implies that all people circumstanced in a similar footing will be dealt with in a like manner, both, in terms of the benefits received by them and liabilities incurred by them which is forced by the laws. Equal law ought to be connected to all in a similar circumstance, and there ought to be no separation between one individual and another. With respect to the topic of the legislation, their position is the same. In this way, the rule is that the like ought to be dealt with in a like manner and not that the unlike should be treated in a like manner. The rule of law forces an obligation upon the State to take exceptional measures to counteract the fierceness which can arise by police procedure. The Rule of Law exemplified in Article 14 is the “basic feature” of the Indian Constitution and subsequently, it can’t be crushed even by an amendment of the Constitution under Article 368.

The guarantee of the equal protection of laws is accessible to any individual which also extends to any organization or affiliation or group of people. This is signified by the words ‘any person’ in Article 14 of the Constitution of India. The protection of Article 14 of the Constitution stretches out to both the natives and non-residents and to legal as well as natural persons. The equality before the law is ensured to all without respect to race, colour or nationality. Organizations being juristic people are additionally deemed to get the benefits provided by Article 14.

Right to Equality Under Article 14

According to Article 14, it is an obligation to the State to not deny to any person equality before the law or equal protection of laws within the territory of India. The concept of ‘equality before law’ is taken from the English Constitution and the concept of ‘equal protection of laws’ is borrowed from the American Constitution. Both these articulations aim at setting up what is designated “equality of status” in the Preamble of the Constitution.While both the articulations may appear to be indistinguishable, they don’t generally pass on a similar significance. While ‘equality before law’ is, to some degree a negative idea suggesting the absence of any special benefit for people and the equal subject of all classes to the conventional law. “Equal protection of law” is an increasingly positive idea inferring equality of treatment in equal conditions. Notwithstanding the aforementioned things, one overwhelming thought regular to both the articulations is that of providing justice.

Exceptions to the Rule of Law

The rule of equality given in the Constitution of India is not a straitjacketed rule without any exceptions. There are a number of special exceptions to it: Firstly, ‘equality before the law’ does not imply that the powers that are given to the public authorities will be the same as the powers given to the private citizens of the nation. To explain this better, we know that, a cop has the ability to arrest while, generally, no private individual possesses this power. This isn’t the infringement of the rule of law. In any case, the rule of law requires that these forces ought to be unmistakably characterized by the law and the maltreatment of power by public officials must be punished by common courts in a similar way as unlawful acts committed by private people.

Furthermore, the rule of law does not stop certain classes of people being liable to extraordinary rules. Along these lines, individuals from the military are constrained by military laws. Likewise, medical professionals are exposed to the guidelines confined by the Medical Council of India, a statutory body, and the jurisdiction of ordinary courts does not apply to them. The President of India and the State Governors are afforded immunity under Article 361 of the Indian Constitution. Article 361 gives that the President or the Governors of the State will not be liable to any Court for the activity and execution of the powers and obligations of the office. No criminal proceeding will be founded or proceeded against the President or the Governor of a State in any Court during his term of office. No procedure for the capture or detainment of the President or the Governor of State will be issued from any Court during his term of office.

Thirdly, Statutory Bodies in India confer really wide discretionary powers in the name of the ministers and other executive bodies. A minister is giving full autonomy to act like he wants to but with this autonomy, we also see that such power conferred is grossly misused. Today, countless enactments are passed as delegated legislations, i.e., principles, requests or statutory instruments made by ministers and different bodies and not straightforwardly by the Parliament. These standards did not exist in Dicey’s time. 

Fourthly, conduct of certain individuals of the society is administered by unique guidelines which are laid out by their professions i.e., legal counsellors, specialists, medical attendants, individuals from military and police. Such classes of individuals are dealt with uniquely in contrast to common residents.

Underlying Principle

Equality before the law or equal protection of the laws does not mean a similar treatment to everybody. As no two individuals are equal in all regards, a similar treatment to them in each regard would bring about unequal treatment. For instance, a similar treatment in all regards to a youngster as a grown-up, or to a debilitated or physically impaired individual as to a person free of any health problems, or to an affluent individual as to poor, will bring about unequal treatment or treatment which no one will legitimize or endorse.

Consequently, the basic standard of equality isn’t the consistency of treatment to all things considered equal, but instead to give them a similar treatment in those regards where they are comparable and diverse treatment in those regards in which they are not alike. Basically, it is expressed: Equals are to be dealt with in a similar manner while unequals must be dealt with in a different way. For real-life application of the principle of equality, all things considered, we should, consequently, discriminate between the individuals who are equivalent and the individuals who are not similar.

The aforementioned demarcation is known as Reasonable Classification and will be discussed throughout the article. Yet, let us explain that despite the fact that no two individuals are comparable in all regards, they are for the most part comparative in one regard, in particular, they are generally human beings. In this manner as people they require a similar treatment, they should all be treated as people. In the Ancient Indian setting, as much as in Christianity and Islam, regardless of whether we are created from various pieces of the body of that first individual or God, we are for the most part God’s children. It is in this aspect that we are all deemed as equals.

In this way, as we have noted all-around quickly and will note in a detailed and a more comprehensive manner below, particularly under Articles 15 and 16 of the Constitution of India, the meaning of equality is not just restricted to prohibiting unequal treatment but also requires equal treatment. A prerequisite obligation for the state is to treat people unequally but in addition to that the state must also come up with steps to eradicate the existing inequalities in the system especially the inequalities which demarcate human beings within a superset of human beings.

This article does ensure equal protection of laws but that does not imply that all laws must be general in character. It doesn’t imply that similar laws ought to apply to all people. It doesn’t imply that each law must have all-inclusive application for, all people are not, ordinarily, similarly situated. The fluctuating needs of various classes of people regularly require separate treatment. From the very idea of society, there ought to be various laws in various places and the Legislature controls the strategy and orders laws to the greatest advantage of the wellbeing and security of the State. Indeed, indistinguishable treatment in inconsistent conditions would add up to be called inequality. 

In this manner, what Article 14 precludes is class-legislation however it doesn’t prohibit reasonable classification. The classification, under all circumstances, must not be “discretionary or fake or shifty” however should be founded on some genuine and significant qualification bearing a fair and reasonable connection to the objective looked to be accomplished by the legislation. Article 14 applies where people who are equal are dealt with contrastingly on no reasonable grounds. In a situation where equals and unequals are treated differently, Article 14 does not come into the picture. Class legislation is what makes an inappropriate segregation by giving specific benefits upon a class of people discretionarily chosen from countless people, each one of whom remains in a similar connection to the benefit conceded.

Legislative Classification

Article 14 of the Constitution of India which talks about the Right to Equality which has been discussed at length in the above article requires laws to be made in order to become operative and effective and to achieve the end goal which is to treat equals equally and unequals unequally. The guidelines of equality, we have noted, does not imply that each law must have all-inclusive application to all people who not essentially, accomplishment wise or conditions wise are similarly situated. The fluctuating needs of various classes of people require diverse treatment. Truth be told, the welfare of the public necessitates that people, property and occupations be characterized and be exposed to various appropriate and fitting legislation. Governance is anything but a basic exercise. It experiences and manages the issues which originate from people in a limitless assortment of relations. Characterization and classification is the acknowledgement of these relations and, in making it, the council must have a wide scope of prudence and judgment. Our statutory law is brimming with cases of unique legislation applying just to a specific class or gatherings. Legal counselors, medical specialists, money-lenders, landowners, automobile drivers, insurance agencies, minors and, without a doubt, most different classes are liable to extraordinary legislation. Such order without a doubt separates between people having a place with one class and the others, however that itself does not make the legislation offensive to Article 14. 

Test of Valid Classification

A legislative classification to be substantial must be sensible. It should consistently settle upon some genuine and significant qualification bearing a sensible connection to the requirements or reason in regard to which the classification is made. While Article 14 restricts class legislation, it doesn’t preclude sensible classification of people. However, the classification must not be “discretionary, counterfeit or sly“. It should consistently settle upon some genuine and generous refinement bearing a fair and sensible connection to the article looked to be accomplished by the lawmaking body. Classification to be sensible must satisfy the following two conditions:

• The classification must be established on a clear differentia which recognizes people or things that are assembled from others which are not part of the group; and
• The differentiate must have a balanced connection to the article looked to be accomplished by the Act.

The differentia which is the premise of the classification and the object of the Act are two particular things. What is important is that there must be a nexus between the premise of classification and the object of the Act which makes the classification. It is just when there is no sensible reason for a classification that legislation making such classification might be proclaimed oppressive. In this manner, the Legislature may fix the age at which people will be considered skillful to contract between themselves however nobody will guarantee that competency. No agreement can be made to rely on the stature or shade of the hair. Such a classification will be subjective. 

A substantial classification does not require numerical calculation and impeccable equity. Nor does it require the identification of treatment. In the event that there is comparability or consistency within a group, the law won’t be denounced as biased, if because of some serendipitous conditions emerging out of a specific circumstance, some people incorporated into a class gets a bit of leeway over others, and as long as they are not singled out for unique treatment. In this manner, the law does not allow a person to appeal who has not deposited the tax that he is supposed to clear. The person is also not able to convey to the judge that in case he clears the dues(which will obviously be by arranging a hefty sum of money) he will face a major financial crunch. This does not result in the creation of two distinct classes whose main object is to treat them differently.

If we talk about the primary purpose of demarcation of the individuals into different groups, it must be noted that the purpose cannot be random or arbitrary. 

The Supreme Court in various cases has built up certain significant standards which further explain the extent of permissible segregation. These might be expressed as underneath:

1. A law might be sacred despite the fact that it identifies with a solitary individual if, because of some uncommon conditions, or reasons pertinent to him and not appropriate to other people, that solitary individual might be treated as a class without anyone else. In any case, such laws are seen with doubt, particularly when they influence private privileges of a person.
2. There is consistently an assumption for the legality of sanctioning, and the weight has arrived on the shoulders of who assaults it to demonstrate that there has been an unmistakable transgression of the established standards. The individual, in this manner, who argues that Article 14 has been abused, must make out that not just he has been dealt with uniquely in contrast to other people, yet he has additionally been dealt with uniquely in contrast to people likewise circumstanced with no sensible premise, and such differential treatment has been outlandishly made. 
3. It must be assumed that the law-making body comprehends and effectively acknowledges the need of its subjects, that its laws are coordinated to issues made manifest by experience, and that its differential treatment depends on sufficient grounds. 
4. The lawmaking body is allowed to perceive the degrees of mischief and may restrict its restriction to those situations where the need is considered to be the clearest. 
5. So as to support the assumption of the constitutionality of the nation , the court may mull over issues of basic information, matters of basic report, the historical backdrop of the occasions and may expect each set of facts which can be imagined existing at the time of lawmaking.
6. While good faith and knowledge of the existing conditions on the part of the legislature are to be presumed, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminatory legislation.
7. For a classification to be considered appropriate, it does not need to be perfect from a scientific angle or be logically sound.
8. The legitimacy of a standard must be made a decision by surveying its general impact and not by grabbing cases which are exceptional in nature. What the court needs to see is: Whether in the wake of thinking about all perspectives, the order is viable or not.
9. The court must look past the apparent characterization and to the motivation behind the law, and apply the test of “unmistakable randomness” with regards to the felt needs of the occasions and societal exigencies.
10. It must be seen that the right to equality does not extend to illegal acts. 
11. The right to equality is available in the grant of favours as well as the imposition of burdens. 

Every one of these arrangements, although valid, should be read in conjunction with the new advancements under Article 14.

Application of Article 14

Having clarified the importance and extent of the privilege of the right to equality epitomized in Article 14, we will see as to how Article 14 has been brought into action in countless cases in the Supreme Court and the High Courts. By using the method of illustration, we have grouped them under different categories for discussion as follows:

Single Person Laws

In Charanjit Lal Chowdhury v. Union of India, the applicant moved towards the Supreme Court for the insurance of his fundamental rights under Articles 14 and 31 against the implementation of the Sholapur Spinning and Weaving Co. (Crisis Provisions) Act, 1950. The applicant was a customary shareholder of the Sholapur Spinning and Weaving Co. Ltd. The organization through its directors had been overseeing and running a cloth mill of a similar name. In 1949, fumble and disregard of the undertakings of the organization prompted the closure of the factory. The activity of the organization preferentially influenced the creation of a fundamental product, aside from causing joblessness and agitation. The Central Government immediately issued a statute which was later supplanted by the previously mentioned Act. The Act put the administration and organization of the advantages of the organization under the control of the designated directors which were appointed by the government. The old directors were expelled and the assets of the organization, including the cloth factory, were given over to the care, of the new administration. The Act likewise pronounced that the shareholders could neither name another executive, nor might they be able to take procedures for the ending up of the organization. The solicitor battled that the reviled Act encroached Article 14, in light of the fact that a solitary organization and its shareholders were exposed to inabilities as opposed to different organizations and their shareholders. The Supreme Court expelled the request and held the enactment substantial. It set out that a law might be established despite the fact that it applies to a solitary individual if, because of some uncommon conditions or reasons pertinent to him and not appropriate to other people, that solitary individual might be treated as a class without anyone else and that except if it was demonstrated that there were organizations comparably circumstanced, the enactment could be ventured to be protected. The Sholapur Company shaped a class within itself without anyone else on the grounds of mismanagement of the organization’s issues. 

Classification Without a Difference

There are cases where laws have been held violative of Article 14 in light of the fact that either there was the classification of people without any difference or the premise of characterization was insignificant to the motivations behind the Act. Suraj Mall Mohta and Co. v. A.V. Vishvanath Sastri is an endeavour to isolate people who had no extraordinary properties when contrasted with others similarly situated. In 1947, the Central Legislature passed an Act-the Taxation of Income Act-the object of which, as expressed in its Preamble, was to determine whether the genuine episodes of tax assessment of pay as of late had been as per the arrangements of law, and whether the method for appraisal and recuperation was sufficient to avert its avoidance. Section 5(1) of the Act enabled the Central Government to allude to the Commission anytime before the first day of September 1948 for examination and report any case or points of a situation where the Central Government had evidence that an individual had considerably avoided the tax which was imposed on his salary. Section 5(4), in regards to which the debate of constitutionality was going on, provided as follows:

In the event that over the span of examination concerning any case alluded under sub-section (1), the Commission has reason to believe-

That some individual other than the individual whose case is being explored has sidestepped installment of tax collection in which case, the Central Government will, despite anything contained in sub-section(1), forthwith allude to the Commission for examination.

It was said that Section 5(4) of the Act was hostile to the assurance of equal protection of the laws under Article 14. The court originally called attention to Section 5(4) saying that it was not really constrained to benefits made within a specific period, and it brought inside its range all people whether dealers, specialists, individuals doing professional service, whatever they may be, who had whenever evaded tax on income for whatever reason. The section managed a similar class of people who fell within the ambit of Section 34, Income Tax Act, 1922 and were managed under sub-section (1) of that section and whose genuine income could be interpreted by proceedings under that section. Assessees who had failed to reveal completely, all material facts essential for the appraisal under Section 34, could be compared with people who were found over the span of their examination led under Section 5(1) of the Act of 1947, to have evaded installment of tax on their incomes. The outcome would be that at the decision of the Commission, a portion of those dodgers could be managed under the arrangements of Section 34 of 1947, however, they could likewise be continued with under the arrangements of Section 34, Income Tax Act, 1922. It was impractical, as the court called attention to the fact that, to hold that such people who had avoided installment of income tax and did not really reveal all points of interest or material facts fundamental for the evaluation and against whom a report was made under sub-section (4) of Section 5 of the criticized Act without anyone else’s input framed a class particular from the individuals who sidestepped installment of income tax and came under Section 34 of the Act.

Special Courts and Procedural Inequality

In various cases, the lawfulness of enactment setting up, or approving the executive to set up, Special Courts applying an uncommon procedure for trial of criminal offenses has been opposed. The first among them is State of W. B. v. Anwar Ali Sarkar. Under this case law, the Supreme Court by a majority rule refuted Section 5(1), West Bengal Special Courts Act, 1950 on the grounds that it gave discretionary powers to the government to group offenses or classes of offenses or classes of cases or cases at its pleasure, without setting out any arrangement or rules for the activity of discretion by the legislature in grouping offenses or cases. Reference in the Preamble to the requirement for “speedier trial of offenses“, was observed to be excessively dubious, questionable and elusive to afford a basis of rational classification. Somewhat later, the same Bench of the court in Kathi Raning Rawat v. Province of Saurashtra, upheld Section 11, Saurashtra State Public Safety Measures (Third Amendment) Ordinance, 1949, which likewise approved trial in Special Courts of offenses, classes of offenses, cases and classes of cases which the State Government coordinated to be taken up by the special courts established under the statute. The majority held that the Preamble to the mandate which alluded to the need to give the public safety and wellbeing, maintenance of public mandate and the protection of harmony and peacefulness in the State of Saurashtra together with the oath documented by the State Government, clarifying the conditions under which the reviled request was passed, managed a reason for differentiating this case from the Anwar Ali Sarkar Case since unmistakably the legislature had adequate direction for grouping offenses, classes of offenses or classes of cases for being tried by the special procedure. In this manner, as per the dominant part, Section 11 of the law to the extent that it approved the State Government to coordinate offenses, classes of offenses or classes of cases to be tried by the Special Court was not violative of Article 14.

Procedural Fairness

Aside from the general rule that procedural segregation contravenes Article 14, the courts have likewise developed some broad standards of fair procedure from Article 14. In Erusian Equipment and Chemicals Ltd. v. State of W.B., the Supreme Court suppressed the request for boycotting the applicant whose name showed up on the approved list of D.G.S. and D without giving any notice, as it had the impact of denying an individual of equality of opportunity when it came to public contracts. The Chief Justice underlined that the facts confirm that a native has no option to go into an agreement with the government, however,H he is qualified for equivalent treatment with others offering quotation. The activities of the legislature have a public element and, along these lines, reasonableness and fairness must be seen in their activity.

Administrative Discretion

As has been noted in the extensive discussion on extraordinary courts and the special procedure that they follow, an enactment may either itself make a characterization for its application or non-application, or may leave the order to be made by the official incharge. Enactment generally pursues the latter course. In deciding the topic of legitimacy of such an enactment, the court will analyze and find out if the enactment has set out any rule or approach for the direction of activity of discretion by the official, or for the administration in the matter of determination or characterization. The court will strike down the enactment on the off chance that it doesn’t set out any rule or approach for the direction of exercise of discretion by the executive, or for the organization in the matter of classification or grouping. The explanation behind illegality is that the enactment gives discretionary and uncontrolled capacity to the authority which would empower it to separate between people or things that are similarly arranged. Discrimination at the end of the day is inborn in the enactment itself. It is, in any case, futile that the enactment should explicitly set out the standards, strategies or definite guidelines for the direction of the assigned authority which is to practice the discretion. In the landmark case Jyoti Pershad v. U T, Delhi, it was held that:

Such guidance may thus be obtained from or afforded by: 

1. The preamble read in conjunction with the circumventing circumstances which made the legislation necessary in the first place, again taken in conjunction with well-renowned facts of which the Court might take judicial notice or of which it is appraised by evidence before it in the form of affidavits.
2. Indeed, even from the policy and reason for the legislation which might be assembled from other employable provisions relevant to comparable situations or generally from the object sought to be achieved by the enactment.

Basis of Classification

The characterization on which statutory provision might be established might be referable to various contemplations. A characterization, for instance, may appropriately be made on topographical or regional premise if that is germane to the reasons for enactment. Along these lines, a tenancy law might be important just for a part of the State in light of the fact that the conditions of inhabitants vary from region to region, and, in that capacity, occupants in different territories may not challenge the legitimacy of the law. Legitimate grouping may likewise be made between the tenancy of residential and commercial premises. Likewise, a provision isn’t violative of Article 14 on the off chance that it forces a capitation fee on the non-resident students of a State and exempts the students having a domicile from the installment thereof, in light of the fact that the State needs to contribute for the upkeep and running of its educational organizations. In the matter of recovery of land revenue, various States have recommended distinctive machinery, methodology and punishment. Area 46(2) of the Income Tax Act, 1922 approved the Collectors in various States to employ the State methodology for recovery of land income and the recovery of back payments of tax on the income. The legitimacy of this section was assaulted on the ground that in approving the utilization of various machinery in various States, the defaulters were not treated similarly in various States. The court held that:

1. Each state had the right to employ a piece of machinery that suited it in order to recover its own public demand.
2. A person belonging to one state does not have to right to complain that the law prevalent in the state where he lives is more rigorous than the law of the neighbouring states. 

The reason for the aforementioned order was really sensible, the people belonging to one state were not similarly situated as the people belonging to the other states. The legislature of the states thought that, because they weren’t similarly situated, their needs were not the same as people who were based in other states. Moreover, along the same lines, Section 46(2), Income Tax Act, 1922 was held to not be invalid if it grouped the defaulters State-wise, and proceeded with the same method for recovery of its demands which were existing in the State for the recovery of land revenue. In the landmark ruling State of M.P. v. G.C. Mandawar, it was held that a law cannot be called invalid on the ground of it being different from the law in a different state. It was held that territory, is not always a sure shot correct method of classification.

Tax Laws and Equality

The power of the State to group for reasons for tax assessment is of wide range and adaptability. The ability to force and collect taxes is viewed as one of the most significant sovereign power and capacity of the State. It might choose the people or the articles to be taxed. A resolution isn’t available to be attacked on the ground that it imposes a few people or items to be burdened with tax. In V.M Syed Mohammad and Co. v. State of Andhra, the Supreme Court maintained a law that connected sales tax to hides and not to other products. In Khyerbari Tea Co. Ltd. v. State of Assam, the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961 was assaulted inter alia on the ground that the Act had singled out just tea and jute as objects of tax assessment. The Supreme Court disproved the contention and stated, “The lawmaking body that is able to levy a tax should unavoidably be given full opportunity to figure out which articles ought to be burdened, in what way and at what rate.” It would be idle to battle that the State may impose a tax on everything so as to tax something. In tax assessment matters, the State is permitted to pick and choose districts, objects, people, strategies, and even rates of tax collection on the off chance that it does all these things sensibly. A classification for purposes of tax collection or fixing of lease among private and municipal structures does not violate the provisions of Article 14. Various rates of taxation on stage carriage and goods carrier just as on tourist buses and different vehicles have additionally been upheld. Also, dynamic graduation of income tax applying to groups having different incomes is not discriminatory in nature, in light of the fact that the governing body is capable to group people into various classifications and tax them in the way that they like. A sales tax on Virginia tobacco however not on country tobacco has been upheld.

Expanding Horizons of Equality

Since the mid-1970s, equality in Article 14 has gained new and significant dimensions. Up to that point, as we have noted in the above paragraphs, the necessities of Article 14 were met if a law or authoritative activity fulfilled the reasonable classification test. In the latter half of 1973, in any case, In E.P. Royappa v. State of Tamil Nadu, the Supreme Court has floated from the conventional idea of equality which depended on reasonable classification and has set out another idea of equality. It was held that “Equality is a dynamic idea with numerous perspectives and measurements and it can’t be ‘cribbed, cabined and bound’ inside conventional and dogmatic cutoff points.” From a positivist perspective, equality is an absolute opposite to arbitrariness. Actually, equality and arbitrariness are sworn enemies: one has a place with the rule of law in a republic while the other, to the whim and caprice of a monarch. Where a statute is arbitrary, it is verifiable that it is inconsistent both as per political rationale and constitutional law and is along these lines violative of Article 14.

The basic guideline is that Article 14 denies class legislation however allows reasonable classification, the classification being established on an intelligible differentia which recognizes people or things that are grouped together from those that are let well enough alone and that the differentia must have a rational nexus to the item looked to be accomplished by the resolution being referred to. The general public is comprised of unequals and a welfare State needs to strive by both executive and authoritative activity to help the less fortunate and to improve their condition with the goal that social and monetary imbalance in the general public might be bridged. This would require a law to be made applicable to that gathering so as to improve their condition. So as to meet that situation the court had developed the rule of classification. The principle of classification was advanced to continue a legislation of State activity so as to help more fragile areas of the general public or whatever portions of the general public requiring aid. The State, in this way, must intimate to the court that the twin tests have been satisfied. Applying this test, the court held that the beneficiaries shaped a class and the classification between them based on a specific date, viz., those retiring before they were qualified for liberalised rates of pension and those retiring after that date, did not depend on any rational rule nor identified with the object that was to help the retired government workers. 

Doctrine of Legitimate Expectation

The doctrine of legitimate expectation in the substantive sense has been acknowledged as a component of our law and that the chief can ordinarily be constrained to offer impact to his representation with respect to the expectation dependent on past training or past conduct except if some abrogating public interest comes in the way. The doctrine necessitates that dependence probably should have been put on the said representation and the representee must have in this manner endured a disadvantage. Subsequently, the more significant viewpoint is whether the chief can support the change in approach by returning to Wednesbury standards of reasonability or whether the court can go into the inquiry whether the leader has appropriately balanced the legitimate expectation as against the requirement for change? In the latter case, the court would clearly have the option to go into the proportionality of the adjustment in the policy. The Wednesbury sensibility test might be connected to see if the change starting with one arrangement then onto the next was justified. The court isn’t to pass judgment on the value of the chief’s strategy. The public authority being referred to is the judge of the issue in the case of “superseding public interest” legitimizes such an adjustment in policy. Be that as it may, the difference in approach like any optional choice by a public authority must not violate the Wednesbury standards. While the policy is the approach of the maker alone, the court’s concern is to see whether there has been equity in his decision.

Article 15 of the Constitution of India

Clause(1)

By clause(1) of Article 15, the State is precluded to segregate between citizens on grounds just of religion, race, caste, sex, place of birth or any of them. The word ‘discrimination’ signifies to make an unfriendly demarcation or to recognize the less fortunate from others. On the off chance that a law makes segregation on any of the above grounds, it tends to be proclaimed invalid. The word ‘just’ used in Article 15(1) shows that separation can’t be made simply on the ground that one is from a particular caste, or is of a particular sex, and so forth. At the end of the day, if the capabilities are equivalent, caste, religion, sex, and so forth ought not be a ground for inclination or dismissal. It stems from this that separation on grounds other than religion, race, caste, sex or place of birth isn’t denied. It implies that a segregation dependent on any of these grounds and furthermore on different grounds isn’t hit by Article 15(1).

Clause(2)

Article 15(2) talks of a particular use of the general restriction contained in Article 15(1). Article 15(2) pronounces that no citizen will be exposed to any disability, limitation or condition on grounds only of religion, race, caste, place of birth or any of them concerning (a) entrance to shops, public eateries, lodgings and places of leisure, or 

(b) the utilization of wells, tanks, showers, streets, and places of public hotel, kept up completely or halfway out of State assets or dedicated for the utilization of the overall population. A ‘place of public hotel’ signifies places which are frequented by the general public like an open park, a public street, public transport, ship, open urinal or railway, a medical clinic, and so on.

It is to be noticed that while clause (1) of Article 15 disallows discrimination by the State, provision (2) restricts both the State and private people from making any discrimination. The object of Article 15(2) is to kill the maltreatment of the Hindu Social System and to proclaim a unified country. The Madras Removal of Civil Disabilities Act rebuffs social disabilities. No law, custom or use could approve any individual to avoid any Harijans, discouraged classes or the like from approaching the public places referenced in the Act.

Clause (3)

Article 15(3) is one of the two exemptions to the general principle set down in clauses (1) and (2) of Article 15. It says that nothing in Article 15 will keep the State from making any extraordinary arrangements for ladies and children. Ladies and children require exceptional treatment by virtue of their very nature. Article 15(3) engages the State to make exceptional arrangements for them. The reason is that ladies’ physical structure and the role of maternal capacities place her off guard in the battle for subsistence and her physical prosperity turns into an object of public interest and care so as to safeguard the strength and vigour of the race. Along these lines, under Article 42 of the Constitution of India, women workers can be given exceptional maternity alleviation and a law with this impact won’t encroach Article 15(1). Furthermore, it would not be an infringement of Article 15 if institutional organizations are built up by the State only for ladies. The reservation of seats for ladies in a school does not go against Article 15(1).

In Yusuf Abdul Aziz v. State of Bombay, Section 497 of Indian Penal Code which only punishes a man for infidelity and exempts the lady from culpability despite the fact that she might be equally blameworthy as an abettor was held to be valid since the classification did not depend on the ground of sex alone. Comparative arrangements apply to children. The provision of free training for children or measure for avoidance of their exploitation would likewise not come within the purview of Article 15(1). It has, in any case, been held that Article 15(3) accommodates just extraordinary arrangements for the advantages of ladies and children and does not necessitate that totally indistinguishable treatment as those appreciated by males in comparative issues must be accrued to them.

Quantum and Impact of Reservation

Article 15(4) is another special case which is an exception to provisions (1) and (2) of Article 15, which was included by the Constitution (First Amendment) Act, 1951, because of the judgment in State of Madras v. Champakam Dorairajan. The arrangement made in clause (4) of Article 15 is just an empowering arrangement and does not force any commitment on the State to take any specific action under it. A writ can’t be issued to the State to make reservation. The standard behind this specific provision of Article 15 is that a particular treatment can be given legitimately where socially and educationally backward classes require it. Article 15(4) isn’t an exemption however just makes a unique implementation of the standard of reasonable characterization. The class examined under the provision must be both socially and educationally backward.

Thus, under clause 15(4), two things are to be determined:

• Socially and educationally backward classes;
• The limit of reservation.

Backward Classes

The term ‘Backward Classes’ does not have a definition in the Constitution but by virtue of Article 340, the President is empowered to appoint a Commission to investigate the conditions of socially and educationally backward classes. Based on the discoveries of the report of the Commission, the President may indicate with respect to who is to be considered as Backward Classes.

Special Provisions for Women and Children and SC ST and Backward Classes

Article 14 of Indian constitution law says that all are equivalent according to law. It’s not possible for anyone to shield the state from making any exceptional developments for ladies and young children. For instance, unique seating plan for women in vehicles, trains, metro trains isn’t unlawful. 

According to Section 497 of Indian Penal Code, Adultery is considered as an offense when it is done by men, and not considered an offense when it is done by women. Clearly, it makes exceptional provision for women which is significant under Article 15(3). In Choki v. State of Rajasthan, the Court held that it considerable on the grounds to make unprecedented arrangement for women and as such, it is verified under this Article.

 Article 15(4) has been embedded by the Constitution ( First Amendment ) Act, 1951. This amendment has been changed in the preeminent court case State of Madras v. Champakam Dorairajan. For this situation, the booking of seats for admission to state medicinal and building universities was made on the ground of caste and religion. The court said that it was unconstitutional on the ground that it depended on a communal issue. State has made numerous uncommon arrangement for the more fragile segments, for example, ST,SC and instructively and socially in reverse classes of natives of India. Meaning of ” Scheduled caste” signifies such castes, race, or tribes or parts of or bunches inside Such castes, races or tribes as are esteemed under article 341 to be scheduled castes for the motivations behind this Constitution. Article 341(1) gives extra security to the individuals from the scheduled castes having respect to the social, affordable, instructive, backwardness from which they endure in light of their caste.

New Concept of Equality for the Protection of People of India

Because of the Air India v. Nargesh Meerza case, the guidelines give that an air Hostess will leave the organization in the wake of achieving the age of 35 years or on marriage within 4 years of Service or on first pregnancy, whichever happens earlier. It was held by the court that the ground of pregnancy was absurd and self-decisive, it was the encroachment of Article 14 under the Constitutional Law of India. The guideline did not restrict marriage following four years and if an air hostess in the wake of having fulfilled the condition ended up being pregnant, there was no ground why first pregnancy ought to hinder her work.

Article 16

Article 16(1) guarantees equality of opportunity for all citizens in matters of ‘employment’ or ‘appointment’ to any post under the State.

Clause (2) says that no citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for or discriminated against in respect of, any employment or office under the State. Clauses (1) and (2) of Article 16 lay down the general rule of equality of opportunity or appointment under the State and that no citizen can be discriminated against or be ineligible for any employment or office under the State on grounds only of religion, race, caste, sex, descent, place of birth or residence. Article 16 (1) and (2) applies only in respect of employment or office under the State. Clauses (3), (4), (4-A), (4-B) and (5) of Article 16 provides four exceptions to this general rule of equality of opportunity.

Article 16(3) provides:

Nothing in this Article shall prevent Parliament from making any law prescribing, in regard to a class or classes of employment or appointment to any office under the Government of, or any local or other authority within, a State or Union territory, any requirements as to residence as to residence within that State or Union territory prior to such employment or appointment.

Article 16(4) enables the State to make provision for the reservation of posts in government jobs in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services of the State.

Prescription of Qualifications and Selective Tests

Article 16 ensures equality of opportunity in issues of selection in State services. However, this does not keep the State from recommending the threshold for enrollment for Government administrations. The capabilities other than mental abilities, incorporate physical wellness, discipline, moral integrity and loyalty to the State. Where the arrangement requires a knowledge threshold, specialized requirements might be asked for.

The specific test, be that as it may, must not be subjective. It must be founded on sensible ground and have a nexus between the qualifications and the object that is, post or the very essence of the governmental service.

Article 17

Article 17 places a total ban on “untouchability” and forbids its practice in any manner whatsoever. If by virtue of untouchability, any disability arises, it will be an offence which will be punishable under law. It doesn’t stop with a simple assertion yet declares this prohibited ‘unapproachability’ isn’t to be consequently practised in any manner. On the off chance that it is so practised, it will be managed as an offense culpable as per the law. 

‘Untouchability’ is neither characterized in the Constitution nor the Act. The Mysore High Court has, notwithstanding, held that the term isn’t to be comprehended in its exact sense yet to be comprehended as the ‘practice as it had grown verifiably’ in this nation. Comprehended in this sense, it is a result of the Hindu caste framework as indicated by which specific segment among the Hindus had been looked down upon as untouchables by different segments of the general public. An exact development of the term would incorporate people who are treated as untouchables either briefly or generally for different reasons. In either case, such people can claim the security or advantage both of Article 17 or the 1955 Act.

It ought to be noted that Article 15(2) likewise helps in the annihilation of untouchability. Along these lines on grounds of untouchability, no individual can be denied access to shops, public eateries, lodgings and spots of amusement or the utilization of wells, tanks, washing ghats, streets and places of public hotel kept up completely or somewhat out of State assets or committed to the utilization of general population.

In State of Karnataka v. Appa Balu Ingale, the respondents were tried after the offenses under Sections 4 and 7 of the Protection of Civil Rights Act, 1955 and were condemned to undergo basic detainment for one month and a fine of Rs. 100 each. The charge against the respondents was that they limited the complainant party by show of power from taking water from a recently uncovered borewell on the ground that they were untouchables. The High Court absolved them. The Supreme Court maintained the conviction. The Court held that the object of Article 17 and the Act is to free the general public from visually impaired and ceremonial adherence and customary conviction which has lost all legitimate or typical base. It tries to set up new thoughts for society-equity to the Dalits at par with the overall population, absence of limitations or restrictions on grounds of caste or religion.

Article 18

Article 18 discusses the topic of Abolition of Titles. It precludes the State to give titles to anyone whether a citizen or a non-citizen. Military and scholarly refinements are, in any case, excluded from the preclusion for they are the motivating force to advance endeavors in the flawlessness of the military power of the State so important for its existence.

Clause(2) prohibits a citizen of India from accepting any title from any foreign State. 

Clause(3) provides that a foreigner holding any office of profit or trust under the State cannot accept any title from any foreign State without the consent of the President. This is to ensure loyalty to the Government he serves for the time being and to shut out all foreign influence in Government affairs or administration. 

Clause(4) provides that no person holding any office of profit or trust under the State shall accept, without the consent of the President any present, emolument or office of any kind from or under any foreign State.

The conferment of titles of “Bharat Ratna“, “Padma Vibhushan“, “Padma Shri”, and so on are not precluded under Article 18 as they simply indicate State acknowledgment of good work by natives in the different fields of life. These honors appear to fit inside the class of ” scholastic qualifications“. These national honors are given on the Republic Day in acknowledgment of exceptional and recognized administrations of high respectability in any field.

These National Awards were officially started in January 1954 by two Presidential Notifications. The Presidential Notifications likewise give that any individual without distinction of race, occupation, position or sex, will be qualified for these honors and furthermore that these awards might be granted after death. It was additionally clarified that these civilian honors can’t be utilized as titles and ought not to be connected as postfixes or prefixes to the name of the honors. In 1977 these honors were stopped however were again restored in 1980. From that point onward, the National Awards are presented every year on the Republic Day.

In Balaji Raghavan v. Union of India, the candidates questioned the legitimacy of these National Awards and mentioned the Court to keep the Government of India from presenting the Awards. It was battled that the National Awards are titles within the purview of Article 18 of the Constitution. It was additionally contended that these honors are as a rule horribly abused and the reason for which they were founded has been weakened and they are conceded to individuals who do not deserve them. 

The Supreme Court held that the National Awards, for example, Bharat Ratna, Padma Bhushan and the Padma Shri are not violative of the rule of uniformity as ensured by the provisions of the Constitution. The National Awards don’t add up to “titles” within the purview of Article 18 and, in this manner, not violative of Article 18 of the Constitution. Article 51-A of the Constitution talks about the major obligations of each native of India. In perspective of proviso (f) of Article 51-A, it is fundamental that there ought to be an arrangement of honor and enrichments to recognize excellence.

Be that as it may, the Court condemned the Government for its “disappointment” to practice adequate limitation in the issuance of these National Awards. The Court said that the rules contained in the communique from the Ministry of Home Affairs towards the choice of plausible beneficiaries are very wide, uncertain, agreeable to abuse and entirely unsatisfactory for the significant target that they try to accomplish.

Justice Kuldip Singh in his separate but concurring judgment make a scathing attack in, what he called non-application of mind by successive governments in granting the “Padma Awards”. It has already reached a point where political or narrow group interests are being rewarded by those in office for the time being.

The Court proposed that a high-level advisory group might be appointed by the Prime Minister in meeting with the President of India to investigate the issue. The Judges clarified that the panel may keep in view Court’s uneasiness that the number of honors ought not to be so huge as to weaken their worth. It is to be noticed that there is no punishment recommended for the encroachment of the above restrictions. It is open to Parliament to make a law for managing such people who acknowledge a title disregarding the disallowance recommended in Article 18. No such law has been passed by Parliament up until this point.

Designation of Senior Advocate

In Indira Jaising v. Supreme Court of India, with respect to the designation of ” Senior Advocate“, the Supreme Court held that it was merely an acknowledgment and barely a title. Section 16 of the Advocates Act sets out a parameter to be passed for such designation. Exercise of the powers by the Supreme Court and the High Courts to assign as Senior Advocates is outlined by necessity of the satisfaction that the concerned Advocate satisfies the conditions stipulated under Section 16 of the Advocates Act, 1961.

Putting together everything, Right to Equality is not as simple a concept it is perceived to be. The aforementioned postulates clearly depict that.

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

Are you interested in Securities Appellate Tribunal (SAT) Litigation? I suppose you are interested in acquiring securities law skills, develop a strategic understanding of mechanisms and regulations of the stock market, IPOs and listing, role and functions of SEBI, and enforcement of securities regulations. Perhaps, you are interested in becoming a hot-shot securities lawyer, or perhaps your interest lies in securities law as an executive working in one of the stakeholders of market intermediaries.

Our primary focus, however, is on the practical aspects of securities law litigation. This is a prominent area of law practice, but very niche and extremely rewarding. We have been in the process of creating a cutting edge training program for securities lawyers, and what we discovered while working towards the same with lawyers who actually practice this craft, was simply mind-blowing.

Why is securities law an attractive area to practice in? Why should you develop expertise in securities law and invest time and effort in learning its intricacies? Is it worth the time?

There are 33 million stock market investors in India. There are 2.78 crore SIP (systematic investment plan) accounts through which Indians are investing in the stock market on a regular basis. In July 2019 alone, Rs. 8,324 crores were pumped into the market through these SIP accounts. 

There are 44 registered asset management companies offering over 2000 registered mutual fund schemes. The asset under management (AUM) of Indian mutual fund industry has grown from 7.22 trillion Indian rupees to 24.54 trillion rupees in last 10 years. That is a 3 and a half fold increase in just 10 years.

According to July 2019 data from Hindu Businessline, around 89 companies had either received clearance for IPO or are waiting for such approval. 

Foreign Portfolio/Institutional Investors (FPI/FII) have been one of the biggest drivers of India’s financial markets and have invested around Rs 12.51 trillion (US$ 171.81 billion) in India between FY02-18. 

Domestic Institutional Investors have pumped in 10,785 crores in net purchase into Indian stock markets in the month of August so far, as of 14th August, despite a structural slow down in the Indian economy. This is a sign of investor faith in long term growth story of Indian economy and strength of Indian stock markets.

It is not just equity investments, but also debt capital market as well as derivatives and commodity segments that have done extremely well in India. 

The underlying strength of the market and the growing volumes suggest that there will be a growing need for lawyers who understand the capital markets and SEBI regulations. We are looking at an amazing long term opportunity for those who wish to work in capital markets and especially securities litigations, provided you develop the right skills.

Please note that there are ups and downs in the stock market and the economy, which can temporarily impact the jobs of capital market and securities lawyers. For example, if the number of IPOs happening go down significantly due to a market slow down, filing of new DRHPs may stop, reducing work for the lawyers.

However, during such times litigation and action from regulator can see a spike, which more than compensates for slow down in IPOs. 

Also, let us be honest. Filing one DRHP after another can be quite tiresome. That is where learning litigation and dispute work related to SEBI and securities can be such a blessing.

Who could be your clients if you become a securities lawyer?

If you were a securities lawyer, who could be your clients? Let’s share some random examples:

• SMEs doing an IPO in the SME market
• Institutional buyers, a company trying to get listed, stock exchanges
• Asset management companies
• Foreign institutional investors and portfolio investors
• Victims of securities fraud, mis-selling or misrepresentation by brokers and investment advisors
• Shareholders contemplating class action against a company
• SEBI when in need of specialized advice
• Directors and promoters accused of insider trading or other offences under SEBI regulations
• Merchant bankers, investment banks 
• Large stock brokers and other intermediaries requiring compliance, advisory or litigation support

Pros and cons of practicing securities law

Securities law and SAT is a golden niche for commercial litigators. Unlike other tribunals, such as NCLT and DRT, SAT does not have as many lawyers practicing. Being a less crowded field which is rapidly growing in terms of opportunity, it is easier to get it right in a platform like this provided you bring the right kind of knowledge and skills on the table. 

And if we are talking about competition, there is no field in law where you won’t face any competition. While there are fewer lawyers in this area, the quality of lawyers is also much higher. The only way to beat the competition is to be well prepared. It is not possible to do well in this quite technical area without being competent. Given the high stakes and sophisticated clientele, if you do not have the skills necessary to deliver results, you may not survive in this market for long. However, the rewards definitely justify the efforts you will have to put in.

In SAT matters, usually hefty sums of money will be in question, so you get the opportunity of charging a very good sum of money as well as the opportunity to make an overnight name for yourself by delivering excellence. Once you begin to get favourable orders, you would not struggle to find clients.

Another good thing about SAT is that it is very future proof. Whatever things that negatively affect conventional areas of practise can’t touch SAT litigators. For instance, economic slowdown. It is something which affects almost every area of law badly, but dispute work increases in economic slowdown. It is also more immune to technological developments such as artificial intelligence which is taking away work of young lawyers in some other areas of practice.

What do you need to learn to be a securities lawyer?

If you want to succeed in securities law, you have to understand the working of stock market and SEBI regulations to its depths. You have to master several concepts with respect to capital markets and regulation.

Here is a list of some of the things you have to learn in order to get started as a securities lawyer: 

• SEBI’s regulations for IPOs, intermediaries, listing of debt securities and other instruments
• Listing Obligations and Disclosure Requirements Regulations
• Delisting Guidelines
• Insider Trading Regulations
• Unfair Trade Practices regulations
• Companies Act requirements pertaining to the listed companies
• Application for Takeover codes
• Drafting a code of fair disclosures, a code of conduct, memorandum of appeal
• SEBI proceeding: notice, response and settlement

Where can you get a job?

• In-house legal teams in listed entities: In-house legal teams  and compliance teams in corporations of listed companies like Oil and Natural Gas Corp. Ltd, Hindustan Petroleum Corporation, HDFC, Reliance, Tata Motors etc hire securities lawyers.
• Large conglomerates: Top conglomerates like TATA group, Reliance, Bharti Enterprises, Adani group, Hinduja need to hire experts in securities law.  
• Law firms: There are many firms, starting from big law firms to securities law boutiques where you can get a job as a securities lawyer.
• Corporate brokers: Stock broking firms with large volumes often hire securities lawyers given that many disputes arise in the course of their day-to-day work.
• Investment banks/Portfolio managers/ Merchant bankers: these are great places for securities lawyers to work in as well.   
• SEBI: The most prestigious organisation SEBI hires grade A officers. Having the knowledge of securities law will give you a competitive edge and make you stand-out in the interview phase. 
• Stock exchanges: You could also get a job in the NSE, BSE, MCX etc. in order to tackle legal issues associated with operations. Stock exchanges are good places for young lawyers to gain knowledge and experience and the pay is also quite good.  

Securities law is not everyone’s cup of tea

Firstly, those from Mumbai have an undue advantage when it comes to securities law because that is where the financial capital of India is, and SEBI as well as SAT is located.  Vast majority of India’s securities lawyers are therefore located in Mumbai, although there is some demand for securities lawyers as in-house experts in other big metros as well.

If you are an in-house lawyer in a listed company, or a company that is going to be listed soon, you are strongly recommended to learn securities law well. It could be a major booster in your career.

However, if you do not practice law in Mumbai or frequently travel to that city and do not wish to work as an in-house lawyer in listed companies, securities law may not be relevant for you.

However, if you are interested in the capital markets, if the stock markets make you excited, if you are interested in boardroom wars and working with India’s biggest conglomerates and companies, on matters that make headlines in the Economic Times, then securities law is very exciting.

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A student of faculty of law, Aligarh Muslim University, Amanat Raza, has written this article. In this article, he discusses the concept of Contempt of Court, its definition, its importance and its criticism. 

Contempt of Court definition

“The term ‘Contempt of Court’ is a generic term descriptive of conduct in relation to particular proceedings in a court of law which tends to undermine that system or to inhibit citizens from availing themselves of it for the settlement of their disputes.”This definition is given by Lord Diplock when he was giving the judgment in the case of Attorney-General v. Times Newspapers Ltd. [1]

This term Contempt of Court can be easily understood as when we are disrespectful or disobedience towards the court of law which means that we wilfully fail to obey the court order or disrespect  the legal authorities. Then the judge has the right to impose sanctions such as fines or can send the contemnor to jail for a certain period of time if he is found guilty of Contempt of Court.

This term can also be understood in terms of the freedom of limits of the judicial proceeding. As we know that all judges in courts can give judicial proceedings which have a certain limit in which it has the freedom to make any judicial proceeding and anything which curtails or stops it in making any judicial proceeding which is of necessity can amount to contempt of court.

Halsbury, Oswald, and Black Odgers have also given the definition of Contempt of Court and in addition to that, they have talked about its misuse and its wrong interpretation and also its broad prospectus.

In India, the concept of Contempt of Court is defined in Section 2(a) of the Contempt of Courts Act, 1971 which has broadly describe it as civil contempt or criminal contempt.

There are two Articles in the Constitution of India which talk about the Contempt of Court and these are Article 129  and Article 142(2) .

Article 129

Article 129 says that the Supreme Court shall be the ‘Court of Record’ and it has all the powers of such courts including the power to punish for contempt of itself.

Now, we should know about the meaning of ‘Court of Record’  to understand why anything commented wrongly against the decision of the courts leads to Contempt of Court.

Here, is the answer to this question. The ‘Court of Record’ means a Court having its acts and proceedings registered for everlasting memory or that memory which has no end and as evidence or proof. The truth of these records cannot be questioned and also these records are treated as a higher authority. And anything stated against the truth of these records comprised Contempt of Court.

Article 142(2)

This article also talks about Contempt of Court. This Article says that when any law is made by the Parliament on the provisions mentioned in clause 1 of this Article, the Supreme Court has all the power to make an order for securing any person’s attendance, production of any documents or has the power to give punishment to anyone for its contempt.

This also does not mean that the Supreme Court can do anything against the right of personal liberty if it has the power to punish for Contempt of Court. We know that it is the guardian of all the rights that we get from the Indian Constitution so it has to safeguard these rights and cannot violate these rights itself.

Origin of Contempt of Court

The legal system that we see today is the summit of the long journey which has started from the divine rule that was in proclamation to the natural law and more further to the positive law that we see today. Contempt of Court is a matter which regards that justice should be administered fairly and it also punishes anyone who aims to hurt the dignity or authority of the judicial tribunals. This law has its origin from the medieval times when the royal powers of the monarch were transferred to the court and at this time the monarch was believed to be appointed by God and everyone was accountable to him. This power of accountability clearly depicts the same accountability the Supreme Court possesses nowadays under Article 129 and 142 of the Indian constitution against its contempt. In the English medieval ages the Judiciary was an important tool of the Monarch. At that time these judges and legislatures were representatives of the divine rule monarchy and these judges and legislatures played an important role in legitimizing the functions of these monarchs. The king was the superior head of justice and this power he has given to the judicial system and if anyone or the king himself disrespect or question the courts it became a challenge to the superiority of the king and as well as to his wisdom. So, this can be seen as although the source of the law has transformed in the society the unquestionability quality that a king enjoyed was upheld by the monarchy. There is a case of contempt against J. Almon in the year 1765; a statement was made by the Irish judge Sir Eardley Wilmot in regard to this contempt attacks on the judges. In this case, Almon has published a pamphlet libelling the decision of the bench of kings and the judgment given by the judge had given rise to many questions of several aspects of the judiciary which had not been questioned yet. This matter gives a great push in the establishment of the contempt of court. This judgement also recognised that the unbiasedness is also one of the features of the judiciary in making the decision which makes this institution different from its peer institutions. 

History of Law of Contempt in India

Sanyal Committee report deals with the historical aspect of the Law of Contempt in India. This committee has been responsible for starting the amendment process in this law. The law of contempt similar to many other laws has been brought from the English laws and statutes but this law has not been absolutely taken from the English laws it has other origins too. How has the indigenous development of contempt law taken place? It can be understood by the age-old system which our country was having to protect court or assemblies (sabhas) in the past. We know about the philosopher Kautilya, in his book Arthashastra has written about the governance at that time. He has written that “Any person who exposes the king or insults his council or make any type of bad attempt on the kings then the tongue of that person should be cut off.” Adding to this statement, he also said that “When a judge threatens, bully or make silence to any of the disputants in the court then he should be punished.”

Until the year 1952, there were no statutory provisions for the contempt of court in India but after the enactment of Contempt of Court Act, 1952 statutory provisions for contempt of court in India has established. This Act extends to the whole of India except Jammu and Kashmir. This Act gives power to the High Court to punish contempt of the subordinate court. This Act has repealed the existing law from the Contempt of Court Act, 1926  that was prevailing in the state of Rajasthan and the state of Saurashtra. Although this Act was extended to the whole of Bangladesh. It can be surprising knowing that although these Acts have been introduced earlier then also these Acts do not give the definition of the term ‘Contempt’ and also there was still a lot of ambiguity present around the law of contempt. This law has to be dealt with in light of two fundamental rights given by our Indian Constitution and these rights are (i) freedom of speech and expression and (ii) right to personal liberty. 

There was a bill introduced in the Lok Sabha to make any changes or to make the existing law relating to contempt more strong. This law was introduced by Shri B B Das Gupta on 1st of April 1960. The government after examining the bill discern the need for reform in the existing Act. So, they made a special committee to look into the matter or inspect the existing Act. This committee was set up in 1961, under the chairmanship of H.N. Sanyal which gives its report on 28th February, 1963. The report of this committee took the form of Contempt of Court Act, 1971. The procedure and application of enactment something that was done earlier by the Contempt of Court Act of 1926 and 1952 was given several changes through the Contempt of Court Act, 1971. This Act segregates the ‘Contempt of Court’ into criminal and civil contempt with their definition respectively. This thing was not mentioned in the earlier existing courts. Now, let us know something about the Contempt of Court Act, 1971.

Contempts of Courts Act 1971 notes

This Act extended to the whole of India and it has also provided that this Act shall not apply to the state of Jammu and Kashmir except in certain conditions in which the provision of the Act is connected to the Contempt of Supreme Court. Another thing is that this Act provides the definition of Contempt of Court which has not been given by the earlier Act of Contempt of Court. This Act under Section 2(a) defines Contempt of Court as ‘Civil Contempt’ and ‘Criminal Contempt’. There is a case of Noorali Babul Thanewala v. K.M.M. Shetty [2] in which an undertaking was given to a Court in civil proceedings by a person, on the faith that undertaking was correct the Court sanctions a course of action in regard to that undertaking but the undertaking seems to be incorrect. Hence, this was considered as misconduct and amount to Contempt of Court. In this act there are several provisions given that it does not amount to Contempt of Court. Although, these provisions have to be discussed later in this article some of them you should know at this point in time. These are: (i) innocent publication of a matter or its distribution does not amount to Contempt of Court. (ii) publishing of fair and accurate reports of the Judicial proceedings does not amount to Contempt of Court. (iii) fair criticism on judicial acts does not amount to Contempt of Court. Next, in this Act, the High Court has been given the power to make decisions on the matter which is outside its jurisdiction. Punishment for Contempt of Court has been given in this Act and also what type of misconduct not amount to Contempt of Court has been given, how we can deal with that contempt has also been given. The Judge, Magistrate or any other person who is acting judicially can also be contempt for their actions. Also, this Act gives certain limitations where this Act does not apply. This Act does not apply to the Courts of Nyaya Panchayat and other Courts of the village. This Act repealed the old existing Act of Contempt of Court which came into force in 1952.

Essentials of Contempt of Court

If a person named Akash has to prove that the other person named Sita is guilty of committing an act which is an offence in a court of law. Then he has to show the court that the offence which Sita has done is fulfilling the essential required to commit that act or not. If the essentials of that will be fulfilled then he will be liable for that act. Similarly, every offence has certain exceptions that has to be fulfilled for making the person liable for doing that act. Contempt of Court also has certain essentials and these are as follows:

1. Disobedience to any type of court proceedings, its orders, judgment, decree, etc should be done ‘willfully’ in case of Civil Contempt.
2. In Criminal Contempt ‘publication’ is the most important thing and this publication can be either spoken or written, or by words, or by signs, or by visible representation.
3. The court should make a ‘valid order’ and this order should be in ‘knowledge’ of the respondent.
4. The action of contemnor should be deliberate and also it should be clearly disregard of the court’s order.

These essentials should be fulfilled while making someone accused of Contempt of Court.

Types of Contempt of Court in India

Depending on the nature of the case in India, Contempt of Court is of two types.

1. Civil Contempt
2. Criminal Contempt

Civil Contempt

Section 2(a) of the Contempt of Court Act, 1971 states Civil Contempt as wilful disobedience to the order, decree, direction, any judgment or writ of the Court by any person or willfully breach of undertakings by a person given to a Court.  Since Civil Contempt deprives a party of the benefit for which the order was made so these are the offences essential of private nature. In other words, a person who is entitled to get the benefit of the court order, this wrong is generally done to this person.

There is a case on the willful disobedience of the court order which a person should know.

Utpal Kumar Das v. Court of the Munsiff, Kamrup [3]

This is the case of non-rendering of assistance, although the court has ordered to render assistance. Decree executed by the court to deliver immovable property but because of certain obstruction, the defendant failed to do so. Hence, he was held liable for constituting disobedience to the orders of the competent Civil Court.

Another case is on the breach of an undertaking which leads to Contempt of Court.

U.P. Resi. Emp. Co-op., House B. Society v. New Okhla Industrial Development Authority [4]

In this case, the Supreme Court has directed the Noida Authorities to verify and state on the affidavit details given by persons for allotment of plots. In pursuance to the same direction by the Supreme Court a person Mr. S filed a false affidavit to mislead the court. The Registry directed a show-cause notice against him to say that why an act of contempt should not be taken against him for misleading the Supreme Court.

Defences to Civil Contempt

A person who is accused of Civil Contempt of case can take the following defences:

• Lack of Knowledge of the order: A person can not be held liable for Contempt of Court if he does not know the order given by the court or he claims to be unaware of the order. There is a duty binding on the successful party by the courts that the order that has passed should be served to the Individual by the post or personally or through the certified copy. It can be successfully pleaded by the contemner that the certified copy of the order was not formally served to him.

• The disobedience or the breach done should not be : If someone is pleading under this defence then he can say that the act done by him was not done willfully, it was just a mere accident or he/she can say that it is beyond their control. But this plead can only be successful if it found to be reasonable otherwise your plead can be discarded.

• The order that has disobeyed should be vague or ambiguous: If the order passed by the court is vague or ambiguous or this order is not specific or complete in itself then a person can get the defence of contempt if he says something against that order. In R.N. Ramaul v. State of Himachal Pradesh [5], this defence has been taken by the respondent. In this case, the Supreme Court has directed the corporation of the respondent to restore the promotion of the petitioner from a particular date in the service. But the respondent has not produced the monetary benefit for the given period and a complaint was filed against him for Contempt of Court. He pleads for the defence on the given evidence that it has not mentioned by the court in order to pay the monetary benefit. Finally, he gets the defence.

• Orders involve more than one reasonable interpretation: If the contempt of any order declared by the court and the order seems to be given more than one reasonable and rational interpretation and the respondent adopts one of those interpretations and works in accordance with that then he will not be liable for Contempt of Court. 

• Command of the order is impossible: If compliance of the order is impossible or it can not be done easily then it would be taken as a defence in the case of Contempt of Court. However, one should differentiate the case of impossibility with the case of mere difficulties. Because this defence can be given only in the case of the impossibility of doing an order.

Criminal Contempt

According to Section 2(c) of the Contempt of Court Act, 1971, Criminal Contempt is Defined as (i) the publication of any matter by words, spoken or written, or by gesture, or by signs, or by visible representation or (ii) doing of any act which includes:

1. a)  Scandalize or tends to scandalise, or lowers or tends to lower the authority of any court, or
2. b) Biasness, interferes or tends to interfere with the due course of any type of Judicial proceedings, or
3. c) obstructs or tends to obstruct, interfere or tend to interfere with the administration of justice in any manner.

Case on Scandalizing the Court:

Jaswant Singh v. Virender Singh [6]

In this case an advocate caste derogatory and scandalous attack on the judge of the High Court. An application was filed an election petitioner in the High Court, who was an advocate. He wanted to seek to stay for further arguments in an election petition and also the transfer of election petitions. These things cause an attack on the judicial proceeding of the High Court and had the tendency to scandalize the Court. It was held in this case that it was an attempt to intimidate the judge of the High Court and cause an interface in the conduct of a fair trial.

Punishment for Contempt of Court

Section 12 of the Contempt of Court Act, 1971 deals with the punishment for Contempt of Court. High Court and the Supreme Court have been given the power to punish someone for the Contempt of Court. Section 12(1) of this Act states that a person who alleged with the Contempt of Court can be punished with simple imprisonment and this imprisonment can extend to six months, or with fine which may extend to two thousand rupees or can be of both type punishment. However, an accused may be discharged or the punishment that was awarded to him maybe remitted on the condition that if he makes an apology and this apology should satisfy the court then only he can be exempted from the punishment of Contempt of Court. Explanation of this sentence is that if the accused made an apology in the bona fide then this apology shall not be rejected on the ground that it is conditional or qualified.

The court can not impose a sentence for Contempt of Court in excess of what is prescribed under the given section of this Act either in respect of itself or of a court subordinate to it.

Remedies against an order of Punishment

Section 13 has been added in the Contempt of Court Act, 1971 after amendment in 2006. The new Act may be called The Contempt of Court (Amendment) Act, 2006. This Section tells that contempt of court cannot be punished under certain circumstances or certain cases.

Clause (a) of Section 13 of the Contempt of Court (Amendment) Act, 2006 states that no Court under this Act shall be punished for Contempt of Court unless it is satisfied that the Contempt is of such a nature that it substantially interferes or tend to substantially interfere with the due course of Justice.

Clause (b) of Section 13 of this Act states that the court may give the defence on the justification of truth if it finds that the act done in the public interest and the request for invoking that defence is bona fide.

Contempt Proceedings

Two Sections of the Contempt of Court Act, 1971 deals with the procedure of Contempt proceeding. One talks about the proceeding in the face of the court of records and other talks about the proceedings other than the court of records.

Section 14 of the Contempt of Court deals with the procedure of contempt proceeding in the face of the court of record whereas Section 15 of this Act deals with the procedure of the contempt proceeding outside the court of records.

These courts of record have got the power to punish for its contempt inherently. Therefore, these courts of record can deal with the matter of content by making their own procedure. While exercising the contempt jurisdiction by the courts of record the only case to be observed is that the procedure adopted must be fair and reasonable in which the alleged contemnor should be given full opportunity to defend himself. If the specific charge against the person who is punished for the contempt is distinctly stated and he is given a reasonable opportunity to answer and to defend himself against the charge then only he will be liable for contempt of court and the court proceeding runs against him. Where the person charged with contempt under this section applies whether orally or in writing to have the charge against him, tried by some judge other than the judge or judges in whose presence or hearing the contempt is alleged to have been committed and the court is of the opinion that it is necessary in the interest of justice that the application should be allowed, it shall cause the matter to be transferred before such judge as the Chief Justice may think fit and proper under the circumstances of the case or placed before the Chief Justice with the statement of facts of the case.

Contempt committed outside the court

Criminal Contempt rather than Civil Contempt committed outside the Court. Section 15(1) of the Contempt of Court Act, 1971 deals with the notice of Criminal Contempt by Court of Record such as the Supreme Court and the High Court. Following manners can be taken by the Supreme Court and the High Court for cognizance of the Criminal Contempt:

1. On the motion of court of records.
2. On the motion of the Advocate General of the Supreme Court and the High Court.
3. If any person proceeds the motion with the consent of the Advocate General in writing.
4. If the law officer who is related to the High Court for the Union Territory of Delhi as the Central Government notify proceeds the motion. Then it can be considered as contempt committed outside the court.

Section 15(2) of this Act states that in the criminal contempt of the subordinate court, the high court may take certain actions in the manner given in this Act.

Contempt by a Company

In case any person is found guilty of contempt of court for any undertaking given to a court while he is a member of the company. Then the person who at that time was in charge of that company will be responsible for the conduct of the business of that company and shall be deemed to be guilty of the contempt. The punishment may be enforced by the detention in the civil prison of such person with the leave of the court

However, that person can be free from liability if such person proves that the contempt was committed without his knowledge or that he exercised all possible means to prevent its commission.

Liability of officer of the company

If the contempt of court has been committed by a company and it is provided that the contempt has been committed with the consent of, or is attributable to any neglect on the part of, any director, manager, secretary or other officers of the company, then such persons shall also be deemed to be guilty of the contempt and the punishment will be enforced against them by the detention in civil prison of such director, manager, secretary or other officer with the leave of the court.

Contempt by the third party to the proceeding

If a third party has a part to play in the offence then the third party to the offence may be guilty of contempt of court and proceeding can initiate against him. In LED Builders Pty Ltd v Eagles Homes Pty Ltd [7] Lindgren J stated:

“It is not necessary to show that a person who has breached the order of the court can be liable for contempt of court but the only necessary thing to confirm his liability for contempt is to show that the person knew of the order which was breached.”

In another case of M/S. Gatraj Jain & Sons v. Janakiraman [8] it has been stated about the third party to the proceeding that if a third party to the contempt petition found to be wilfully disobeying the court order then he cannot prevent the court from restoring the status quo.

Criminal contempt and criminal defamation proceedings

A question has been asked by the person that can an action for criminal contempt and criminal defamation initiated simultaneously. This can be understood by knowing the concept of Criminal contempt and criminal defamation. Earlier, in this article, we have talked about Criminal Contempt. But for an overview, we should know what does a criminal contempt mean. According to Section 2(c) of the Contempt of Court Act, 1971, criminal contempt is defined as (i) the publication of any matter by words, spoken or written, or by gestures, or by signs, or by visible representation or (ii) doing of any act which includes:

1. a)  Scandalize or tends to scandalise, or lowers or tends to lower the authority of any court, or
2. b) Biasness, interferes or tends to interfere with the due course of any type of Judicial proceedings, or
3. c) obstructs or tends to obstruct, interfere or tend to interfere with the administration of justice in any manner. 

Now, we will know the concept of criminal defamation.

The definition of criminal defamation has been given under Section 499 of the Indian Penal Code, 1860. It states about defamation that “Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person.” 

There are certain exceptions of criminal defamation and these are:

1. If the publication of anything is in truth and for public good then it cannot be treated as defamation.
2. When a person touches any public questions then for that he cannot be liable.
3. If the publication is of the reports of the proceedings of the court.

As the right to reputation is an important facet of the right to life and personal liberty guaranteed under Article 21 of the Indian Constitution, hence, the aim of the criminal defamation is to prevent a person from maligning harming the reputation of others by using absurd or malign words with malafide intentions.

In the case of Dr. Subramanian Swamy vs. Union of India (UOI), Ministry of Law and Ors. [9] the constitutional validity of the criminal defamation was upheld. 

Limitation

Section 20 of the Contempt of Court Act, 1971 deals with the limitation for the action of Contempt. It states that no court shall initiate any proceedings of contempt in two conditions:

1. Either the proceedings are on his own motion, or,
2. After the period of one year from the date on which the contempt is alleged to have been committed.

Landmark Contempt Judgments

• Supreme Court Bar Association vs Union Of India & Anr [10]

In this case, the Judge held that procedural aspect for Contempt of Court may still be prescribed by the Parliament so that it could be applicable in the Supreme Court and the High Court. This means that Section 12(1) of the Contempt of Court Act, 1971 which prescribed a maximum fine of Rs. 5000 and imprisonment for a term of six months shall be applicable in this case.

• Zahira Habibullah Sheikh & Anr vs State Of Gujarat & Ors[11]

It was held in this case that the punishment that is given for contempt in the Contempt of Court Act, 1971 shall only be applicable to the High Court but for Supreme Court, it acts as a guide. The judgment that was given was not accompanied by rationality, this was worrisome because the Supreme Court has been given great powers that the drafters of the Indian Constitution has also not given.

• Sudhakar Prasad vs. Govt. of A.P. and Ors.[12]

This case is also similar to the Supreme Court Bar Association Case. In this case also once again the Supreme Court declared that the powers to punish for contempt are inherent in nature and the provision of the Constitution only recognised the said pre-existing situation.

The provision of the Contempt of Court cannot be used to limit the exercise of jurisdiction given in Article 129 and Article 215 of the Constitution.

Famous cases of contempt

• P.N. Duda vs V. P. Shiv Shankar & Others[13]

In this case, the Supreme Court observed that the judges cannot use the contempt jurisdiction for upholding their own dignity. Our country is the free marketplace of ideas and no one could be restricted to criticise the judicial system unless this criticism hampers the ‘administration of justice’.

• R. Rajagopal vs State Of T.N[14]

This case is also known as the Auto Shankar case; in this case, Justice Jeevan Reddy invoked the very famous doctrine of John Sullivan. This doctrine states that public must be open to strict comments and accusations as long as made with bonafide diligence, even if it is untrue.

• In Re: Arundhati Roy [15]

In this case, the Supreme Court observed that the fair criticism on the conduct of a Judge or the institution of Judiciary and its function may not amount to contempt if it is made in good faith and in the public interest.

• Indirect Tax practitioners’ Association v. R.K. Jain[16]

In this case, the Supreme court observed that the defence of truth can be permitted to the person accused of contempt if the two conditions are satisfied. These are: (i) if it is in the interest of public and (ii) the request for invoking the said defence is bonafide. These are given in Section 13 of the Contempt of Court Act, 1971.

• Justice Karnan’s case

He was the first sitting High Court Judge to be jailed for six months on the accusation of Contempt of Court. In February 2017, contempt of court proceeding was initiated against him after he accused twenty Judges of the Higher Judiciary of Corruption. He wrote a letter to PM Modi against this but he did not provide any evidence against them.

Compared with foreign Jurisdictions

United Kingdom

There was no conviction for the offence of Scandalizing the Court from the common law in England since 1993. The origin of contempt by scandalizing the court can be traced back to 1765. The case of  King v. Almon,[17] in which the Almon faced judicial trial against him for libel against a judge. Justice Wilmort, in this case, gives special punishment to Almon for libel and from here the scandalizing a court became a form of Contempt of Court. Around a hundred years later the above case, Lord Morris in the case McLeod v. St.Aubin[18] made a very wonderful statement that for contempt by scandalizing has become outdated and in place of that the court should leave on the public opinion whether the attacks or contempt that are derogatory or scandalous to the Judiciary or not. However, within a year, his words about the contempt by scandalizing being old or outdated and this has proved false in another case of Queen v. Grey[19]. In this case, it has been conceded by the court that the judiciary is still open to criticism by the media, but it should qualify the statement “ reasonable arguments or expostulation” must be offered to treat a statement as a contempt.

United States of America

This country has considered the offence of contempt by scandalizing to be too extreme. Every criticism that we do to the judiciary undermines the authority of the Court. Right to freely comment or criticise the action of a public institution is of primary importance to the public and also for the American idea of Democracy. For abolishing the offence of contempt by scandalizing, the UK consultation paper relied on the landmark decision of the US Supreme Court decision in case Bridges v. California[20]. This offence has been considered unconstitutional in the United States of America.

Criticism of the power of contempt of court

The discretion that a judge has in determining the contempt and its punishment has been a debatable issue in the eyes of some scholars because the contempt power has given too much authority to the Judges. A professor from Virginia University has about this contempt power that the role of victim, judge, and prosecutor are dangerously mixed.

Much of the criticism goes around the due process or lack of restraint in the punishment for contempt of court. Critics have argued that the judge in the Criminal contempt may be too harsh while giving the Judgment. For example, in 1994, the Virginia Court has fined Mine Workers of America $52 million in connection in violence that occurred in 1989. Similarly, sometimes the person who refused to provide the information to the court has been to jail for one year or for many years under the charge of contempt. There is some loophole in this context and it should be fulfilled.

Apart from criticism there are also some good things about contempt. Contempt of Court Act, 1971 is one of the most powerful statutes in the country. This statute gives the Constitutional Court the wide power to restrict an individual’s fundamental rights to personal liberty (that he got under Article 21 of the Indian Constitution) for ‘scandalizing the court’ or willfully disobeying the court’s order, judgment, decree, and direction, etc.

Conclusion

The existing role relating to ex facie contempt of lower courts is unsatisfactory and misleading in India. It appears that evidently, the difficulties in this regard are the after product of overlap of contempt powers under the Indian Penal Code, Contempt of Courts Act and contempt powers of the Supreme Court and High Court under the Indian constitution. The scenario has emerged as more complicated by way of the inconsistent interpretations followed through the Supreme Court and High Court regarding diverse provisions under the Indian Penal Code dealing with interference with the administration of justice and exclusion clause contained in the Contempt of Courts Act. Not only the higher court should be given the power to deal with contempt but also the lower court should be given this power. Contempt of Court if seen from the perspective of the judges, higher judicial officials seems good but if it comes to the perspective of common people it turns towards its bad effect.

Reference

•  Attorney-General v. Times Newspapers Ltd, [1973] 3 W.L.R. 298.

• Noorali Babul Thanewala v. K.M.M. Shetty, AIR 1990 S.C. 464

• Utpal Kumar Das v. Court of the Munsiff, Kamrup, AIR 2008 Gau 62: 2008 (2) Gau LR 706

• U.P. Resi. Emp. Co-op., House B. Society v. New Okhla Industrial Development Authority, AIR 2003 SC 2723

• R.N. Ramaul v. State of Himachal Pradesh,  AIR 1991 SC 1171 

• Jaswant Singh v. Virender Singh, 5332(NCE) of 1993

• LED Builders Pty Ltd v Eagles Homes Pty Ltd, [1999] FCA 1213

•  M/S. Gatraj Jain & Sons v. Janakiraman, Patent Appeal No.1 of 2009

• Dr. Subramanian Swamy vs. Union of India (UOI), Ministry of Law and Ors., MANU/SC/0621/2016

• Supreme Court Bar Association vs Union Of India & Anr, AIR 1998 SC 1895 

• Zahira Habibullah Sheikh & Anr vs State Of Gujarat & Ors, (2004) 4 SCC 158

• Sudhakar Prasad vs. Govt. of A.P. and Ors.,  (2001) 1 SCC 516

• P.N. Duda vs V. P. Shiv Shankar & Others, 1988 AIR 1208

• R. Rajagopal vs State Of T.N, 1995 AIR 264

• In Re:Arundhati Roy…. … vs — on, 2002 AIR (SCW) 1210

• Indirect Tax practitioners’ Association v. R.K. Jain, NO.9 OF 2009

• King v. Almon, 243 K.B. 1765

• McLeod v. St.Aubin, [1899] A.C. 549 ( Hereinafter, “Aubyn”)

• Queen v. Grey, 1900 2 Q.B. 36

• Bridges v. California, 314 US 252 (1941)

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This article is written by Amanat Raza, a student of faculty of law, Aligarh Muslim University. In this article, he discusses about the process of opening a coaching centre, what are its requirements, and also talks about business plan for the coaching institutes. 

Digital India

The objective of the Digital India Mission program is to transform the entire ecosystem of public service through the use of information technology. This program has been initiated for transforming India into a knowledgeable economy and digitally empowered technology. The concept of digital India has expanded its route from the banking sector to the educational sector. We can clearly see that many of the coaching centres of India have fully used this concept of Digital India to flourish their coaching as well as in educating a person.

Coaching in India has become a kind of business through which people only want to earn money but some coachings have given a great contribution in making digital India in spite of doing only business. Let us take an example, Unacademy, StudyIQ etc are some of the online learning platform through which they want to educate such people who can’t afford reading as well as learning. In India, today, a person might not have anything but it is quite necessary that they have net connection in their mobile phone. So there is an easy accessibility of education digitally. It is a great initiative by our leader to introduce digital India programme.

How to start a coaching

Nowadays, there is too much competition in every field and if one has to survive in any field he/she has to do something different or has to think something bigger and productive. Nowadays, Private coachings are doing what we are talking about. In this highly competitive environment, these coaching centres are the medium for achieving successful education business. If one thinks to open a coaching centre, here are some things which one should know before starting a coaching business. These things are:

• Licensing and Registration: If one wants to open a small scale coaching there is no need of license but for opening coaching on a large scale, that is, it intends to be the size of an institution then, one needs licensing. You need to get a trade license and pay tax for the revenue generated through the centres. If the financial gain of the centre exceeds 9 lakhs per annum, registration of the business becomes mandatory and service tax becomes payable within 30 days. What structure we would like to employ in a coaching institute is based on which type of registration process is required. For example, if the coaching will be of sole proprietorship then different process of registration is required similarly if it is company based coaching institute then another criteria of registration is required. Each form of the coaching business has their own form of registration but one thing is common in these all form, that is, all have to take Shops and Establishments license from the inspector of the area in which one is going to establish that coaching.

Documents one have to give to get registration under the Shops and Establishments Act are:

1. Commercial Address Proof
2. Pan Card
3. Identity Proof
4. Fee Payment Challan

The processing fee which is required for this license is usually between 125 rupees to 12,500 rupees depending upon the number of employees and manpower you are employing for the business. If all this process is completed then one can get the license immediately.

• Location: If someone wants to open a coaching centre, he must find a better location for it. The location must be easily accessible by the students because the location factor does have an influencing effect on the student. So it is better to open a coaching centre at the centre of that particular area or colony. It will help in the popularity of coaching in that locality and also students can easily reach the class.

• Determining the subjects: Before starting a coaching centre, one has to decide about the subjects that he is going to teach. Depending on one’s own educational qualifications, one can teach children of several age groups, and even to the young adults. The best option is to do a little bit of research to find out what subjects are in demand amongst the students in your locality and if there is hardly any tutor available for it, then you must start with it. You can hire a tutor who is an expert in that subject and can offer quality education to the students at affordable rates. Knowing an additional foreign languages (such as French, Spanish, German, etc.) will add value to your education business. We know that knowledge is one thing, but knowing how to exhibit that knowledge is another, then only students will understand the topic which teacher is going to teach. So it is better for the person who is opening a coaching, to appoint that teacher who has knowledge of the particular subjects as well as having the power to exhibit that knowledge.

• Infrastructure: Once you get the proper location for coaching then you have to think of what facilities you are going to provide to your students. As every human has the tendency to attract towards what looks beautiful, clean etc. So you have to open a coaching with best infrastructure and provide students with enough space to keep their extra belongings such as bags, bicycles and many more things. Adequate number of seats should be there. Proper lightning should be there so that each student can see the blackboard clearly. Mike through which teachers take class should be of good quality as well as sound system should be good so that each and every student can clearly listen to what the teacher is teaching. If you are opening a coaching which is on the second or third floor of a building, then you have to check the stairs that they are in proper condition or not and also you need to put light on the stairs so that no student falls from the stairs. The coaching infrastructure should be checked that it is fire protective or not because we have seen many cases of a coaching catching fire and many students were drowned to death.

• Staff and Study Material: If one is going to open a coaching he needs to hire perfect staff for his coaching but we all know that nobody is perfect then also we have to search for staff who is suited for the coaching. You should hire the competent staff for the coaching centre who should know the subjects and have command over it. We should also consider the needs of the students while choosing a staff. It is one of the important things that you have to choose while establishing a coaching business. Appoint only those teachers who are dedicated towards his work and also have experience in the teaching field. Now while talking about the study material you should keep one thing in mind that students judge coaching through their study material so give the best study material to students. The best study material should be the hand made material by the teachers which are made by studying different material, books and giving one’s opinion. The material should not be copied from the unauthorised source. Material should have concise details of the subject and key points that are necessary for the students.

Biggest coaching institute in India

There are many coachings in India which are good and they all help in preparation for different subjects and for different field. But I will be talking about only three of the fields which have been prevalent in India. I will also give names of number of these institutions for further enquiry anyone wants. These coaching institute are as follows:

For Law

1. Rahul’s IAS: This coaching was established in 2001 by Rahul Sir. It is an institute for preparation of IAS and Judicial Service Exams. The vision behind the endeavour to provide genuine support to the students preparing for these competitive exams. The agenda of this academy is not just to teach and complete the syllabus; rather the larger agenda is to produce as many of successful students as possible. More importantly, they aimed at inculcating human values and compassion into their students, to make them better human beings. Ph. No. : 011 – 27655845, 011 – 27654216,
   +91 9811 195 920
2. Pahuja Law Academy: Pahuja Law Academy is perpetrated at giving high quality education for Judicial Services and Law Entrance Exams preparation. This academy is about to take a step forward towards paperless study. This step helps in improving interaction between the Students and the faculty. This can be done by Providing Smart Tablet. Ph. No. : 9821593226, 9821593227
3. Zia Judicials: This coaching was established in 2017 by Zia Ul Mustafa Ansari. Their motto reflects their vision i.e., ‘threshold to success’. This coaching has established because of the substandard education provided by the existing institution. Ph. No. : +91 9152489831
4. Edulex India: It is a premier institute for professional legal studies. The edulex team comprise of distinguished professor, advocate retire judges and authors who are keen to contribute their knowledge, wisdom in educating the students. Ph. No. : 0120-4235436 / 8860934529

For Engineering

1. Allen Career Institute: This coaching was started in 1988 by Shri Rajesh Maheshwari. This coaching was started with just eight students and when it started, it was the only institute who used to teach all the science subjects under one roof. Now this coaching has established its name throughout the country.
2. Resonance: This coaching has was established in 2001 and now it has come a long way in this field. Their vision was to give every student excellence in their career education. This institute have 12 classroom program study centres across the country with 300 plus faculty members.
3. FIITJEE: FIITJEE was created in 1992 by a mechanical engineering student at IIT delhi. Their vision was to become a comprehensive global leader in education by 2030. Their mission was to create worlds best institute that serves the society for thousands of years. Ph. No. :  011-49283471 / 73 / 75
4. Narayana: This Coaching Institute was established in the year 1979 for aspirants who want to give state level entrance exams. To increase the intellectual and emotional growth of its students this coaching institute has dedicated itself to the vision of providing the best education. They have set this educational institution to provide a platform to those children who are not competent a platform where the goals of students achieved, their skills are nurtured and values are built to as to make them stand in front of the public and to prove them.  
5. Aakash Institute: This coaching has been quite famous for helping students in realising their dreams of becoming engineers. An outstanding centre for excellent education; where students have been giving astonishing results in engineering entrance exam.

For Medical

1. Allen Career Institute: Initially, this coaching was established by Shri Rajesh Maheswari with only eight students. At that this coaching was teaching all subjects of science. Now, this institute has famous for engineering as well as for medical preparation. Phone No. : +91-744-2757575
2. Aakash Institute: This institute was founded in 1988 to train the young mind who want to prepare for medical entrance programme. When it was stated it had only 12 students. Now, it has become a renowned coaching institute for medical as well as engineering preparation throughout the India. Telephone no. : +91-11–47623456
3. Resonance: This coaching has was established in 2001 and now have 12 classroom program study centres across the country with 300 plus faculty members in which 25 plus faculty  members is from IITs. For extra information you can contact on the numbers given, Ph. No. : +91-8505099972, 8505099973
4. Career Point:  This coaching was established in 1993 to integrate the quality of education to the students who are not able to get that education and also for those who are preparing for competitive exams. Today, this coaching institution has made its name so much as a brand so that the students only take their admission in its brand name and also this coaching has itself fully established throughout India. Ph. No. :  +91-744-3040000, 0744-66305 +91-744-3040000, 0744-6630500
5. Narayana Coaching Centre: This Coaching Institute was established in the year 1979 for aspirants who want to give state level entrance exams. To increase the intellectual and emotional growth of its students this coaching institute is dedicated to the vision of providing the best education. Their motto is to inspire or motivate the students to walk on the path of success and to do hard work because it is the key to success. Ph. No. :  011-42707070, 42707000

Points to remember while setting up a Coaching Centre

A great way to contribute to society and help the great young minds to enhance their skills is teaching. However, the schools and colleges are not able to provide adequate education to students or are not able to fulfill the needs of the students which after sometimes in his career raise the need of coaching centres for him. Coaching centres these days have demise from being a home-based training exercise as a gym to a well run industry as a cola industry or any type of big industries. These centres play an important role in helping students in the preparation of the major entrance test and fix that the hardworking students qualify for admission into the reputed institution. So as a tutor if you want to open a coaching centre, you need to fulfil certain requirements before opening a coaching which helps in full establishment of that coaching centre. These pre-requisite are as follows:

Command of the subjects

You need to have a deep rooted knowledge of every subject which you are going to introduce in your coaching centre and having clarity of facts of that subjects because today’s generation of students have become smart enough that they can analyze your skill. So it is better to work on your skills and command over the subjects otherwise students will not come to your coaching. If you have the professional competence to teach the subjects then only you will be given importance by the students and they will hear you. 

Location of the coaching centre

The coaching centre need to ideally be placed in a central vicinity. This essentially means that you will need to rent a few commercial spaces ideally in some commercial complex within the predominant town or metropolis; the coaching centre is intended to be positioned here.

An imperative location will not only create natural exposure for the coaching centre but additionally makes it less difficult for the students to attain the classes.

The location of the coaching centre does have a binding impact on students but it works great for the recognition or popularity of that coaching centre. This additionally makes it less complicated for students to attain their coaching class.

Adequate Infrastructure

The coaching centre must have good enough infrastructure within the form of books, study material, adequate seating arrangement and some relaxation centres for the students.

Sufficient lighting and seating arrangements need to be available for the students. As you fulfil the above-listed prerequisites of setting up a coaching centre, it is time to start.

Space Concern

The coaching centre needs to have adequate area for your students to hang around. As the students might be coming on an everyday basis to the coaching centre, it will likely be of worth in case you are capable of providing them with some greater space to keep their personal belongings.

A better idea would be to have a separate room with some sort of lockers allocated to each of the students to keep their personal belongings.

Now, let us know how to begin for opening a coaching centre

Set up low prices in the beginning

Nowadays, the market in the coaching business is extremely competitive and to get an upper facet in the same, you will need to fixed low prices for getting admission of students or for attracting them initially. As and when the popularity graph of your coaching institutes gets better, you can start playing with the fee charged. At this time you are in a position to dominate the students to take fees as you like.

Providing Quality Education

You need to provide quality education to your students and upgrade the syllabus continuously considering the advancements in the subject you are dealing with. This creates the need for a continuous upgradation of knowledge at your level which help a student to compete with other students. You must therefore be a keen explorer of your subjects for achieving success on this level.

Study material is your advertisement

Keep in mind that study material is your commercial tool. Your students will judge you from the quality material you provide them. The same has to be produced after excellent research and ought to ideally cover all aspects of the issue.

If you are able to offer satisfactory or quality of study material with worthy subject details, half of your work is automatically accomplished. Your worth will spread through word of mouth and an increasing number of students will try to take admission in your coaching centre.

Competent staff

If you are going to hire different teachers for your coaching centre then this is honestly an essential step to take. Competent staff depending on the want of the student and the subjects you are covering needs to be employed.

Look out for dedicated and skilled teachers with some experience to add to your faculty. This will not only enhance the reach of your coaching centre but will also introduce faith within the student network who comes over to the coaching centre.

Teaching tools

Teaching tools work as an advantage for the teacher and the same is true for any coaching centre. Apart from the conventional whiteboards and markers, you can use innovative teaching tools like charts, operating models and online help from experts in the field of your advantage.

Besides this, the idea of smart classes too can be introduced for making the coaching centre innovative in a real sense.

Marketing 

Marketing is an essential issue associated with the achievement of any enterprise or business and the same is vital for the coaching centres. First of all, you can place advertisements in local newspapers, print out handouts and distribute the identicals in schools in the city and encourage your students to share their experiences with their friends.

As the popularity of your coaching centre increase, the most number of students will display a willingness to take coaching from your centre. Whenever a student from your centre qualifies in an aggressive exam, praise him/her and spotlight the occasion definitely in the local press.

Following the above-listed points will make ensure that you set up and manipulate an efficaciously running coaching institute.

Coaching centre business plan

Coaching centres or classes can be open by any group of people from lower class to the higher one or from educated people to uneducated people. On hearing this business it seems that the common but how we do this business is also not depend on us regarding weather  we are educated or uneducated. In both the condition either we are educated or not we can make this coaching business successful. It is a common business; you have seen it in your locality. There are many coaching classes for different-different levels can be seen in all over India. For example, there is different coaching for school level preparation, for professional degrees, and for professional exams. To run a business plan you need to create a well talented, educated and professional team first. To get this team you need to expend money. Initially, in every business you need to spend some money but after some time you get profit from that expenditure. In starting you have to just spend in the coaching and once it gets famous and gets its brand name then you can earn ample money from this business. The business usually starts small and later on it expands when it gets name and fame. Then the old teachers of coaching goes and new come but students get nothing worry about that as they used to take admission on the name of brand. The plan is to give this team selected work. Just like to tell one to look at its marketing area and do whatever he can do to make its marketing and increasing the number of intake in the coaching. Another person to look at his infrastructure and make it more attractive so that an excess number of students take admission in that coaching. Give quality of education to students by providing them quality of teachers so that clear the competition and make proud your coaching. If the number of successful students will increase the number of students try to get admission in your coaching and you will earn the maximum. Some coaching centre attracts you by saying that they will provide each and every facility to get crack your exam but you won’t do that because it will decrease your reputation in the market. You can make separate batches for boys and girls and don’t fill it like you are keeping sheep in it. Just make 20 to 25 students batch so that each student can ask their doubts. If your name established in the society then you can increase the length of a number of students and extract excess amount. And at last, do marketing as much as you can as it is the best way to get name and fame. If one gets its name as a brand then no one you stop you to earn from coaching centre business.

Marketing tips for coaching institute

There are many ways of marketing a coaching institute. It can be done  digitally, social media marketing, news channels, banners, pamphlets, and free seminars.

1. 1. Digitally or Internet marketing: In digital marketing there are several platform through which you can market for your coaching centre these are facebook, Linkedin, WhatsApp, Instagram and many more. You can post your students picture, who have excelled in their exams, on these platforms except writing in text. Because posting picture gives more weight on writing text. Also, try to post videos of those successful students with their strategic plan that how they have prepared for exams and how they cracked it. One needs to post these pictures and videos from time to time as well as choose the correct timing or the right timing to post so that a number of people can see your posts. Time is crucial while posting a picture on these platforms. For example, when you post an advertisement on facebook the correct time is to post it around 8 PM to 10 PM as many people engage on Facebook at this time. Social media marketing: For promoting your coaching, Google and Facebook will be a fantastic approach to gain brand exposure up to mark and bring qualified visitors to your website and convert our website visitors into likelihoods. Google maps would be a great place to get visibility for your coaching centre. You might list your coaching centre also to promote at internet marketplaces such as OLX and furthermore Quikr to get spare visibility.
   2. Social Media Marketing: As a coaching business owner or the director you should hold a grasp on social media to increase your brand message. What does social media marketing means? It means advertisement on social media such as facebook, twitter, youtube and linkedIn. The best way to advertise for your coaching centre is to make video and put it on youtube. You can also create a facebook page to make promotion of your coaching centre. You have to maintain this page regularly and have to write all the achievement of your students. Using Social Media you can connect to your existing as well as new customers by posting frequent updates about your institute on  youtube and LinkedIn. Nowadays, twitter is in trend and if one wants to get famous they can get through this platform. Most of the people use Twitter these days and mainly the rich family people run their twitter account. So it is a better idea to make a twitter account and attract that family to send their children to take education from your coaching centre.
   3. News channels and newspapers: This is the best idea to advertise for your coaching centre. As most of the people read newspapers daily after waking up and also they use to listen to news from news channels. Most people want to get current knowledge of their country and what is going on in the country. Therefore, the news channels play an important role in giving those people that knowledge so it is better to advertise for your coaching centre as most of the people get connected to that.

• Banners: No matter how much the net and social media flourish, banners are still a great way to advertise for your coaching centres. However, with the number of banner ads obtainable, consumers are experiencing “banner blindness”. With this in mind, there are some factors to be taken care of in order to get your banner observed or noticed. First of all, you need to do a little study and pick out your words wisely. The most important factor is to discover the right place for them to hoard. You can have advertisements on trains, buses, stations, walls, and many others. Remember “You don’t need more banners; you simply want extra perspectives or views.”

1. 1. Pamphlets: Advertising through Pamphlets entails many key factors. To begin with, the pamphlet should be carefully designed with your target audience in mind. Pamphlet distribution ought to be targeted. Do some research about the demographics of your target audience and distribute it wherein you will find them. Also, be prepared to pick up dropped leaflets since you will do extra damage to your campaign by way of littering the streets with your pamphlets.

• Free Seminars: Marketing additionally includes conducting activities such as workshops or counseling classes where you deliver away free specialty gadgets like key chains, hats, pens, and many others. You can also give your coaching centre a logo. This would additionally be an awesome time to distribute pamphlets as your audience might keep it at the side of the forte item or with the specialty items that you have given. Those activities will let you subtly promote your products or coaching centre due to the fact the focus is on the event or specialty item.

Irrespective of good marketing of your coaching classes, one needs to focus on providing good teaching material and high-quality education. Because when your student does well, you have got something to brag about to the press and to parents. And finally it should be noted that the results attract more than ads and advertisements.

Rules and Regulation for Coaching classes

We know that to run something peacefully or smoothly one thing is necessary and that is discipline. It can be achieved by making rules and regulations. The same is in the case of coaching institutes or coaching centres. To run it in a better way it is necessary to maintain discipline and it can be achieved by them through making laws and regulations. These rules and regulations are made for your coaching centres in different states. Here I am presenting one regulation from the Pune government for the private coaching centres. These rules are as follows:

1. Government will constitute a coaching class council as a regulatory authority
2. Classes have to register, update information yearly and have to renew the registration every three years
3. The entire process of registration, updation, and renewal will be online
4. The government would not put a cap on the fees, but the classes would keep the council apprised about the fees
5. It will be illegal to appoint the teacher employed with colleges and schools.
6. Coaching classes would pay 1% of their income towards ‘Development Fund’
7. Number of students in one batch should not ideally exceed 120 but in case the coaching classes have adequate infrastructure to accommodate such students then it can go up to 120.

The below mentioned are the guidelines or the rules and regulations for the students that you can make for your coaching to run in a smooth way and in a disciplined manner: 

1. Given identity card to each student and tell them to carry his/her identity card at the coaching premises when present and shall have to produce it on the demand of authority.
2. Mobile phones should be either switched off or in silent mode in the Coaching premises.
3. Students have to arrive inside the coaching 5 mins before the class. Students who are late will no longer be allowed to go into the class.
4. A student has to attend minimal 80% of the classes all through the tenure of the course, failing which, unless there are sufficient reasons for such absence with proof, the name of the particular.
5. No refund of payments is permissible under any circumstances.
6. Any student found guilty of misbehavior within the coaching premises might be handled certainly as in line with the norms of the institute.
7. Smoking, Tobacco Chewing, intake of alcohol and use of narcotics are strictly prohibited inside the premises of coaching institute. Coaching students founded in the case could be dismissed from the Institute and could be surpassed to the law enforcement authorities.
8. Damage to the property of the coaching centres like tampering with furniture may be regarded seriously and the fee of damage might be recovered from the involved coaching students.
9. The students are expected to see the notice board regularly because it is the only authorised media between the students and the coaching institutes. So the students have to be regularly updated from the notice board and the coaching institute will not be responsible for any loss of the student due to their negligence.

Rules for Private coaching classes

There was a bill introduced in Lok Sabha in 2016 for the rules and regulations of the private coaching as these coaching were misusing their powers. This act may be called the Private Coaching Centre Regulatory Board Act, 2016 and it extends to the whole of India. The Central Government shall constitute a Board to be known as the Private Coaching Centres Regulatory Board constituted under Section 3 for the purpose of regulating the functioning of private coaching centres. The board shall have the following powers:

• The board has the power to give recognition to private coaching centres on such conditions, as may be prescribed
• Board specifies, from time to time, the fee to be charged by coaching centres from students;
• It will formulate a refund policy for students who leave coaching midway or before completion;
• It specifies modes of payment of fee in lump sum and in installments by the 25 students;
• It also has the power to specify the number of holidays to be observed by coaching centres per week;
• It lays down the minimum qualifications for teachers to be appointed in coaching centres;
• The board determined, in respect of coaching centres, the minimum number of lecturers and student-teacher ratio in the classes;
• The board will ensure the appointment of counselor, psychiatrist and physiologist in every coaching centres for counseling of students;
• It suggests steps to be taken by every coaching centre for reducing psychological pressure on students; and
• It has the power to specify the level of basic facilities to be provided in every coaching centre.

Why this bill has been introduced in Lok Sabha?

The practice of pre-exam training institutions is prospering very unexpectedly inside the country. These coaching institutions make fake claims for guaranteed success in IITs, Medical and many competitive examinations. Though the number of candidates is increasing day by day while the number of seats available is limited. In this type of situation, a hefty quantity is charged as price from students with none facility of good enough education. Due to this, the fate of students gets jeopardized. Thousands of kids emerge as victims of depression once they came to know of their result. The struggle for achieving victory in cut-throat competition is engulfing community sensitivity. It’s miles a reality that the standard of teaching in coaching classes promotes negative thoughts in a student. Also, the philosophy of Do or Die is likewise entrapping the children into mental torture. Roughly, 16 students commit suicide under pressure of exam in the country every year.

In the year 2014, forty-five students have committed suicide in the country. According to the National Crime Record Bureau, there is sixty-three percent rise in the number of suicides committed by youth in 2014 in comparison to the number of suicides committed in the year 2013. The series of suicides continued in the year 2015. According to the Bureau, 40.17 percent of the youth who committed suicide were below the age of 30 years out of which 17.2 percent were girls. Therefore, there is an urgent need to enact a law to regulate the functioning of such private coaching centers in the country. 

Coaching registration process in Hindi

https://hindisahayta.in/coaching-kaise-khole/

Coaching centre registration essentials

Coaching Centre has grown to be a vital part of the education system in India. The demand of coaching institutes has seen a growth of 35% during the last five years.

It’s miles expected that about ninety-five percent of the high school students took up coaching classes for most of the subjects.

It must be noted that if you want to open a small scale coaching centre then there is no need to take a license you can open it at your house without a license.

However, if your coaching centre intends to be the scale of an institution, you would need to get a trade license and pay tax for the revenue generated through the centre.

If the profits or the income exceeds nine lakhs per annum, registration of the coaching business turns into compulsory and service tax will become payable within 30 days.

Registration of your business would rely on the structure you would like to employ. The three fundamental options that might be available are:

1. Sole proprietorship
2. Partnership
3. Employer

Shops and Establishment License for Coaching Centre

The business systems that we want to open as a Sole ownership, partnership, and employer has its own form of registration requirements but a thing that remains common to all three is the Shop and Established license that is given by the inspector of that area. Without this license you cannot open any type of coaching business in an area and if you open this then you will be punished for that offence. 

All types of coaching business that we are going to start are expected to be registered under the Shops and Establishments Act with the inspector of that region. This registration has to be completed within one month while setting up the coaching business and for this statement is to be issued to the inspector of that place or region in which you are going to open a coaching business.

The statement that you send to the inspector will comprise of-

The statement should consist of the Name of the employer who are going to be employed in your coaching business,

It should also contain the name and address of the coaching business and it should also include the Postal Address of that coaching business,

It must contain the category of the coaching business that in which category are you going to keep your business,

The statement should also mention the number of staff employed in the coaching business which you are going to open,

You have to also mention the date on which the established coaching business is going to be commenced.

Documents for registration under this act are–

Commercial Address Proof of that person who is opening a coaching business because if in case of misuse of that business he can be traced from that address,

Identity proof of the person who will direct the coaching or the person who is opening the coaching business,

Pan Card of the person who is going to open a coaching business,

Fee Payment Challan.

The processing charge for this license is usually between 125 rupees to 12,500 rupees depending upon the quantity of personnel and manpower you are employing for the business.

A license will be issued instantly if all the information in the application is accepted.

Obtaining a Trade License For Coaching Centre

A trade license or a business license is a permit or license that is issued by government authorities which gives power to the individuals or companies to administer their business within the territorial jurisdiction of the government.

Basically, it allows the individual who tries to start coaching business to do so legally and if he does that business illegally, he will have to be prosecuted by law. Why a trade licenses vary between countries, states, and local municipalities? Why it does so? It does so because every geographical location or jurisdiction regularly requires its personal localized license with respect to the numerous taxes imposed inside the stated jurisdiction.

How one can get a trade license for coaching centre?

1. An application should be filed to the local municipal corporation of the area in which he is going to open a coaching business for obtaining a trade license.
2. The license needs to be produced before you are going to start your coaching business.
3. The application has to be taken from the business establishment who is going to establish that coaching business, status quo, three months before the start of the activity. After that as soon as a license is issued, it must be renewed from time to time to make sure that the business is being carried out in accordance with the local laws.

There are a number of files and documents that are required to be provided and this depends on the place of the operation of the coaching business that was stated.

The place of business:-

• If the place is owned by the applicant then the tax bill needs to be presented by him/her.
• If a tenant owned a place then the rent bill needs to be produced by him/her.
• If a lessee owned a place then the lease-deed needs to be produced him/her.
• If relative/individual granted rent-free lodging, of a pace to someone, by the proprietor of the premises then consent letter from the proprietor to be produced.
• If a person is granted rent-free accommodation by way of any bona fide tenant, consent letter- in addition with the current CE of the tenant to be produced him/her.
• If a sub-tenant, the consent of the owner of the premises may also be needed to be produced together with files through rent-bill, current CE, etc of the original tenant.

In the case of corporations/personal restrained companies, the following documents needs to be produced along with the application:

• Memorandum/Articles of affiliation by the person/corporation restrained companies has to be produced,
• Information in Form No. 32 which speaks of the range or the number of the managing director of the company by that has to be submitted,
• Form No. 18 which speaks of the registered office of the business enterprise has to be submitted by that person,
• Proof of possession or occupancy has to be submitted.

In the case of a Partnership firm, the Partnership deed to be produced.

Along with the form and the documents, one has to offer a sworn statement (also called an affidavit)/declaration which certifies that in case of any discrepancies or any illegal activity on the behalf of the person or company who want to begin or start a coaching business, then the certificates of enlistment could be revoked.

The Municipal Commissioner, after making important inquiries within thirty days after getting of the application, shall, if satisfied, grant the certificate of enlistment to the person who wants to open a coaching business if the application is in order, or shall reject the application if it is not always so.

Obtaining a Current Account 

Another step which remains constant and is not varied is to own a current account in your name or the name of your coaching centre in any nationalized banks.

Procedure: 

• A service tax registration number and a VAT/CST number along with a letter from a CA in which the character of your business that which type of business are you going to start is mentioned and a letterhead on which the company’s or the firm’s name and address and stamp in the name of the proprietor has been given.
• After submitting all these documents and registration copies to the bank, you can get a current account for your coaching business.

You are required to have a minimum bunch of packets ranging from giving to twenty-five thousand in this account.

Service Tax Registration

The Indian government requires us to pay service tax, if it is predicted that the turnover would be greater than nine lakhs and it would be less than nine lakhs then you are exempted from giving the service tax.

The application for such registration must be filled through ST-1 form which can be submitted online after creating an account on the subsequent page :

https://www.aces.gov.in/STASE/ui/jsp/common/registerWithACES.do

Coaching Registration Form Format

Format of coaching registration form:

Coaching Registration form Sample

Let we should take a state name Lakhmir as an example and now filling the form. And take one institution name as Pleaders Coaching Institutes.

Benefits of starting a coaching institute in India

This benefit can be in both ways done to the students as well as the person or teacher who is opening the coaching institutes. Firstly, we should talk about benefits for the teachers or the person who is opening a coaching. How much benefit will you get within the coaching class relies upon the way you teach. Because if your teaching method is good then a large number of students will come in your coaching centre and you’ll additionally be capable of charging a reasonable fee to a limit. In an instantaneous time, many education centres are making terrific earnings by performing higher or better. If you need, you can make study as a minimum six batches in an afternoon, and if you have about 20 students in a batch, then you definitely get Rs 10,000 in a single month, commonly at a fee of Rs 500. So you can without problems earn approximately 60,000 rupees by running 6 batches everyday. Now, let us know about the benefits of coaching for the children. As in schools, teachers do not give attention to each student and because of this students were not able to understand the subjects and also not able to clear any competitive exam. But this thing does not happen with the coaching centres. They give equal attention to every student. And also they focus on each student. They keep less no. students in a batch so it is easy for tutors to teach and pay full attention to each student. Also, coachings have best teachers from all over the country who have command over the subjects so it is also easy for the students to clear their doubts.

The post How to Register a Coaching Centre in India appeared first on iPleaders.

This article is written by Arunesh Roy, pursuing a Diploma in Entrepreneurship Administration and Business Laws from LawSikho.com. Here he discusses “Royalty and Technical Fees Payable to Foreign Nationals”.

Historical Perspective

In Post liberalization era India has seen a lot of cross border transactions leading to payments of technical fees and royalties to foreign nationals/ foreign companies. With the increase in globalization coupled with the tremendous growth of Information technology and related aspects, import of technical knowhow, import of software and technology services and other intellectual property, has voluminously increased. With the increased focus of the government on the socio-economic development coupled with all-round development of various sectors, the country is faced with more challenges to import the necessary intellectual property and this has resulted in increased outflow of payments in the form of royalties and technical fees.

Time and again various government have taken varied stands with regards to the ease and access to the cross-border transactions depending upon the requirements of the situation and also on the socio-economic requirement. Accordingly, there have been varied rules and regulations depending upon the scenario.  Need has been felt by the varied government to keep such transactions easy to use and hence nominal taxes have been charged on such transactions. 

Thus over a period of time things have been broadly evolved and now we may see a lot of technical and Intellectual property being used across various aspects which were unheard of before.

Definitions – “Royalty”/“Fees for Technical Services”

“Royalty”

The term “Royalty” refers to the amount of consideration paid to the proprietor or Licensor of intellectual property rights against the benefits derived or sought to be derived by the Licensee or the user. The term Royalty may be paid against the use of copyright, patent, trademark, industrial design,  Trade Secret, know-how or combinations of them. However, it may also cover mining royalties, art royalties etc.

The exclusivity of the right in relation to the intellectual property must be with the grantor of the right. Just by passing off the information related to a design of the tailor-made machine to the buyer does not amount to “Royalty”- held in “CIT vs Neyveli Lignite Corporation Ltd (2007). It has also been ruled out by a Texas court that royalty is the share of a product or profit reserved by the owner of the property for permitting another to use it- held in Alamo Nat. Bank of San Antonio Vs Hurd, Tex Civ. App.)

As per section 9 of the Income Tax Act the term “Royalty” means either of  the following:

(i) Transfer of any right or the granting of a license, in respect of a Patent, design, process, formula or any kind of similar property. 

(ii) Consideration for the transfer of any rights (includes the granting of a license) in respect of a patent, model, design, invention, formula, process, trademark or any kind of similar property.

(iii) The imparting of any information related to the working of or the use of any Intellectual property;

(iv) The use of any patent, invention, model, design, formula, process, trademark or any similar kind of property;

(v) The imparting of any information concerning technical, commercial, scientific, industrial knowledge, experience, skill or any similar kind of property;

(vi) the use or right to use of any equipment such as industrial, commercial, scientific etc;

(vii) The transfer of all or any rights in respect of any copyright, literary, artistic, or scientific work or knowhow including films, or videotapes    

  (ix) The rendering of any services in connection with the above would also be treated as part of royalty payments

“Fees for Technical Services”

As per Income Tax Act it means any consideration for the rendering of any managerial, technical or consultancy services (including provision of services of other personnel)  but does not include the consideration for any construction, assembly, mining or like project undertaken the recipient of the consideration, which would be treated as Salaries in the hands of the recipient.

Thus the terms have been properly elaborated by various acts.

Issues cropped up in making payments of Royalties and Technical Fees to Foreign Nationals

The payments of royalties and technical fees to foreign nationals have led to creeping up of various issues such as type of product or services received a transfer of technology issues, right to commercially exploit the product or services, transfer of limited rights in the product or services transferred etc. Thus numerous challenges have arisen on the basis of final usage of the products/ services and also on the nature of the intellectual property being transferred and the extent of the transfer. 

These challenges need to be dealt with properly at various levels by the taxation departments so that the level of taxes levied are minimal and all such transactions may be easily continued without any hassles.

Thus it has led to the evolution of easier systems, rules, regulations, tax rates and continuous involvement of various governments/ departments to keep them easy for entrepreneurs/ aspiring entrepreneurs.

Issues cropped up in Taxation due to Income Categorization

The underlying principle which needs clarity with regards to such matters is whether the transaction involves a transfer of “intellectual property involved” or transfer of the “ product/ services”. This would lead to clarity of the taxation aspect as well as the structure involved.

There is no direct rule in the Income Tax Act categorizing such transactions and payments to foreign nationals against the transactions. It entirely depends upon the nature of transactions. Any payment made by a “resident” to a “non-resident”/ Foreign company towards such transactions could be treated as Royalty, technical fees, capital gains or business income depending upon the nature of the transaction. 

Hence various court in India has predominantly depended upon various precedents and other judgements that the category of Income would depend upon the “ Purposes for which the consideration is paid in a transaction”. Broadly in case, the consideration has been paid towards procurement of the “Product”, it would be treated as “Business Income”. However, in case the consideration has been paid towards the right to “Commercially exploit the intellectual property in the product” the same could be treated as royalty and treated accordingly. In case full rights relating to the product have not been transferred, then the income might be treated as “business income” or “Capital Gains”.

The category “ Technical Fees” is less contentious and is generally recognized as any payment for technical services, which involves the application of technical knowledge, experience, skill, know-how, or processes availed by a “resident” from a “ Foreign Company”

Thus usage of various precedents, Court rulings, various judgements, interpretations have let to simplification of understanding the category as well as the nature of the product/services and ultimately has lessened the disputes involved.

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Applicability of Tax under Income Tax Act

Section 115A of the IT Act prescribes a tax rate of 10% on the payment of “Royalty” or “Technical Fees” to non-residents. The rate is exclusive of any surcharges or cess applicable to it. Though tax rates have been amended a lot many times finally government realized that a lower tax rate would encourage the budding entrepreneurs and facilitate introducing new technologies as well as Intellectual property leading to faster development of the economy.

However the non-residents need to have a PAN (Permanent account number) as per section 206AA of the IT Act, else tax deduction @ 20% would be required. Further, all such payments arising to a foreign company have also been excluded from the provisions of MAT (Minimum alternate tax), even if the final taxes being levied on such transactions is less than 18.5%. 

Though the silver lining is that such nonresidents are not required to file any returns of income, thus leading to lesser hassles and procedural compliances on the part of the income recipients.

Conflict Between Income Tax Act and DTAA (Double Tax Avoidance agreement)

Provisions relating to the taxation of income received by nonresidents of other jurisdictions are generally contained in the DTAA signed off between both the Jurisdictions. The rates of taxation under DTAA are either higher or equal to the rates prescribed under the IT Act. As per section 90 (2), either of the rates of DTAA or rates under the Income Tax act may be chosen by the nonresident, whichever is beneficial to him.

Section 90 (2) also prescribes that PAN is not mandatory for a non-resident even though the rates of taxes applicable are lesser under DTAA.  Though certain other documentation formalities need to be completed eg (i) Tax Residency certificate issued by the home country (ii) Declaration in Form 10F as prescribed by IT rules (iii) Self-declaration by non-resident in relation to a permanent establishment in India etc.  

Conclusion

The overall aspect of payments of “ Royalty” and “ Technical Fees” to nonresidents have clearly evolved over time. The evolution has taken place through various phases bringing more clarity on the usage, understanding, clarity of terminology, clarity of the nature depending on its use and various technical aspects. Clarity has also been achieved through various precedents, Court judgements, interpretation across the country and from other countries, rules, regulations etc.

Thus we see the changing aspect in terms of the finality of the various underlying usages.

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

The post Royalty and Technical Fees Payable to Foreign Nationals appeared first on iPleaders.

Executive Certificate Courses

Certificate Course in Legal Practice Development and Management

Certificate Course in Advanced Criminal Litigation & Trial Advocacy Certificate

Certificate Course in Consumer Litigation 

Certificate Course in Trademark Licensing, Prosecution and Litigation 

Certificate Course in Securities Appellate Tribunal (SAT) Litigation 

Certificate Course in Companies Act 

Certificate Course in Labour, Employment and Industrial Laws for HR Managers 

Test Preparation

Judgment Writing and Drafting Course for Judicial Services 

The post A Quest for Beauty, Art and Justice appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, LawSikho

Can we, as citizens, participate in law making? Can we influence legislations? Can we lobby for the creation of governance mechanisms that serve our purposes?

We do have a system where we elect politicians to the parliament and state assembly, who in turn can make such laws as per party lines and political agenda. However, once we have sent elected members to parliament or state assembly, we have no control over them any more, so to speak.

How can then, we still participate and get the laws made?

At least in three instances in India, social media and YouTube made a big impact on law making. There are of course other countries where social media led to entire revolutions.

At present, social media in the country is highly politicized. However, let’s say we are not interested in the usual political debate, but the focus is on law making that helps people, or to persuade the government of the day as well as the opposition to support our cause. How could it be done?

We live in an age when the battles of ideas and narratives have become the most important battles. Those who can take their ideas and narratives to most number of people, can get them to believe in those ideas and narratives and therefore get people to take actions usually win these battles.

Such a thing can only happen through building of a narrative, dissemination, building up of popular support, domination of public discourse and mindspace followed by political support.

In a way, this is no different from a battle of ads between two commercial product companies competing with each other and trying to occupy the mindshare of potential buyers. 

However, in case of law making and politics, the impact is far more serious.

Save the Internet was one of the most powerful campaigns in India that showed the power of an internet driven influencer campaign targeted at policy making. The campaign successfully foiled an attempt by Facebook to introduce Free Basics plan which would get internet service providers to treat traffic to different web services differently, thereby violating the principle of net neutrality.

Save the Internet campaign led to Indian government clearly drafting net neutrality policy that gave legal sanctity to the principle of net neutrality. 

The hallmark of that campaign was simple easy-on-the-eye youtube videos made by stand up comedians, movie stars and other influencers taking the issue to the common people and appealing to them to save the internet by coming together. These videos were widely disseminated, and in response, the common people wrote in large numbers to the Ministry of Information and Broadcasting demanding net neutrality be preserved in India. 

This resulted in a spectacular shift in government policy.

Another major spontaneous protest against the law that led to legal amendments in the Indian Penal Code was after the Nirbhaya case. There was outrage in the social media which led to physical protests, which were further fuelled by online petitions, videos, appeals and influencers. As the sentiment spread through social media like fire, it also influenced mainstream media, political debates and dominated conversations and public discourse which led the government to institute the Justice Verma Committee.

Some of the recommendations of this committee was implemented at a record speed by central government, which amended important provisions regarding crime against women.

Another very important instance that showed the power of social media and especially of information dissemination through video medium was shown when the government issued draft policies regarding making Hindi mandatory in all schools of India in its draft education policy. YouTubers in local languages made videos criticizing this move as a way to impose Hindi on non-Hindi speaking Indians, which again spread like wildfire through various social media.

What does the future hold?

Outrage is not enough, we need understanding. We need information literacy, otherwise we have also seen social media being misused to mislead people. However, the power of video as a mode of engaging with the common people with respect to policy making and legal reforms has been established. Perhaps we know no better way in human civilization to impact legal reforms in a democratic manner. 

What is needed?

Critical thinking is necessary – we must be able to separate myths, facts and opinions

Responsible video making and not mere chasing of views and subscribers 

Realising that slowly but surely we can make a big impact – by building a brand in the middle of chaos and noise

It may take longer to do genuine work as opposed to clickbait, but genuine content alone can build memorable brands in the long run

This is something we are exploring at LawSikho. We recognise the power of video, which is why are investing in video content in a big way. However, we will not stop there. Video making is the most powerful communication method for the world that is emerging. Lawyers who make great videos will have a very unfair advantage over the rest.

So we have begun to train our students is video making apart from writing articles. We want to create legal influencers and leaders. We are training the future leaders of the legal profession. We started by rolling out this training for our interns, and we plan to extend it to our students, numbering over 2000 at present.

I will share more details of our upcoming video training programs, which would be part of all our premium training programs just like writing training, tomorrow.

Join us and experience the future of legal profession and training.

Here are the courses in which enrollment closes on 31st August. Hurry up if you do not want to miss this batch:

Diploma in Cyber Law, Fintech Regulations and Technology Contracts  

Executive Certificate Courses

Certificate Course in Legal Practice Development and Management

Certificate Course in Advanced Criminal Litigation & Trial Advocacy Certificate

Certificate Course in Consumer Litigation 

Certificate Course in Trademark Licensing, Prosecution and Litigation 

Certificate Course in Securities Appellate Tribunal (SAT) Litigation 

Certificate Course in Companies Act 

Certificate Course in Labour, Employment and Industrial Laws for HR Managers 

Test Preparation

Judgment Writing and Drafting Course for Judicial Services 

The post Driving Legal Reforms and Law Making through Video Communication: What Does That Look Like? appeared first on iPleaders.

This article has been written by Mohit Kar, a student of the third year studying in Maharastra National Law University, Aurangabad.

Introduction

The Securities and Exchange Board of India (“SEBI”) vide a discussion paper floated on June 10, 2019 has made a detailed mention about informant mechanism related to regulation of insider trading in order to curb several challenges faced by the securities regulator. If you know someone making a quick buck out of trading in shares based on insider information, and you are willing to report it to the regulator, there may be a reward for you.  The mechanism that the capital regulator SEBI plans to introduce will provide “near absolute confidentiality along with appropriate safeguards”. The safeguard clauses would help bolster the mechanism for early detection of fraud and manipulation in insider trading cases. 

What is Insider Trading?

Insider trading is an activity that is done on the basis of unpublished price sensitive information (“UPSI”). UPSI refers to certain internal strategies that are implemented by a company and not revealed to the general public at large. Insider trading is outlawed since it allows persons with access to material non-public information to gain large amounts of profit. In, N. Narayanan v. Adjudicating Officer, SEBI, it was held that Insider trading curbs the market growth. Even if the quantum of the dealings is relatively less, it affects the overall integrity of the market. 

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India recognised the flaws of insider trading quite early. Hence, right from the year of 1947 with the formation of the Thomas Committee, India had made its first integrated effort to regulate it. The committee gave its recommendations in the year 1948, on the basis of which provisions related to regulating Insider trading were added to the Companies Act, 1957. These changes were not very effective in achieving the objective of preventing insider trading. Thus, on the basis of the recommendation by the Abid Hussain Committee, SEBI promulgated comprehensive legislation of the prohibition of Insider trading, Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. The Regulations were subsequently amended and gave way to SEBI (Prohibition of Insider Trading) Regulations in 2002. In 2015, SEBI put in place a new framework for prohibition of insider trading based on the report of an expert committee which has been amended since. Currently, the SEBI (Prohibition of Insider Trading) Regulations, 2015 (the 2015 Regulations) are applicable.

The most recent case of violation of the PIT Regulations is the NSEL scam. As a result of the investigation of the NSEL scam, multiple people were found guilty of the violation of the PIT Regulations. One such person against whole the SEBI ruled against was the then MCX’s director Hariharan Vaidyalingam, who was found guilty of insider trading under the PIT Regulations. In the adjudication Order passed by SEBI against Hariharan Vaidyalingam, it was held that:

“…hereby impose a monetary penalty of Rs. 1,25,00,000/-(Rupees One Crore Twenty Five Lakh Only) on the Notice, Shri Hariharan Vaidyalingam (PAN: AABPV4103E) under section 15G of  SEBI Act,  1992  for  the  violation  of  the  provisions  of Regulation  3(i) of  the  SEBI  (PIT) Regulations, 1992 read with Regulations 12(2) of the SEBI (PIT) Regulations, 2015 which will be commensurate with the violations committed by the Notice.”

Similarly, in the matter of Financial Technologies India Ltd. (“FTIL”), SEBI ruled against Naishadh P. Desai, the then Senior  Vice  President  & Company Secretary of FTIL, as he was found guilty of trading in securities of FTIL without taking  pre-clearance of trades, therefore violating PIT Regulations as well as the  Model Code  of  Conduct  for  Prevention  of  Insider  Trading  for  Listed Companies. In the adjudication order passed by SEBI against Naishadh P. Desai, it was held that:

“…hereby impose a monetary penalty of Rs. 12,00,000/-(Rupees Twelve Lakh  Only)  on  the  Noticee  i.e. Mr.  Naishadh  P.  Desai under  section  15HB of the SEBI  Act,  1992  for the violation  of the  provisions  of Clause 3.3.1 of Model Code of Conduct for Prevention of Insider Trading for Listed  Companies  specified  under Schedule I  of  Part  A  read  with  Regulations 12(1) of SEBI (PIT) Regulations, 1992 and Regulation 12 of SEBI (PIT) Regulations, 2015.”

The Whistleblower Mechanism

According to the paper, any informant willing to disgorge details of insider trading will be eligible for monetary considerations subject to SEBI’s pre-conditions. If the sum is at least 5 crores, then the informant would be entitled for monetary considerations. The monetary reward will amount to 10% of collected sum, but it will not exceed Rs.One (1) crore. There is also a provision for interim reward not exceeding 10 lakhs. The final reward will be made after the recovery of the sum and it will be disbursed from the Investor Protection and Education Fund (“IPEF”). The interim sum paid will be adjusted during the final reward.

The proposed mechanism will be laid down by amending the SEBI (Prohibition of Insider Trading) Regulations, 2015. Some of the salient features of the paper are as follows:

• • Voluntary Information Disclosure Form (“VIDF”): SEBI will make it mandatory for the informant to fill a Voluntary Information Disclosure Form. The VIDF will comprise among other things the credible, complete and original information related to insider trading including those pertaining to UPSI. The informant would be required to reveal the identity. The informant is however provided the option to maintain anonymity and secrecy. 
  • Disclosure of Source of Information: The informant will have to reveal the source of original information. He will be required to provide an undertaking that the information is not sourced from SEBI insider.
  • Office of Informant Protection (“OIP”): The establishment of Office of Informant Protection has also been proposed by SEBI. The OIP would function as a mechanism relating to receipt and registration of VIDF. It will also settle upon the issue of grant of reward to the informant upon completion of enforcement action and other related matters. As per SEBI’s proposed move, the OIP would act as a medium of exchange between the informant/ legal representative and the board. A hotline guiding and encouraging persons to file information shall be maintained.
  • Confidentiality of Informant: The informant will be provided the option to maintain anonymity and secrecy. The informant will nonetheless have to furnish VIDF through a representative who should be a practising advocate.

• Protection of Informant: As there is apprehension of complainants being victimized, the capital regulator has proposed that all listed companies and intermediaries would include in their code of conduct, provisions to ensure that such individuals are not “discharged, terminated, demoted, suspended, threatened, harassed, or discriminated against, directly or indirectly.”

• Maintenance of Hotline: OIP has been directed to maintain a hotline to act as a guide to persons to file information as per regulations but not to register any complaint or information. This hotline would make things simpler for a person willing to disgorge the necessary details.

• Exemption under the RTI: Section 8(1)(g) and Section 8(1)(h) of the Right to Information Act has maintained an exemption from disclosure of information for the purposes of law enforcement. The same principles would be applicable to the current policy.

Potential downsides of the mechanism

• The proposal has provided for both an interim reward and a final reward. But these rewards will only be disbursed once SEBI passes a final order against the person directed to disgorge the money. This implies that the grant of reward will only occur if there is successful enforcement of action, which will result in only a small number of whistleblowers receiving the reward.
• The financial incentives being provided might create a nuisance in itself; it could lead to expedient and uninformed parties to pass on rumours which might result in innocent parties getting their reputation hampered.
• The discussion paper has kept a threshold limit of 5 crore rupees for cases to come under its purview. This will lead to the exclusion of many of the smaller transactions from getting the necessary actions.
•  SEBI has made a mention about the regulatory action against frivolous and vexatious complaints. On a normal parlance, Insider trading cases are very difficult to prove, even the complainant himself fails to produce credible evidence. So there is a need of setting up of a proper metes and bounds as to what constitutes a frivolous complaint.
• In its outset, the paper has laid a provision for the formation of an additional wing of SEBI for investigation of such complaints. Such a process would be not only be time taking but also cost additional resources.      

Conclusion

While Insider trading losses are worth crores of rupees annually, the need to invest in whistle blowing has never been so obvious.

When implemented and applied correctly, whistle blowing mechanisms can be an effective component of an anti-fraud program. They prevent and deter such fraudulent activity and detect it on the spot. Unfortunately, these mechanisms are often misused. In some cases, they are set up, but then poorly communicated and, therefore, quickly forgotten. In others, employees simply do not use it because they do not trust management or the process, or for fear of reprisal or being sidelined. SEBI with the circulation of this paper and the proposed amendment to the 2015 regulations has made it clear about its intent to put a stop to the leakage of UPSI. This could lead to greater awareness amongst concerned individuals and garner benefits to regulators, but simultaneously it might bestrew SEBI’s attention with a large number of frivolous/vexatious complaints. 

The post Sebi’s Whistleblower Mechanisms: Can Insider Trading be Impeded appeared first on iPleaders.

This article is written by Nidhi Chhillar, a student of Vivekananda Institute of Professional Studies, GGSIPU.

Introduction

The advent of the internet has posed a threat to people in different ways. One of them is Copyright infringement. People can have access to millions of websites with just a click, post something on social media networks by altering somebody’s original work, a popular example of such alteration is the submission of research papers where researchers often use different sources to produce their work. People often copy someone else’s original work without having any authority to do so. Can the copyright holder bring an action for copyright infringement? What are the rights of a copyright holder? What are the remedies available with the copyright holder?

Copyright definition and Example

What is Copyright?

Copyright refers to the collection of rights that are automatically vested on the creator of the original work of authorship such as a literary work, music, movies or software. The copyright holder i.e. the creator of the original work has the right over his work, he can transfer his rights to others or keep full control over his work by not giving the right to anyone to copy or produce his work. 

Copyright has been defined in Section 14 of the Copyright Act, 1957 as an exclusive right to do or authorise the doing of any of the following acts in respect of a work or any substantial part thereof, namely:

1. Reproduce the work in any form including storing the work in any form
2. Issue copies of the work to the public
3. Perform the work in Public
4. Make any cinematographic film in respect of the work
5. Translate the work
6. Make an adaptation of the work

Examples of Copyright

• Someone publishes the novel, then he gets the copyright for the novel.
• The makers of the film have a copyright over the film.

Why is copyright important

Copyright is important for various reasons, namely,

• Copyright legally protects the creator’s work
• Copyright helps the author to exercise control over his work
• It provides ownership to the creator of the work.

Purpose of Copyright

• To promote the progress of useful arts and science by protecting the exclusive rights of the creators.
• To provide incentive and reward to the creators for producing original content. The creators can be economically benefited by their copyrighted work and receive proper recognition. 
• To encourage the creators to come up with creative ideas.

What is eligible for copyright?

• Literary works
• Musical composition
• Dramatic works
• Choreographic works
• Graphics and Sculptural Activities

Scope of Copyright

• Copyright is provided for a wide range of expressions like literary works, Artistic work, music and Cinematography.
• Literary works include novels, books, newspaper articles, journals, research papers, magazines, instruction manuals.
• Artistic work includes painting, sculpture, diagrammatic representation, drawing.
• Music includes original music work and a specific combination of melody and harmony.
• Cinematography includes movies, tv shows, documentaries, television recording of events.
• It is provided for work and not for ideas.

Copyright Protection

Copyright protection is given to all original literary, artistic, musical or dramatic, sound recording and cinematography. The originality of the work is the prerequisite to claim for copyright. Original work means that the work has not been copied. A work is protected irrespective of its content or quality.

Registration for Copyright

It is not mandatory to register the work to claim copyright and it commences the moment the work is created. However, it is advised to register the work for better protection, it will serve as proof in a matter of dispute. 

Section 13 of the Copyright Act, 1957 states that the copyright can be given only for the original work. Copyright is usually provided for 60 years

Copyright Infringement 

What is Copyright Infringement?

Copyright infringement refers to the unauthorized use of someone’s copyrighted work. Thus, it is the use of someone’s copyrighted work without permission thereby infringing certain rights of the copyright holder, such as the right to reproduce, distribute, display or perform the protected work.

Section 51 of the Copyright Act specifies when a copyright is infringed. According to Section 51 of the Act, Copyright is deemed to be infringed if:

• A person without obtaining the permission of the copyright holder does any act which only the copyright holder is authorised to do.
• A person permits the place to be used for communication, selling, distribution or exhibition of an infringing work unless he was not aware or has no reason to believe that such permission will result in the violation of copyright.
• A person imports infringing copies of a work
• A person without obtaining the authority from the copyright holder reproduces his work in any form.

Copyright Infringement examples

• If a person uses someone’s song as background music in his/her music video then he could be made liable for copyright infringement.
• If a person downloads movies or songs from an unauthorized source then it will amount to copyright infringement.
• A person is free to record a TV program to view it later, but if he transfers or distributes it to others then it becomes a copyright infringement.

Copyright infringement elements

• The work was the original creation of the author
• The defendant actually copied the work of the author. It is important to note that not all factually copying is legally actionable. The substantial similarity between the works of the author and the defendant has to be established to prove that the defendant has infringed the author’s copyright.

Copyright Issues

There are a number of issues that can arise in Copyright. These are discussed below:

• Plagiarism

Someone may copy the copyrighted material and pretend it to be his original work. People are allowed to quote the work or refer the work but the person who is using the copyrighted work has to give the credit to the copyright holder.

• Ownership

The issue of ownership may arise when an employer works for an organisation. In such case who has the copyright over the work? If a person is an employer then it is the organisation which has the copyright over the material but if a person is a freelance writer then it is the person himself who is the sole owner of the copyrighted material.

• Derivative Works

Derivative works use the already existing work of someone. It is a new version of already existing material. For example, translating a book into another language. A person requires a license for it but if he has not obtained the license for it then he can be made liable for copyright infringement.

Types of Copyright Infringement

Copyright infringement can be broadly classified into two categories:

1. Primary Infringement
2. Secondary Infringement

Primary Infringement

Primary infringement refers to the real act of copying the work of the copyright holder. For example, photocopying a book and then distributing it for commercial purposes. 

However, sometimes a person may only copy a part of the work, for example, a paragraph of an article. In such a case, the copyright holder is required to establish two things:

• Substantial Taking

A copyright is infringed only when an unauthorized person copies a substantial part of the work. For example, copying a catchy phrase of a lyricist. 

While deciding the case, the court also tries to conceive, how an ordinary person will perceive the work. If an ordinary person will perceive that the work is copied from a different source then it will be considered infringement.

If the writing style, language and errors are similar to the copyrighted work then it will serve as evidence of copying in a court of law. The minor alterations made by the person in the work of a copyright holder will not affect the claim of infringement.

• Casual Connection

The copyright holder must prove that there is a similarity in the works of the copyright holder and the infringer. However, this may be because of several other reasons like both of them have used the same source for the research. In such a case, the copyright holder can not claim for infringement.

Secondary Infringement

Secondary Infringement refers to the infringement of copyright work without actually copying it. This can happen in the following ways:

• Providing a place for Copyright Infringement

If a person provides the place or permits the place (for profit) to be used for communicating of the work the public and such work amounts to copyright infringement then such person can be made liable for the offence of copyright imprisonment. However, if the person is unaware or has no reason to believe that the place is used for copyright infringement then cannot be made liable for the same.

It is important to note that the person should let the place for “profit” to be made liable for copyright infringement. If an NGO lets the place then the NGO cannot be made liable for the same.

• Selling Infringing Copies

If a person sells the copies that infringe the right of the copyright holder then it will amount to copyright infringement.

• Distributing Infringing Copies

When a person distributes infringing copies of the copyright holder works then it will amount to copyright infringement. For example, if a person uploads a movie on the internet for free then it is an infringement of copyright.

• Importing Infringing Copies

Importing the infringed work of the copyright holder in India also amounts to infringement of Copyright. However, if the person has imported the infringed work for the domestic or personal use then it will not amount to Copyright Infringement.

Ownership of Copyright

Initial Ownership

The initial ownership belongs to the creator of the work itself. Thus, for example, if a person A has written a novel P then initially it is the A himself, who is eligible for the ownership, thus, no one else other than A can claim the ownership on the novel.

The work made for Hire rule

If a person hires someone for the creation of the work then it is the hirer or the employer who is the owner of the copyrighted work and not the person who has originally created the work unless there is an agreement to the contrary.

Joint Ownership and Authorship

If two or more authors have worked together to create a work then the authors will get joint ownership over the work.

Assignment

Assignment refers to the transfer of copyright ownership. A person or a company to whom the rights are assigned is known as assignee. In this case, the Assignee become a owner.

Rights of Copyright owners 

Certain Rights are given to the copyright holder under the Copyright Act, 1957. These rights are discussed below:

Right to Reproduction

The right to reproduction allows the copyright holder to make copies of his work in any form. The copyright holder can also bring legal action against the person if he reproduces his work i.e. download or copies his work in any format for commercial purposes.

Right to distribute

The copyright holder has the right to distribute his work in a manner he deems fit. He is also entitled to transfer his rights or some rights. For example, he may allow someone to translate his work.

Right to make derivative works 

The copyright holder has the right to derivative works. Thus, if a person wants to make a movie based on a novel then he should take permission from the author of the novel to do so or it may result in copyright infringement.

Right to publicly perform

The copyright holder has the right to perform his work publicly i.e. a writer of a novel may showcase his work by performing drama or concert. 

Right of Paternity

The right of paternity allows the copyright holder to claim authorship of the work. The author can claim due credit for his work, thus for example, if a movie is based on a novel but the maker of the movie does not acknowledge the author of the novel then the author can bring an action against the makers.

Sui Generis Right

This right is available to the creators of the database and software. The right exists for a period of 15 years.

Copyright Exceptions

Quotation, Criticism and Review

If a person uses the quotes of the copyrighted work then it will not amount to infringement. Similarly, a person may cite examples of the published work to criticize it or review it.

Criteria for using the exception

• The reason for using the material is genuinely for the purpose of Quotation, Criticism and Review. For example, one cannot discuss the whole film in an article and then comment that he/she liked the movie. 
• The material which is used for review or criticism should already be available to the public. Thus, a person cannot use the material which is not made available to the public but is kept confidential.
• The use of the material should be fair. There is no legal definition of what is fair and what is not. The fair use of the material will depend on the facts and circumstances of the case.
• If a person has provided sufficient acknowledgement to the copyright holder then it would not amount to copyright.

Parody and Pastiche

Parody means to use the existing work of someone to create the humour or to use it for mockery. Some people may use the copyrighted work to make a critique while others may use it to draw attention to a social phenomenon. Use of work for parody and pastiche is not considered as a copyright infringement.

Test for Copyright Infringement

To test whether the work is copyrighted or not, the court follows the three-factor test. These three factors are:

1. Quantum of the work copied
2. Purpose of copying the work
3. The likelihood of competition between the two works.

News Reporting

A news reporter may sometimes use the copyrighted material to report the current event. For example, a news reporter may use a part of the video clip to report a current event. In this case, he is exempted from copyright infringement. There are certain conditions under which a news reporter is exempted from copyright infringement, the conditions are discussed below:

• The news reporter has not used the copyrighted photograph. The copyrighted photograph cannot be used for news reporting.
• The purpose of using the material should be genuine i.e. for reporting purpose only.
• There should be a fair use of the material.
• The news reporter has to sufficiently acknowledge the author of the copyrighted work.

Libraries

The libraries often lend readers the book for a certain period and make copies for its users. The librarians, in this case, cannot be made liable for copyright infringement.

Education

Another exception to copyright infringement is the use of copyrighted material for educational purposes. Sometimes the copyrighted material is used by the teachers to illustrate a point or make the student understand the concept then it is not a copyright infringement. Similarly, if a student uses the thoughts of someone to explain an answer in examination then it is not a copyright infringement.

Research and Private Studies

Researchers have to use various copyrighted sources for the research purpose. The researchers are allowed to use copyrighted material for research purposes, it does not amount to copyright infringement. Copyright allows making single copies or taking shorts extracts of the work for non-commercial purpose.  

Private Copying

Private copying refers to the copying of material from one device to another without infringing the right of the copyright holder. For example, one may copy a song from DVD to MP3 player for backup purpose.

Remedies for Infringement of Copyright

Under the Copyright Act, 1957 the copyright holder has two types of remedies:

Civil Remedies  

• Section 55(1) of the copyright act, provides that the copyright holder is entitled to remedy by way of injunction. The injunction is the most effective remedy in case of copyright infringement. Injunction refers to the judicial process by which one who is threatening the legal rights of someone is restrained to continue his acts or is ordered to restore the matter to the position in which they stood before the action.
• Section 55(1) of the copyright act, further provides that the copyright holder is entitled to damages for copyright infringement. The purpose of providing the damages to the copyright holder is to restore him to the earlier position. There are various factors that determine the amount of damages to be paid to the copyright holder. Generally, the damages are awarded for the amount that the copyright holder would have got if the person had obtained the license from him. However, there are various other factors as well, that determines the amount of damages like the loss of profit to the copyright holder, loss of reputation, decrease in the sale of the copyright holder’s work etc.

Criminal Remedies

• The copyright holder can take criminal proceedings against the infringer. The criminal remedy is not an alternative to the civil remedy but is complementary to it. Thus, the copyright holder can bring both civil and criminal proceedings simultaneously. 
• Section 63 of the Copyright Act, states that copyright infringement is a criminal offence.

Conclusion

To sum up, the purpose of copyright is to protect the rights of the creator and provide the incentives and economic benefits to the creator. The scope of copyright extends to the literary or artistic works which demands creativity including Database and computer software. The registration of work is not necessary to be eligible for copyright however, it is often advised to register the work because it serves as an evidence in the court.

If a person infringers the copyrighted work of someone then he will be liable for both the criminal liabilities and civil liabilities. However, there are certain exceptions to the copyright infringement i.e. in certain cases a person is not required to obtain the permission of the copyright holder to use his work. However, it is always advised to produce the original work and not to use someone’s copyrighted work without permission.

References

1. http://www.manupatrafast.com/articles/PopOpenArticle.aspx?ID=394e7bf3-9764-4ae9-a530-2713b4120a89&txtsearch=Subject:%20Intellectual%20Property%20Rights
2. http://www.rmlnlu.ac.in/webj/alok_kumar_ya dav.pdf
3. https://www.indialaw.in/blog/blog/law/analysis-of-doctrines-sweat-of-brow-modicum-of-creativity-originality-in-copyright/
4. https://info.legalzoom.com/forms-copyright-infringement-23122.html
5. https://www.copyrightuser.org/understand/exceptions/quotation/ 

The post Copyright Infringement appeared first on iPleaders.

This article is written by Soma-mohanty of KIIT School of Law, Bhubaneswar.

Who are senior citizens?

Senior citizen is a word used as a substitute for an old aged person. Senior citizen is generally referred to the persons who have passed through the retirement period or is a pensioner. The retirement period varies in the workplace depending upon the retirement policy of countries.

Senior citizens age in India

When a person who is a citizen of India and has attained the age of sixty years or more irrespective of the job status, is considered to be “senior citizen of India”

Senior citizen age in india for bank

When any person who is a citizen of India and the age of the person is above sixty years, then the person is considered a senior citizen in Indian banks.

Female senior citizen age for banks

When any female who is a citizen of India and the age of the female is above fifty-eight years, then the person is considered a senior citizen in Indian banks.

Problems faced by senior citizens in India

There are certain problems faced by  senior citizens because of different factors. Some of these factors are

Economic problems

In India, the pension schemes are variants depending on the rules and policies of their working place. Some of them receive a pension after retirement and some of them are not eligible to get a pension. Thus, after retirement,  senior citizens face a lot of problems. Generally, they receive half the money of their salary as a pension. Thus it becomes difficult on their part to manage the cost of living.

Old age is directly proportional to physical strength deterioration. Once a person touches the age of sixty years, their health deteriorates and the medical investment increases. Thus they suffer a lot to maintain their health check-ups, etc. this puts a deep effect on the economic problems of the senior citizens in India.

Physical and physiological problems

The possibility of deterioration of health in senior citizens is more than the younger generation. The senior citizens are more aligned to physical weakness. With age bone deterioration starts and many more changes take place in the body of a senior citizen, thus making them weak physically. In India old aged people are subjected to the economic crisis, thus they are not able to access regular health check-ups.

Psycho social problems

Everyone stays busy in their life either they are stuck with their job problems or a hectic job schedule. Thus, the younger generation does not get enough time to spend with their old parents. Being retired senior citizens do not have much work to do this, they seek for company, they want their children to talk to them. But because of the above-stated facts,   not possible and the old aged people are left isolated. Because of isolation they get into depression, they feel the inferiority that they are no longer useful. This causes psychological problems in senior citizens.

As people get well, their physical incapability restricts them to go out and talk to people, this reduces their social interaction. After retirement, it becomes difficult on their part to meet with new people. Friends of their age generally get bedridden or die and this decreases their interaction and ultimately they lose their social life.

Harassment of senior citizens

After retirement, the financial problems arise due to which senior citizens prefer to stay with their children. Most of the children’s attitude changes towards old parents these days. As they are not able to earn for the family anymore, they are treated as a useless person. Most of the children feel they are a burden to them and thus they start harassing their parents. Senior citizens are subjected to ill-treatment each and every time at home. Whenever they give suggestions, they are being shut down with harsh words. In India harassment towards senior citizens is increasing. News highlights popping out are more on the harassment, the senior citizen is subjected to. Senior citizens are to be respected, they have done a lot for the family, society and for country when they were young. Thus they should be treated with care and affection rather than been subjected to harassment.

Senior citizen harassment by daughter in law

In India, daughters are more entitled to their parents rather than in-laws. They love looking after their parents but when it comes to their in-laws they find it as a huge burden on them. When a girl comes to in-laws place after marriage it becomes difficult on her part to settle with the rules and regulations of a new place. Thus a feeling of dissatisfaction arises between the in-laws. The girl would be prohibited to do things, which she feels like a hindrance in her life. There is also a sour relationship between the daughter-in-law and in-laws. But when the in-laws become old and are completely dependent on the daughter-in-law, the past events reflect. Out of revenge she starts   as well as harassing them. This situation is increasing in India, so to put a check on it certain laws have been made as well as amended.

Article 25 UDHR

Article 25 of the Universal Declaration of Human Rights says that every person who is subjected to unemployment, sickness, disability, widowhood, old age 

Human rights of older people

• The Right to life of older people is to be safeguarded by law.
• The older people are entitled to Right to Liberty, which means that every citizen of India should live his life full of liberty.
• The older people are entitled to Right not to be subjected to inhuman treatment, which means that every senior citizen of India should not be treated inhumanely.
• The older people are entitled to Right to a fair hearing, it means that the tribunal should efficiently look into the matter and give a verdict free from malice.

Laws to protect the elderly

There are certain laws enacted to protect elderly persons from cruelty, ill-treatment and harassment.

Senior Citizen Act 2017

The Senior Citizen Act 2017 was enacted in the year 2007 and it was initiated by the Ministry of Social Justice and Empowerment, Government of India. The objective behind the enactment of this act was to provide justice and maintenance to the senior citizens as well as to look after the welfare of the senior citizens. It aims to protect the life and property of senior citizens. This Act provides shelter for old aged people as old age homes.

Maintenance of Parents and Senior Citizens

The Senior Citizen Act 2017 provides maintenance to the senior citizens as well as parents, who are not able to meet up their cost of living. Under The Senior Citizen Act 2017, children, grandchildren as well as relatives are under obligation to look after the maintenance of their parents (father, mother, or both), grandparents.

Any person who was not entitled according to the provisions as mentioned in The Senior Citizen Act 2017, can seek the help of the Tribunals to get justice under The Senior Citizen Act 2017.

Protection of life and property of Senior Citizen

If any senior pass his property it may be movable or immovable to any person in the form of gift and the property is a way of earning to the old person and the person has been promised that he would receive the amount, but after the transfer of property the person was not provided with the promised amount. Then, the transfer of property would be considered void in the grounds of fraud, coercion or undue influence.

Fundamental rights of senior citizens

Laws under Indian constitution

Article 41 of the Constitution of India provides provision for the betterment of old aged people. According to this article, the state is entitled to provide public assistance in the matter of old people under its economic capacity.

Maintenance and Welfare of Parents and Senior Citizen Act, 2007

Objective

•  The objective behind the enactment of this act was to provide justice and maintenance to the senior citizens as well as to look after the welfare of the senior citizens. 
• It aims to protect life and property of senior citizens. 
• This Act provides shelter for old aged people as old age homes.
• This Act provides economic as well as a speedy trial for the senior citizens to get their right of maintenance.

Definitions

Certain words mentioned in the Maintenance and welfare of parents and senior citizen Act, 2007 are defined below

• Maintenance 

Here providing food, clothing, a place for shelter, medical assistance and treatment expenses are defined as maintenance.

• Parent 

Parents   including the father as well as the mother. Father or mother can be biological parents, adoptive and stepfather or stepmother.

• Children 

Here children refer to son, daughter, grandson, granddaughter. Minors are not included in the definition of this act.

• Senior citizen

Any person who is a citizen of India and has attained the age of sixty is referred as a senior citizen.

• Relative 

When a senior citizen does not have a child of their own and there is a legal heir to take up the person’s property or inherit it, would be considered as relative to the senior citizen.

• Welfare 

Welfare refers to the availability of necessary amenities such as food, healthcare, etc. to the senior citizen.

Maintenance of parents and senior citizens

The Senior Citizen Act 2017 provides maintenance to the senior citizens as well as parents, who are not able to meet up their cost of living. Under The Senior Citizen Act 2017, children, grandchildren as well as relatives are under obligation to look after the maintenance of their parents (father, mother, or both), grandparents.

Any person who was not entitled according to the provisions as mentioned in The Senior Citizen Act 2017, can seek the help of the Tribunals to get justice under The Senior Citizen Act 

Protection of life and property of senior citizens

If any senior pass his property it may be movable or immovable to any person in the form of gift and the property is a way of earning to the old person and the person has been promised that he would receive the amount, but after the transfer of property the person was not provided with the promised amount. Then, the transfer of property would be considered void in the grounds of fraud, coercion or undue influence.

Code of criminal procedure

• In early 1973, there was no provision laid down by the Code of Criminal Procedure for the maintenance of parents. But in the year 1973, Section 125 of the Code of Criminal Procedure was inserted for providing maintenance to parents. Under this section, the parent needs to establish the fact that the person has been neglected by their children or the person is denied of maintenance.
• The Code of Criminal Procedure, 1973 is secular law, thus it is applicable to persons belonging to any religion or community.
• Under this Section, married daughters are even responsible for providing maintenance to their parents.

Personal laws

Hindu Adoption and Maintenance Act, 1956

The Hindu adoption and maintenance act, 1956 was enacted in the year 1956 in India as a part of the Hindus Code Bills. The main object behind the Hindu adoption and maintenance act, 1956 was to provide maintenance to various family members, which included parents.

According to Section 20 of the Hindu adoption and maintenance act, 1956, if a person’s parents are not able to maintain their livelihood from earning or other property, then is entitled to receive maintenance from the child.

Muslim laws

According to the Muslim Law, it is the duty of both the sons as well as daughter to look after for the maintenance of their parents. The Islamic principle states that as parents are obliged to look after the maintenance of their children, children are also obliged to look after the maintenance of their parents likewise. Parents who are needy can only be protected under the Muslim Act for maintenance.

Christian and Parsi laws

There is no provision under the Christian and Parsi laws for the maintenance of the parents. Thus any parents seeking maintenance would be given justice under the statutory section of Code of Criminal Procedure.

Senior citizens benefit in India

Government schemes for senior citizens

The schemes provided by the Government for senior citizens are

Integrated Programme for Older Persons (IPOP)

The Ministry of Social Justice and Empowerment looks after the running of the Integrated Programme for Older Persons. The main objective of the scheme is to provide a quality lifestyle to senior citizens of India by giving them access to basic amenities like food to eat, shelter to live, medical care for treatment, source of entertainment so that they do not feel isolated. It also provides support for the senior citizens who are actively involved in activities like production of materials, etc by State/ UT Government/Non-Governmental Organisations (NGOs)/ Panchayati Raj Institutions (PRIs)/ local bodies and the community at large.

Rashtriya Vayoshri Yojana

Rashtriya Vayoshri Yojana is a scheme of Central Sector, which is funded by the Government of India. Rashtriya Vayoshri Yojana scheme aims at providing physical aids and assisted-living devices for Senior citizens who comes under Below Poverty Line (BPL) category.Rashtriya Vayoshri Yojana scheme provides free assisted living aids as well as physical devices which are required for sustainability. Under Rashtriya Vayoshri Yojana scheme assistive living devices are provided to the BPL holder senior citizens by Artificial Limbs Manufacturing Corporation in India (ALIMCO), who are suffering from disabilities like low vision, hearing problem, loco-motor disabilities. They provide devices like walking sticks, elbow crutches, walkers, crutches, tripods/quad pods, wheelchair, spectacles,hearing aids, etc. 

Indira Gandhi National Old Age Pension Scheme (IGNOAPS)

Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is introduced by the Ministry of Rural Development of India in association with National Social Assistance Programme (NSAP). It is a non-contributory pension scheme. The main objective of Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is to provide pension to Indians who have attained the age of sixty years and it includes both people who are above the poverty line as well as people living below the poverty line. The pensions received by the senior citizens under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) scheme is of two types.  People between the ages of 60-79 receives Rs 300 as pension and people above the age of 80 receives Rs. 500.

The Pradhan Mantri Vaya Vandana Yojana

The Government of India has introduced The Pradhan Mantri Vaya Vandana Yojana scheme in the year 2017. This scheme provides security to individuals during their old age. According to the provisions of this policy, an individual on the deposition of Rs1.50,000 would get a minimum pension of Rs 1000 per month and on the deposition of Rs 7,50,000, the individual is entitled to get a sum of Rs. 5000 per month. Every policyholder is eligible to receive the rate of interest on the sum of money deposited. 

National Programme for the Health Care of Elderly (NPHCE)

The Ministry of Health & Family Welfare has introduced the National Programme for the Health Care of Elderly (NPHCE).  The main objective is to provide facilities in the district hospitals. Facilities provided under the National Programme for the Health Care of Elderly (NPHCE) scheme are

• Opening of geriatric OPD
• Opening of geriatric ward at District hospital.
• At the community health center,   clinics are opened
• At primary health care, weekly   clinics are opened

Senior citizen card India

Various facilities are provided to the senior citizens of India. Thus various states are providing senior citizen cards to the senior citizens so that they can avail the schemes and their benefits provided for their betterment by the Government of India.

Eligibility

1. The person needs to be a citizen of India to avail the senior citizen card.
2. The person should have attained the age of sixty to avail the senior citizen card.
3. The person should produce Government documents as proof showing that the person is a permanent resident of the State.

Senior citizen card online

Certain procedures have to be followed while applying for senior citizen card online

• Online form for submitting the application for applying the senior citizen’s card is available on the official websites of each state.
• The applicant applying for the senior citizens’ card has to attach two photographs of his own to the application form.
• The application form should be attached with the address proof of the applicant.
• The application form should be attached   the age proof of the applicant.
• Then the applicant needs to proceed with the registration process.
• Then after the registration process is completed, it is submitted for verification and once verified the application is approved.
• After the approval, the person gets the Senior Citizen Identity Card.

Senior citizen pension

After retirement or attaining the age of sixty, the old aged people face a lot of economic problems, due to which the Government of India has taken initiative to provide assistance to the Senior Citizens of India.

Post-retirement benefits for employers of the central government

When a Central Government employee retires after attaining the age of retirement in fulfilling the service condition of a minimum 5years would be eligible to enjoy the retirement benefits.   retirement benefits are also known as retirement gratuity. The process in which the retirement gratuity is calculated as 1/4th of a month’s Basic Pay is added to the Dearness Allowance (DA) drawn on the date of retirement for each completed six months period of the qualifying service. The retirement gratuity that an employee is subjected to 33years of employment is 16 times of the Basic Pay plus Dearness Allowance (DA), subjected to the maximum amount of Rs 20 lakhs. 

National pension system

It is the voluntary contribution system in India. This scheme was designed for government employees only.

Atal Pension Yojana 

Atal Pension Yojana was previously called as Swavalamban Yojana. Atal Pension Yojana’s  objective is to provide security to the people who would be retiring and to promote savings as well as investment. The Government of India also co-contributes  50% of the contributions made by the subscribers. This facility by the Government of India is only available for the users who are not covered under any Statutory Social Security Schemes as well as is not an Income Taxpayer.

Eligibility 

• Any person holding a bank account can be benefited under the Atal Pension Yojna.
• The minimum age of joining Atal Pension Yojna is 18years and the maximum age of joining Atal Pension Yojna is 40years.

How to apply for old-age pension online

The process of applying an application for old age pension online differs from state to state.

The process of application of Delhi is

• For registration of old age pension, the applicant has to visit the official site that is portal of Government of NCT of Delhi.
• Then the applicant has to fill the application which is the Old Age Pension Scheme application as prescribed.
• The applicant needs to fill the Aadhar card number.
• The applicant needs to attach the records required to be scanned with the application form.
• The applicant needs to   documents needed to be attached with the application form.
• Then after submission of all the documents required with the application by the applicant, the following documents are to be scrutinized by the District Social Welfare Office.
• The applicant may be called for verification after the submission of the online form.
• After the approval, the applicant shall receive assistance in his bank account.

Indira Gandhi national old-age pension scheme

Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is introduced by the Ministry of Rural Development of India in association with National Social Assistance Programme (NSAP). It is a non-contributory pension scheme. The main objective of Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is to provide pension to Indians who have attained the age of sixty years and it includes both people who are above the poverty line as well as people living below the poverty line. The pensions received by the senior citizens under the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) scheme is of two types.  People between the ages of 60-79 receives Rs 300 as pension and people above the age of 80 receives Rs. 500.

Eligibility 

• The applicant applying for the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) should have attained the age of sixty years.
• The applicant applying for Indira Gandhi National Old Age Pension Scheme (IGNOAPS) should be under the category of the Below Poverty Line (BPL).
• The person holding a Below Poverty Line (BPL) card with multiple disabilities between the age limit of 60-79 years of age are not eligible to apply for Below Poverty Line (BPL)

Indira Gandhi national old-age pension scheme application form

1. The applicant needs to get the application from the Social Welfare Department of the specified area.
2. The applicant needs to fill the information as provided in the application
3. The applicant needs to attach an annual income certificate as well as a domicile certificate document with the application.
4. The application should be submitted to the Tehsil Social Welfare Officers. Any applicant belonging to urban areas can directly submit their application form to the District Social Welfare Officer.
5. Then the application submitted is verified by the officers.
6. Then the District Social Welfare Officer would be recommended by the Social Welfare Department on the beneficiaries to be provided.
7. At last the final decision for sanction to be granted shall be made by the committee named as District Level Sanctioning Committee (DLSC).

Tax benefits for senior citizens in India

Definition of senior citizens for income tax

Any person who attains the age of 60 years at any time during a financial year, would be defined as “Senior Citizen” according to the Income-tax Act,1961. 

But any person who attains the age of 80 years would be defined as “Very Senior Citizen” according to the Income-tax Act,1961. 

Standard deductions for senior citizens

According to the Budget 2018, certain exemptions are provided to the senior citizens of India such as

• Tax exemption limit for interest income from banks from Rs 10,000 to Rs 50,000.
• Tax exemption limit for interest income from post offices from Rs 10,000 to Rs 50,000.
• The tax break on health insurance as well as medical expenditure is increased.

80c deduction for senior citizen

Every Senior Citizen of India is eligible for the deduction provided under the Section 80c of the Income Tax Act, 1961 according to the provisions of the Senior Citizens Savings Schemes rules, 2004.

Income tax for pensioners

Income tax paid by Senior Citizens above the age of 60

Income tax paid by Super-Senior Citizens above the age of 80

Insurance schemes for senior citizens

Certain insurance schemes are introduced for the benefit of senior citizens of India, such as

Government health insurance for senior citizens

Rashtriya Swasthya Bima Yojana

Rashtriya Swasthya Bima Yojana is a health insurance program framed for the poor needy people by the Government of India. Senior Citizens are benefited by the top-up of Senior Citizen Health Insurance Scheme (SCHI) over the Rashtriya swasthya bima yojana. Every citizen of India above the age of 60years who are considered as “senior citizens” would be benefited under this. Under this scheme, each senior citizen of India would be provided Rs 30,000.

Varistha mediclaim for senior citizens

Varistha Mediclaim Policy is a health insurance plan that can be availed by the senior citizens of India but the age limit should be between 60years to 80 years. The main objective of the Varistha Mediclaim Policy is to cover a wide range of diseases and to provide insurance for hospitalization.

Varistha Mediclaim Policy provides coverage of Rs. 2,00,000 for critical illness and Rs. 1,00,000 for hospitalization to the senior citizens of India. It also provides assistance to the senior citizens in organ transplantation but the amount to be covered under it is limited. It also provides coverage for ambulance services availed by the citizen of India during emergency. The critical illness that is covered under this policy are cancer, artery surgery, heart strokes, paralysis, and renal failure.

Varistha Mediclaim Policy validity period is one year, it requires to be renewed every year. And once the application for the policy is submitted, the person gets the policy activated within 30 days.

HOPE- Health Of Privileged Elder

Hope- health of privileged elder is a type of policy provided to the senior citizens of India, for the coverage of specified medical treatment and illness.

Eligibility criteria

• The policy can be availed only by senior citizens of India who have attained the age of 60years.
• It is mandatory for the applicant to submit a medical report from an authorized diagnosis center as mentioned by the insurer.
• The diagnosis report should consist of a glycosylated   test, urine test, eye test, X-ray reports, etc.

Coverage provided

• Disease specified in the norms of the policy can only be covered under this policy.
• This policy provides coverage only if the person is hospitalised and the treatment is done in India.
• The limitation amount for cashless hospitalisation is Rs. 1 lakh.

The amount that can be covered

• The minimum amount that can be covered under this policy is Rs. 1 lakh per year.
• The maximum amount that can be covered under this policy is Rs. 5 lakh per year.

Group medical insurance scheme

Group Medical Insurance scheme covers any group/ association/ institution/ corporate body which has more than a hundred people and a central administration point. The policy provides coverage for hospitalization charges. It also provides coverage for domiciliary expenses during hospitalisation. It provides coverage only for medi-claims. The sum insured under this policy varies from Rs. 15,000 to Rs. 5,00,000 and the premium package varies from Rs. 175 to Rs. 12,450.

Eligibility

An individual would be eligible to hold the policy if he is between 5-80 years of age.

Jan Arogya Bima Scheme

Jan Arogya Bima scheme is the policy introduced in the year 2018 by the Central Government of India in association with Ayushma Bharat Mission in India. The main objective of Jan Arogya Bima scheme is to look after the primary, secondary as well as tertiary care systems. Jan Arogya Bima scheme covers both preventive as well as promotive health. It aims at providing medical expenses to the people of India including senior citizens too.

Senior Citizen Mediclaim Policy

Senior citizen Mediclaim Policy is provided by both private as well as public sectors. The Mediclaim Policy provides coverage to the senior citizens on treatment, surgery and medical injury. The Mediclaim Policy can be availed by the senior citizens between the age group of 60-80 years. The Mediclaim Policy provides coverage to Rs. 1.5 lakhs. The Mediclaim Policy plan can cover both the person as well as their spouse till they attain the age of 90 years.

Before receiving the facilities of the Mediclaim Policy, the customers’ pre-health check-up would be done and the expenses are to be paid by the customer himself.

Benefits 

• The senior citizen’s Mediclaim Policy covers the expenses of pre-hospitalisation as well as post-hospitalisation in case of accidents as well as critical illness.
• The senior citizen’s Mediclaim Policy provides cashless treatment, which means that the policymakers directly deals with the hospitals to cover the expenses during the treatment.
• In the case of pre-hospitalisation, the Mediclaim Policy covers expenses within 30days before hospitalization. And in the case of post-hospitalisation, the Mediclaim Policy covers expenses up to 60days hospitalization charge as well as expenses.
• The policyholder can claim 25% of the assured sum for the fees of the surgeon, anaesthetist, medical practitioner and consultant.
• In Mediclaim policy an extra service is provided. It covers blood pressure, hypertension and diabetes patients but they need to get a premium package for this by paying an extra sum of money.
• In Mediclaim policy it covers emergency ambulance expense up to Rs. 1000.
• The Mediclaim policy also covers the expenses of the treatment of a chronic disorder. But the policyholder has to pay an extra charge of 10% premium.
• If the policyholder does not claim for coverage for continuous 4years, then the person is given renewal benefit. In renewal benefit, a complete reimbursement of health check-up is offered.
• In Mediclaim policy  10% discount is offered to the person on their spouse’s premium.
• The Mediclaim policy covers Osteoporosis, Osteoarthritis, joint replacement and knee replacement.

Banking facilities

Special rate of interest

Rate of interest provided to senior citizens on fixed deposits

Senior citizen saving scheme account

The Senior Citizen Saving Scheme (SCSS) aims for the betterment of the senior citizens of India by providing them with regular income through long-term savings.

Benefits 

• The applicant can easily register for it.
• Tax benefit is provided to the senior citizens under Section 80c of the Income Tax Act through this scheme.
• The applicant is free to select the package of investment.
• The rate of interest the senior citizens receive from this scheme is generally high.
• There is scope for opening multiple Senior Citizen Saving Account.

Eligibility criteria 

• A person would be eligible to hold a Senior Citizen Saving Account, only if the person has attained the age of 60years.
• A person would be eligible to hold a Senior Citizen Saving Account at the age of 55years when he has availed retirement on the basis of superannuation.
• A person who is retired from Defence Service would be eligible to hold a Senior Citizen Saving Account.
• Non-Resident Indians are not allowed to hold a Senior Citizen Saving Account.

Banks offering Senior Citizen Saving Account

1. State Bank of India
2. Punjab National Bank
3. ICICI Bank
4. Union Bank of India
5. IDBI bank
6. Indian Overseas Bank
7. Canara Bank
8. UCO Bank
9. Syndicate Bank
10. Central Bank of India
11. Allahabad Bank
12. Bank of Baroda
13. Bank of India
14. Indian Overseas Bank
15. Dena Bank

Life plus senior citizen account

Features

• A high rate of interest is provided by the Life Plus Senior Citizen Account.
• Life Plus Senior Citizen Account provides unlimited card transaction 
• The debit card is provided at free of cost.
• Life Plus Senior Citizen Account provides a money multiplier facility.
• Life Plus Senior Citizen Account provides banking everywhere.
• Life Plus Senior Citizen Account provides free internet banking   as well as mobile banking services.
• Life Plus Senior Citizen Account provides the facility of nomination.

Privileges 

• A free SMS facility is allowed.
• Special Senior Citizens Desk
• Special Senior Citizens Desk “life Plus” debit card

Health securities

LIC Jeevan Akshay 

This type of policy is based on an immediate annuity plan, which means a person does not have to wait to receive the money after completion of deposits from a certain period of time. This policy can be bought on the deposition of a huge sum of money.

Characteristic

• The premiums are paid in a huge sum.
• The minimum purchase value of this policy is Rs. 1,00,000 (offline).
• The minimum purchase value of this policy is Rs. 1,50,000 (online).
• There is no maximum limit for buying a policy.
• The individual who is more than 85years   not eligible to get the policy.
• The individual who is more than 30years is eligible to get the policy.

Private health insurance

These are the private sectors providing private health insurance

ICICI Lombard Overseas Travel Insurance 

ICICI Lombard Overseas Travel Insurance is a very unique type of policy with more reliable facilities. ICICI Lombard Overseas Travel Insurance this policy covers urgent medical and non-medical expenses when a person is abroad. This policy of ICICI Lombard Overseas Travel Insurance can be availed by senior citizens of India between the age of 71-85 years. The validity of the policy is 180days. 

Benefits provided

• It provides cashless medical service to people abroad.
• The claim benefit covered under this policy for illness as well as the injury is $15,000.
• If an individual is having ICICI Lombard Overseas Travel Insurance, he can claim for the loss of Checked In Baggages as well as handbags.
• The validity of the policy can be extended to another 180 days.

ING Golden Years Retirement Policy 

ING Golden Years Retirement Plan is a Regular Payment Deferred Variable Annuity Plan. It is a Non-linked Plan from ING Life Insurance Company.

Features 

• ING Golden Years Retirement Plan is a negotiated annuity plan
• This policy has no bonus facility.
• 1% of compound interest is provided to the pension account.
• During the first five years of the policy, the pension account is provided with compound interest of 4% per annum. Then after the completion of the first five years 1% compound interest is provided.
• The premium payment term can be altered easily in this plan.
• Choosing the retirement date depends on the policyholder, the person can choose the date of the payout.

Smart Invest Pension Plan 

Smart Invest Pension Plan is introduced by Max Newyork Life Insurance Company Limited.

In this type of policy if offers the scope of accumulation of sum of money through limited pay and the person is not charged with allocation charges. This policy offers up to 300% of the premium as maturity bonus depending on the policy bought by the policyholder.

Aviva New Pension Elite 

Features

• In the first year, there is a high allocation charge
• The percentage of the annualised premium of the first year is considered as the maturity addition and it depends on the term of the policy.

Eligibility criteria

• The person would be considered without the term ridder if he is more than 18years and not more than 70years of age.
• The person would be considered with the term ridder if he is more than 18years and not more than 50years of age.
• The person would be considered to have attained the maturity age if he is more than 40years and not more than 80years of age.
• The person would be able to avail annual premium policy if the minimum amount is Rs. 50,000 and there is no maximum limit,
• The person would be able to avail top-up premium policy if the minimum amount is Rs. 1,000 and there is no maximum limit.

New Jeevan Dhara

New Jeevan Dhara policy is introduced by LIC. it is one of the Deferred Annuity plans that permits the policyholder to get regular pension after the depicted term.

Process of premium collection

• It is payable yearly, half-yearly, quarterly, monthly.
• Premium is collected through deduction of salary.
• The premium can be collected throughout the policy until death.
• The single premium can also opt.

National policy on older persons

National policy on older persons aims to provide a better way of living for  older persons. It was introduced in the month of January in 1999. It seeks the help of the State to provide financial security, food security, health care, shelter, equitable share in the development, protection against harassment and cruelty. It also ensures that every older person is availing the facilities provided.

Objectives

• It tries to make people understand the advantages of planning for their old age as well as their spouse’s
• It motivates people to take care of their parents in old age.
• It motivates the non-governmental organisation to provide additional care to older people.
• It takes initiative to take care of the older age people as well as protect them from cruelty and harassment.
• It aims to provide training to the personal assistants who look after the health and care of the old aged persons.
• It aims in creating awareness between the elderly persons to lead productive and independent livelihood.

Implementation strategy

• National policy on older persons makes the preparation of Plan of Action.
• National policy on older persons is involved in setting up separate Bureau for older people in the Ministry of Social Justice and Empowerment.
• National policy on older persons forms Directorates of Older Persons in the States.
• National policy on older persons takes public review on the implementation program of the policy.
• National policy on older persons aims to establish an Autonomous National Association of older people.
• National policy on older persons encourages local self Government to participate.

Facilities are given by different departments of government

National council for senior citizens

It was seen that the cruelty and harassment towards the senior citizens was increasing and no proper steps were taken to provide justice to the senior citizens. Thus, the National Council for senior citizens took an initiative to resolve the issue. The National Council for senior citizens advise the Central as well as State Government in providing better provision for the welfare of senior citizens and improve in the workings of the committee.

Objectives

• It advises the government in the development of policies.
• It advises the government regarding the running of policies.
• It provides feedback on the implementation of programmes.
• It provides nodal points at every national level for solving the grievances of senior citizens.
• It works as an agent between the older people and the Government of India. It hears to their problems and conveys it to the government.

Legal help for senior citizens

With growing cruelty and harassment towards the senior citizens, the Indian Government enacted The Maintenance and Welfare of Parents and Senior Citizens Act in the year 2017. It aims to provide maintenance for the senior citizens.

• The objective behind the enactment of this act was to provide justice and maintenance to the senior citizens as well as to look after the welfare of the senior citizens. 
• It aims to protect life and property of senior citizens. 
• This Act provides shelter for old aged people as old age homes.
• This Act provides economic as well as speedy trial for the senior citizens to get their right of maintenance.

Fast track court for senior citizens

The number of cases are increasing thus the hearings are being delayed. It is seen that people above the age 60years get frustrated because of the pending case. Thus, it increases their mental as well as physical pressure affecting their health. Keeping it in view the Union Government declared that the cases of senior citizens would be referred by the Fast Track Courts (FTCs).

Conclusion

Old age is always compared to the childhood. It is difficult for parents to take care of their children, to meet their expenses but they still do with all their hearts. So the child should always remember what his or her parents have done for them. They need to enjoy the childhood period of their parents. It is their duty to provide their parents with all the facilities they need to. Government is more concerned about the younger generation as they are the pathway to development. But it should not forget the people who contributed their whole life for the government of India and for the country. Thus, the Government is taking necessary steps to develop the provisions for the Senior citizens. It safeguards their right to life, property, etc. The steps taken would make the life of Senior Citizens more swift and they can have access to the facilities easily. The provision for pension, mediclaim policies, exemption in tax are some of the facilities provided to the Senior Citizens from the Government of India. It aims for the betterment of the senior citizens.

The post Rights of Senior Citizens appeared first on iPleaders.

This article is written by Shatakshi Pathak of DME, GGSIPU. In this article, she discusses about the Animal Welfare Board of India along with the pet shop rules and how the pet shopkeepers can obtain the licence. 

Introduction

Pet shop rules are legalised standards that were incorporated to ensure the prevention of animals against cruelty. These rules are drafted in accordance with Section 38 of The Prevention of Cruelty to Animals Act. 

Animal Welfare Board of India

Section 4 of The Prevention of Cruelty to Animals Act empowered the Central Government to establish the board for animal welfare and for the protection of animals from unnecessary suffering or pain.

The Animal Welfare Board of India has been established in 1962 under Section 4 of The Prevention of Cruelty to Animals Act. It was headquartered at Chennai but the government has shifted it to Faridabad, Haryana.  Rukmani Devi Arundale is the founder of the Animal Welfare Board of India. It is an advisory statutory body which advises the government in making laws for the welfare of animals in our country. There are 28 members in this board which includes two members from the Rajya Sabha and four members from the Lok Sabha.

Functions of Animal Welfare Board of India

1. It figures out the rules for the welfare of animals that how animals should be treated. 
2. To protect the animals from torture or harassment, it has also frequently prosecuted to have stricter laws.
3. If the Animal Welfare Organisations fulfil the guidelines provided by the Animal Welfare Board of India then it grants them recognition. 
4. It gives suggestions to the government to modify rules and laws concerning animal welfare issues.
5. It also guides the officials and organisations and helps them in interpreting and application of the laws.
6. To raise awareness about the animal welfare problems it issues publications also.
7. It has the team which educates the people on the subjects of animal welfare and it also trains the members of the community to be Certified Animal Welfare Educators.
8. It provides financial help to the Animal Welfare Organisations which are recognised by it.

Is owning a pet store profitable?

Yes, no doubt it is a profitable business. It can be profitable no matter what is the performance of the larger economy. The owners have reduced their own expenses before minimizing the living standards of their pets because of this it won’t effect after recessions also. Small-business owners should take care of their costs to compete with large retailers. 

Pet Store Franchises

Pet Store Franchise India

Pets should be treated as they are like the part of our family and should be considered as a family member. Therefore, in India, the pet store franchise is very advantageous and high-income segment that can be looked for a business enterprise by entrepreneurs. Dog breeding franchise, aquarium franchise are the few types that can be explored.

Dog breeding franchise, aquarium franchise, pet store franchise in India have always been there to start a business in this part. Dog spa franchise, pet food delivery franchise, pet salon franchise are some unique businesses in this category which are profitable and have been explored.

How to start a pet shop in India?

Setting up a pet shop

Section 38 of Prevention of Cruelty to Animals Act, 1960 laid down the rules for pet shop. Section 3 of the Prevention of Cruelty to Animals Act states that without the registration certificate, the operation of a pet shop is prohibited. According to the rule not only obtaining a registration certificate is sufficient but also a flagrant display of the certificate in the shop is necessary.

Eligibility Criteria

If an individual wants to own a pet shop then the following criteria must be fulfilled for the registration:

• age must be above 18 years
• not had been disqualified by law from entering into a contract 
• should be of sound mind

If an association/company/corporation other than an individual wants to own a pet shop then such association/company/corporation shall be registered in accordance with the law.

Certificate of registration

One must have a valid certificate of registration to own a pet shop and if one fails to do so within the specified time then pet shop will be sealed. Animals will be sent to a recognized Animal Welfare Organization from the sealed pet shop. 

The State Board issues a certificate of registration which will be valid for a duration of 2 years. The certificate issued by the State Board will be absolute in nature. 

Procedure to obtain a licence

You must have to file an application in a prescribed manner which is given in Schedule I in the Animal Welfare Board of India in order to obtain a license for owning a pet shop.

When the local authority and representatives of the board, both are satisfied with the applicant then they may approve the license to an applicant which is valid for 2 years, on the payment of a non-refundable license fee of Rs. 5000.

Application form

An application form must be filed for the registration, in a manner which is prescribed under Schedule-I and has to be made to the State Board along with a fee of Rs 5,000/- and that fee is non-refundable. A separate application has to be made for every distinct premise to be registered.

Click on the link given below to access the form:

http://111.93.47.72/csbsdmc/vtl/vtlregistration.php

Inspection

1. The State Board after receiving the application for registration directs a team to conduct an inspection of the shop which is mentioned in the application. 
2. An inspection team consists of the representative of the State Board, a veterinary practitioner and authorised representative of the society for the Prevention of Cruelty to Animals. 
3. The inspection team has to submit the report, which is required to be appropriately signed by the inspector and accompanied by the application. 
4. The State Board after examining the inspection report and satisfying itself that all the requirements have been fulfilled by a shop, register the shop by:

• Issuing a certificate of registration
• Record all the details of the shop in the register which contains the details of all the shops.

Renewal of registration

An application for the renewal of registration must be filed 30 days before the expiry date. It should be in the format provided in the form appended to Schedule I. It can be renewed after the payment of Rs 5000. 

Denial of registration

The State Board can reject the application for registration of pet shop under the following situations:

• If an applicant gave the fake information or manipulated accounts and occurrence of intentional misrepresentation are recognized in the application.
• The applicant was operating a shop without possessing the license.
• The applicant, preceding the submission of application and had been convicted for an animal-related offence.
• If an applicant is not giving permission to the inspector to access the premises of his pet shop.

The reasons for denying an application for registration need to be recorded by the State Board.

Who doesn’t need to obtain a licence? 

The entity who do not need a license to own a pet shop are as follows:

• A Veterinary hospital/clinic
• A foundation that works for the welfare of animals and not involved in the commercial animal trade.
• Animal Welfare Organization which operates the shelter for animals.

Pet Shop Rules, 2010

The Prevention of Cruelty to Animals Act, 1960 had drafted some pet shop rules in Section 38 to ensure that animals should be treated kindly and to regulate commercialised pet shop establishments.

Objectives

The aims targeted to be achieved by the Pet shop rules are to:

• Ensure that feasible safeguards should be taken in order to prevent animals from contagious diseases and to avoid the unfortunate death of animals.
• Ensure that the sale of minor animals is avoided.
• Keep sale of potential pet animals under regulated limits.
• Ensure that birds/animals are provided with proper food and water which is essential for the breed of such species.
• Ensure that appropriate action must be taken against the defaulters of policy and for the disobedience of terms and conditions of the policy.
• Regulate individual/privately operating groups (falling within the jurisdiction of Municipal Corporations of the State) conducting sale and purchase business of animals.

Relevant definitions

Certain definitions were laid down by the pet shop rules:

• Section 2(1)(b) explains the term “Animal”. This section says that any living creature other than a human being or a plant is termed as animal and it shall include fish and birds.
• Section 2(1)(c) explains the “Animal Welfare Organization”. This section says that “Animal Welfare Organization” means an organisation for the welfare of animals which is recognized by the Animal Welfare Board of India.
• Section 2(1)(d) explains the “Board”. It says that the Animal Welfare Board of India is established under Section 4 of the Prevention of Cruelty to Animals,1960.
• Section 2(1)(h) states that “license” shall mean that permission is legally granted under these rules.
• Section 2(1)(k) elaborates “Pet Shop”. All shops, place or premises and markets which are involved in sale/business/exhibition of pets are considered as pet shops.
• Section 2(1)(m) defines that any legal entity or a person who gets the license to conduct commercial sale/trade of animals is considered as a “Pet Shop owner” or “Pet Shopkeeper”.  

To read more about these rules, click on the link given below:

http://awbi.org/awbi-pdf/draftpetshoprules.pdf

Prevention of Cruelty to Animals (Pet Shop) Rules, 2018

Objectives

The aim of the Prevention of Cruelty to Animals(Pet Shop) Rules, 2018 is to prevent animals from cruelty which are kept in the pet shops for the purpose of trade/sale/exhibition. 

Relevant definitions

• Section 2(1)(b) says that “Animal Welfare Organization” means an organisation for the welfare of animals which is recognized by the Animal Welfare Board of India.
• Section 2(1)(d) gives the explanation of “certificate of registration”. A registration certificate which is issued under the pet shop rules 2018 is known as “certificate of registration”.
• Section 2(1)(f) explains the term “infirm animal”.An animal which is going through any physiological or functional disability or any deficiency which is acquired by birth or after the birth is termed as “infirm animal”.
• Section 2(1)(j) talks about the “pet animal”. Cat, dog, rabbit, hamster, guinea pig, pet birds, rodents of the mice or rat category and such other types of animals whose trade and ownership is not prohibited by any other law, rules or regulations are included under pet animal.
• Section 2(1)(n) gives the explanation about “SPCA”. It means Society for the Prevention of Cruelty to Animals which is established in any district under the Prevention of Cruelty to Animals (Establishment and Regulation of Societies for Prevention of Cruelty to Animals) Rules, 2001 made under the Act. 

To read more about these rules, click on the link which is given below:

http://www.egazette.nic.in/WriteReadData/2018/189243.pdf

Key features

• A person is not allowed to own a pet shop or conduct a sale/trade of pets without a certificate of registration from the concerned State Animal Welfare Board. 
• You must have a valid certificate of registration to own a pet shop and if you fail to do so within the specified time then your pet shop will be sealed. Animals will be sent to a recognized Animal Welfare Organization from the sealed pet shop. 
• An application must be filed for the registration and has to be made to the State Board along with a fee of Rs 5,000/- and that fee is non-refundable. A separate application has to be made for every distinct premise to be registered. A Certificate of Registration is valid for 5 years and such certificate is non-transferable. It should be reviewed once a year.
• An authorized veterinarian has to do an inspection of the pet shops registered by the Board after receipt of the application. After being satisfied that the applicant and the establishment had fulfilled all the requirements which are provided under these rules, the registration can be continued by the State Board.
• The rules provide standards for housing, accommodation, general care, infrastructure, veterinary care, and other operational requirements. It also includes the guidelines on enclosures or aviaries of adequate size and space, a health certificate of every animal on sale from a veterinary practitioner, the elimination of wire mesh for the floors of the enclosures and a written exercise plan for any pup whose age is above 16 weeks.
• Every pet shopkeeper ought to maintain a record book.  The particulars of breeders and suppliers of pet animals, trade transactions and their details should be included in that record book. “Health register” and “Mortality register” are to be kept as additional records.
• If pet shopkeepers are not complying with these rules then the local authority or SPCA will conduct an inquiry after receipt of a complaint. If the animals found to be sick or ill-treated then they shall be seized and sent to the Animal Welfare Organization which is sanctioned under Section 2(1)(c) of pet shop rules,2010.
• During the inspection, if any violation is discovered then the State Board has the authority to issue a notice of show cause to the owner of a pet shop. If the State Board is not satisfied with the response of the pet shop keeper it can cancel the registration and convey the reasons in writing.
• It is compulsory for every registered pet shopkeeper to submit an annual report to the State Board. An annual report should include the details of the total number of animals boarded, traded or exhibited during the previous year.

General Practices to be observed by pet shops

• Pet shop owners have to keep the fish in an aquarium. He/She should arrange everything which is required for the pet which is kept for the purpose of sale.
• Pet shops are not allowed to sell any animal for the purpose of food.
• All measures for animal care should be strictly followed by a pet shop.
• A pet shop should maintain and install all the fire extinguishing equipment in shop premises.
• A pet shop has to take care of all the precautions and should maintain daily routine care accompanied by veterinary aid.
• Pet shops have to put every bird/animal for exhibition/sale inside the shop premises.
• It is very essential for a pet shop to keep sanitation standards and have to arrange adequate measures for the disposal of waste. 
• It is essential for a pet shop to keep animals in the same compartment which shows compatibility towards each other.
• Before the sale of kitten/pup, it shall be ensured that the pup/kitten is properly vaccinated and weaned.
• Appropriate accommodation accessories should be offered for the species.
• To avoid contamination in the food of animals, it should be stored and packed in sealed containers. All animals/birds should be provided with smell-free food and freshwater.
• A shop should maintain the appropriate provision of electricity in their premises. All pets have to be kept in secured condition.
• Accommodation of animals should be cleaned on a daily basis in order to maintain cleanliness and hygiene.
• Accommodation of animals should be maintained in good order and crafted as per the suitable conditions of animals and birds- temperature, lighting, ventilation.
• The license for the sale of birds/animals should only be granted if it is not prohibited under the Wildlife Act of 1972.

Online pet shops

How to start a pet store online

• Create an eCommerce Site

To familiarize with the world of online sales, firstly beginner has to consider an eCommerce site to analyse how products will be received. A beginner can consider eCommerce sites like Amazon to start an online pet store.

• Business Plan

There is a need for proper planning to start a business. A management summary should be included in a plan which indicates the purpose of business. How the business will be marketed should be designated in it, along with the idea of promotions and advertising. How many employees are needed to hire? Who are your forthcoming customers? Who is your competitor? Any financial requirements for the startup? There is a need to analyse all these aspects before starting a business.  

• Financing Requirements

Firstly, there is a need to plan from where the money is coming for the startup. This needs advance planning, such as applying for a business loan from the bank or can apply for a Small Business Administration loan or can take funds through savings.

• Determine your Competition

If you want to compete with your competitors for customers then you have to determine everything about your competitor as to what they are selling and for how much they are selling it. 

• Need for Suppliers

You have to determine which category of pets you want to sell. The foremost thing you have to do is to find out the reliable suppliers and try to establish more than one supplier for a backup plan if one of the suppliers goes out of business due to some reason.

• Domain Name should be catchy

You have to create a catchy domain name for your online business and the name should not be too long and vague. It should be short and unique. Before creating a name, search about the items similar to the ones which you are carrying in your business and find out which names are already being used by someone.

• Pet store website

You have to create a well-designed website for your business and hire someone who has experience in e-Commerce sites, to create it. Your site should be easily understandable and it should be visible and highly professional. It should be informative and interactive also. You have to link your social media pages along with your site and insert a link that enables customers to sign up for your newsletter which you should definitely produce on a daily basis.

• Develop a Mobile App

It is also a better plan to create a mobile app for those who want to do online shopping through their smartphones instead of only relying on the website.

• The Significance of a Good Web Host

A proper web host is required for your site. The web host is a service provider that provides services and technologies needed for the website to be viewed on the Internet.

• Online Payment System

For the products which you want to sell from your online pet store, there is a need to establish a way to get the payment for those products. An online payment system is the easiest way to be paid for online products.

• Advertisement for your online pet store

You will need a marketing plan for your online pet store to let people know that you are eager to do business with them. You can buy banners on marketable pet-related message boards, forums and blogs for marketing and the best thing is that most of the sites will charge only when someone had actually visited your advertisement.

• Shipping strategy for your products

The foremost step to develop your online business is to create an effective eCommerce shipping strategy. You can tie-up with the responsible courier service for the delivery of your products. If you want a successful business then you need to offer reasonable shipping charges for the customers and make sure that customers will not face any difficulties due to delivery. Delivery should be on time and at the proper place without causing any inconvenience to the customer.

Registration for pets

Section 399 of the Delhi Municipal Corporation Act 1957 says that the registration of pets is mandatory in Delhi. There are so many benefits of registering the pets like in case if you lost your dog then you can find the dog with the help of his photo and ‘dog collar’. 

Procedure for the registration of dogs in Delhi Municipal Corporation

• The following documents were required to register your pet dogs online:
  • Your photograph along with the photograph of your dog
  • A vaccination certificate against rabies
  • Residence proof       

These documents should be submitted before the submission of the application for registration.

• Fee for the registration of pets:

One time fee for the registration of dogs is Rs 500 per dog which includes a “dog tax” of Rs 5. An additional fee for online convenience is Rs 11.

• The zonal deputy director of veterinary services will issue a registration certificate and a “dog token” to you after the submission of documents. The validity of a dog token is for one financial year. Dog token should be attached either to the dog’s collar or be carried by you “at all times” for the identification of a dog.
• You, as a dog owner is required to provide the information to the corporation regarding the address changes. You will be responsible for the acts done by your dog.

Latest policy scenario

For the trade of pets, the new policy is still in its formation stage and after some time it will come into effect. An incorporated document of the new policy is not released yet but the premises for the formulation of a new policy have been set and they are as follows:

• The fee to obtain the license will get increased.
• The existing policy has not given an adequate amount of attention to the trade of fish and birds. So the forthcoming policy shall be laying emphasis on the fish or birds who are accounted for sale.
• Big fines will be imposed on the pet shopkeepers who treat their animals with cruelty.
• NGOs often claim that caging birds and animals is an exhibition of cruelty towards animals/birds, they refute the contention that caging of animals/birds fall within the ordinary course of business of the pet shops. Challenging the nature of the business carried out by pet shops and claiming harassment of animals/birds, NGOs and pet shops are often involved in the clash. The clash between NGOs and pet shops shall be sought via instruments of the new policy.

Import of pets – a new dimension

• A barrier has been imposed on the import of foreign breeds of dogs for the purpose of trade/sale/exhibition. For the police forces and equip defence, the import of such foreign breeds is allowed.
• Those intending to import such foreign breeds will be required to acquire recommendations from the Committee for the purpose of Control (that will be monitoring the purposes of import) and Supervision of Experiments on Animals (to keep in check the manner in which animals are treated).
• Purchasing a foreign breed in India is made more expensive in an attempt to discourage the inclination toward foreign breeds.
• Only those pet shopkeepers will get permission who possess legal documents for import to bring pets in the territorial boundaries.
• The observation was made by the Law Commission report no. 261 regarding pet shops. According to that report, it was observed that breeders and pet shops violate the rules regarding animal welfare laws with freedom and give the excuse that it is necessary to regulate their convention.

Conclusion

The government has taken all the measures to protect animals from cruelty or unnecessary suffering. The Prevention of Cruelty to Animals Act was enacted by the Parliament in 1960 for the protection of animals and to modify the rules and regulations related to animal welfare issues. The Animal Welfare Board of India has been established by the government under the Prevention of Cruelty to Animals Act to advise in the matters related to animal welfare issues.

The post How to Get a Pet Shop Licence? appeared first on iPleaders.

This article is written by Ramanuj Mukherjee, CEO, LawSikho

Anxiety is often productive. It makes us hyper. It makes us worried. It pushes us to work. To be careful. It’s a necessary chemistry in our brain that keeps us alert.

In the age of the caveman, it helped the species to survive. Anxiety is a part of our survival instinct. 

Anxiety was not always the bad guy.

However, we do not live in the wilderness anymore. There are no wild animals waiting around the corridor, no monsters hiding under our bed, and no imminent crisis of food and water as far as most of us are concerned. 

Our fear of the dark is not just fear of the lack of light, but what larked in those dark forests, where we do not live any more.

Those days are behind us. We live in a drastically sanitised, safe environment. Still, we are anxious just like when we lived in a cave, because our brain has not evolved as fast as our situation has.

And therefore, anxiety leads to bad decisions, untold suffering, and mental paralysis all the time. We are anxious about a large number of things at any given time, and often we mess up because of that anxiety. Anxiety can hold us hostage and prevent us from taking the bold steps that we must take.

We have social anxiety, we have financial anxiety, we have performance anxiety, we have anxiety about our very survival. This anxiety can be debilitating. Sometimes the level of anxiety in our brain is so high that it becomes impossible to focus on anything complex. Anxiety can make us run around like headless chickens, make us take wrong decisions one after another. 

But the worst is fear of failure, which is a kind of anxiety. It prevents us from going for the gold. It stops us from growing. It keeps us small. It prevents action because you are paralyzed with anxiety.

“If the anxiety is not managed well by the individual, the person will expect failure; regardless of the effort, will become a prisoner of anxiety and finally will achieve less of what he/she actually can.” (Scovel, 1978)

How do you beat or manage anxiety? I have known 3 ways to do this.

Meditation

A lot of the who’s who in the world will tell you how meditation is a big deal and how practicing meditation was a turning point in their lives.

From Steve Jobs to Bill Gates, they all swore by meditation. Why?

Number one factor is anxiety management. Much of our anxiety is generated by the part of our brain called the amygdala. It’s the fear centre. 

People who are repeatedly stressed tend to grow a larger amygdala. The larger it is, the bigger it’s influence. Those with big amygdala would have higher levels of crippling anxiety.

Over time, as we face more and more stress in life, the amygdala keeps becoming more powerful and bigger. Scientific studies on meditators show that doing regular meditation causes the amygdala to shrink in size! 

Also, people who meditate tend to have younger brains and retain grey matter despite aging!

Meditation is one way I fight my own anxiety. When I feel too much anxiety rising in me, I resort to morning meditation. I even do it right in the middle of the day if I feel the need.

I use the free version of Insight Timer for meditation, and it’s amazing.

My favourite meditations are sleep meditations, which are aimed at reprogramming our subconscious minds as we reach the theta state as we fall asleep. You can find these on YouTube easily.

Activating the frontal cortex

What is the most developed and advanced part of the human brain? It is the frontal cortex. This part is responsible for all reasoning. This is where complex thoughts generate. If you think someone is highly intelligent, you mean that this part of the brain is very active for them.

Let’s just say for simplicity that this is the analytical part of the brain. The nerd in the class. 

Anxiety does not come from here. It comes from more ancient parts of the brain. Amygdala and basal ganglia. This is at the centre of our brain, and very influential in the entire ecosystem of our brain. The neocortex or frontal cortex does not have so much clout. 

However, if we can consciously shift our thoughts and activate the frontal cortex, it takes over and basal ganglia, which holds our habit patterns, gets interrupted and sidelined.

The best example of this for me is smoking. Smoking is a habit. I learned a technique to quit it, which has worked so far.

It works against laziness too, and even to counter anxiety.

Here is what I do when I get an urge to smoke these days. I count backwards from 5 to 1. 

This counting interrupts the habit and activates the frontal cortex. Then I remind myself of all the reasons why I must not smoke. 

So far, it has worked. Everytime I interrupted my smoking urges with counting, the urge disappeared.

I do the same when I don’t feel like working out. Or getting out of bed. 

5, 4, 3, 2, 1 and jump out of bed. Or start the action I have been postponing.

The other way I activate my higher brain is by playing brain games on my phone like Peek or Memrise. Language learning is also amazing. Anxiety disappears after playing such a game or two. My mind becomes fresh and ready to take on complex tasks. It’s amazing. Please try at home!

Learning and development

This is the other powerful thing that keeps anxiety at bay. Nothing works better really. The days on which I learn something challenging and useful, my brain is on fire. I have infinite patience, energy and strength of will. Anxiety can’t even come close to me on those days.

Why does that happen? I investigated. The normal wisdom is that anxiety has a debilitating effect on learning abilities. Highly anxious people fail to be good learners. This I intuitively agree with, because when I am very anxious, it gets harder to learn or study or do any work that requires intelligence and concentration.

But is it possible that it works in reverse also? That learning can preempt anxiety and work as a preventative measure?

Research threw up an interesting answer. It was found that the joy of learning a foreign language totally counters the anxiety generated in a classroom where people are trying to learn a foreign language.

Wow. Our brain is hardwired to feel great and accomplishment when we learn something worthwhile, which takes some effort and concentration. 

The joy of learning, of course! It’s very powerful. Have you experienced it?

Chances are that you have.

There you go, one more reason to invest at least an hour engaging in learning and development activities. Exactly what we at LawSikho want you to commit to.

Learning and development is an important self care habit, like going to the gym and meditation. It will keep your mind young, fresh and crackling!

Our courses are designed in a way that busy lawyers and professionals can taken them without any difficulty, as classes happen after work hours, and you just need to invest 8-10 hours in a week, whenever you can find time. 

Even in a cab or a flight. Take out your phone and read, or watch a video.

All the best! 

Here are some courses you should consider:

Executive Certificate Courses

Certificate Course in Legal Practice Development and Management

Certificate Course in Advanced Criminal Litigation & Trial Advocacy Certificate

Certificate Course in Consumer Litigation 

Certificate Course in Trademark Licensing, Prosecution and Litigation 

Certificate Course in Securities Appellate Tribunal (SAT) Litigation 

Certificate Course in Companies Act 

Certificate Course in Labour, Employment and Industrial Laws for HR Managers 

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This article is written by Shatakshi Pathak of DME, GGSIPU. In this article, she has done a detailed study of the judicial system of India, functions of the judiciary, the jurisdiction of the courts in India and discussed the hierarchy of courts. 

What is judiciary?

According to the “Rule of law”, all individuals whether they are rich or poor, men or women, from forward or backward caste are subjected to the same law. Judiciary ensures the supremacy of law and the rule of law. The law is interpreted by the judiciary but the judiciary cannot make the law. Judiciary resolves the disputes and ensures justice by applying the laws.

Judicial Meaning

The meaning of judicial is to make judgements in a court of law. Judicial is related to the legal system.

Judiciary in India

India has a single integrated system of Judiciary in view of a single Constitution. The judiciary in India acts as the custodian of the Indian Constitution and the protector of the Fundamental Rights. The Indian Judicial System is one of the oldest legal systems of the World. The Indian legal system was majorly influenced by the local customs and the religion.The judicial system in India is integrated and pyramidal in structure with the Supreme Court at the top and the High Court and the other Subordinate Courts at the lower levels. The adversarial litigation system is followed by the Indian Judicial System in which the impartial neutral party and both the sides present arguments before the Court of law. The Common law system which is followed in England influenced the Indian Judicial System. The laws were developed by the judges through the judgements delivered by courts and these judgements were followed as precedents. The specific feature of the Indian Judicial System is “judicial review”. The judicial review is the power given to the judiciary to determine the validity of law. Article 137 of the Indian Constitution empowers the Supreme Court with the judicial review through which it can declare any law as void when it is unconstitutional or in derogation with the Fundamental Rights. The power of judicial review is given to the High Courts also through which it can overrule the decisions of the lower courts.

According to Article 13 of the Indian Constitution, the laws which are contrary to the Fundamental Rights are declared as void by the judiciary.  

Our Constitution ensures the Independence of Judiciary which means that the other organs of the Government must not restrain the functioning of the judiciary in such a way that it would not be able to do justice. Other organs of the Government should not interfere with its decision and judges must be able to perform their functions without fear or favour. The Constitution of India had granted rights to citizens to ensure equality and protects them from any partial judgement. The power to resolve disputes and to give judgements is based on the rules of law, is given to judiciary.

According to the members of the Constituent Assembly, “ This is the organization which will safeguard those fundamental rights which have been given to every citizen under the Constitution. Therefore, it must be above all obstruction by the Executive. The Supreme Court is considered as the “watchdog of democracy.”  

Indeed, the Independence of the Judiciary is entailed not to favour judges. It is crucial to maintain the pureness of justice and to acquire the trust of people in the administration of justice.

Article 50 of the Indian Constitution ensures the separation of powers of the judiciary from the executive.Our Indian Constitution has granted fundamental rights to people and to sustain these rights the judiciary is made independent by it.

Types of Judiciary 

There are so many countries and each one of them follow different types of the judicial system and follow system according to their own governance.

The United States of America follow the judicial system in which there is a two-court system. The State Court system and the Federal Court system are the two types of court in the USA. These courts are not totally independent from each other as they usually interact with each other. The main objective of every judicial system is to solve legal issues and to vindicate legal rights.

The Article III court is followed in various countries. The Supreme Court, District Courts and Circuit Courts of Appeal are the courts which are included in Article III Courts. There are other special courts like the International Courts and the Court of Claims are also included in the Article III courts.

There are second type of court system in various countries which may include the Bankruptcy Courts, Tax courts, Magistrate courts, Court of Veterans Appeals and the Court of Military. There are various types of State Court Systems and most of them are composed of the two types of trial courts, Traffic and Family courts which are included in the trial courts having limited jurisdiction. The general jurisdiction courts are also there which includes the intermediate appellate courts, the main trivial courts and the highest state courts also. In contrast to the Federal Courts, a large number of the State Court Judges are either elected or appointed not permanently but for a specific number of years. 

The Trial Courts of limited jurisdiction manage certain sorts of particular cases. Generally, these courts are located near the courthouse of the country or inside the country and usually presided over by one judge. The Municipal Court, family court and probate court are the few types of trial courts having limited jurisdiction. The Trial Courts of general jurisdiction are the principal trial courts in the state’s system. These Courts hears the cases which are beyond the jurisdiction of the trial courts of limited jurisdiction. These courts deal with both civil and criminal cases. In most of the states of the U.S., there are intermediate appellate courts in between the highest court of the State and the trial courts of general jurisdiction. There are some kinds of highest courts in all the States and these are referred to as the Supreme Courts in some States. 

The common tradition law system is followed in England and this system is followed in the colonized countries of England also.

There are several countries and each country has a different organization of courts of law which includes the District Courts, the Supreme Court, the Magistrate Courts, Regional Labour Courts and National Labour Courts. The Magistrate Courts are considered as the primary trial courts. These courts have jurisdiction to deal with criminal matters. The District Courts are the courts at a middle level and these courts deal with the matters which are not under the sole jurisdiction of the other courts. The Supreme Court has the authority to hear criminal and civil appeals from the District Courts.   

Functions of Judiciary

The judiciary played an eminent role in a modern democratic state. It performs various functions, like:

• Interpretation of law

The foremost function of the judiciary is to interpret the law and use them in a particular case by applying the principles of customs, statutes and various provisions of the Constitution. They go through the facts of the case and analyse what legal rights of parties in the case are affected and what law should be applied in this situation. When the law is lacking, judiciary applies the principle of justice, equity, and morality.

• Guardian of the Constitution

Our Constitution gives the right to all citizens to protect themselves from inequality and the Court protect these rights. The power of judicial review is also given to the Supreme Court of India and it enjoys the power to declare a law passed by the legislature as unconstitutional if that law conflicts with the Constitution. It is not only the guardian of the Constitution but it also modifies the Constitution with the changing conditions. It has also expanded the Constitution through inference of its original provisions. The Indian Supreme Court had also pronounced some laws as “ultra vires” on the rationale of “procedure established by law”.

• Custodian of Civil Liberties

The judiciary protects individual liberty by punishing those who intrude against it. It also safeguards people against tyrannical action of the Government. Article 32 which is known as the “heart and soul of the Indian Constitution” provides right to the people that they can directly approach the Supreme Court in the case of the infringement of the fundamental rights. A writ can also be filed in the High Court under Article 226 of the Indian Constitution to protect these rights.

• Resolves the disputes of jurisdiction between the Centre and State Governments in Federations

  The Constitution of India establishes a federal structure to the Indian Government, so the powers are divided between the Centre and the States. There are chances that disputes may arise between the Centre and the State over the jurisdiction. Therefore, the Supreme Court is given the right to decide these disputes.

• Advisory Function

In India, the Supreme Court acquires the right from the Constitution to advise the President on the legal issues. Article 143 of the Indian Constitution empowers the Supreme Court with the advisory jurisdiction.

• Administrative Functions 

The Supreme Court and the High Courts have the authority to appoint their local officials and subordinate staff.

Indian Judiciary Chart 

Hierarchy of courts and their jurisdiction should be properly defined to deal with the disputes which arise every day in a big country like India. The Supreme Court of India deals with the cases at the National level, the High Court deals with cases at the State level and Subordinate courts (Civil and Criminal) deals with the cases at the District and Subordinate level. 

Types of Courts in India – 7 types of Courts in India

There are various types of Courts in India, each has different powers depending on the tier and jurisdiction conferred on them. They function according to the set hierarchy of the courts.

Supreme Court 

In our country, the Constitution lays down the foundation of an integrated judiciary having Supreme Court as the highest and final court of appeal. Article 124(1) of the Indian Constitution states that there shall be a Supreme Court of India constituting of a Chief Justice of India. Initially, the Supreme Court of India consists of the Chief Justice of India and seven other judges. The Parliament may, by law, increase or decrease the number of judges of the Supreme Court when it is required. Now, the Supreme Court has 31 judges including the Chief Justice of India. In our Constitution, there is a provision of appointment of judges on an ad hoc basis, whenever it is required. Article 127(1) of the Indian Constitution deals with the appointment of ad hoc judges. Ad hoc is a Latin term which means “for this”. It means for a particular purpose. When a quorum of judges is not available to continue or hold the sessions of Court then ad hoc judges were appointed. The Chief Justice of India can appoint a High court judge as an ad hoc judge of the Supreme Court after consultation with the Chief Justice of the concerned High Court.

The President of India appoints the judges of the Supreme Court and the later can consult with the Chief Justice of India and also with existing judges of the Supreme Court regarding such appointment. In case of appointment of the Chief Justice of India, the President shall consult such judges of the Supreme Court and the High Courts.

1. For a person to be eligible as a judge of the Supreme Court, he/she must be a citizen of India, and should have been for at least five years a judge of a High Court or of two or more such Courts in succession, or
2. should have been an experience of practicing as an advocate of High Court for the last ten years or of two or more such courts in succession or
3. should in the opinion of the President be an eminent jurist. 

The Supreme Court of India is the highest court of appeal and is vested with various powers, it exercises original, appellate and advisory jurisdiction.

Powers of the Supreme Court

1. The Supreme Court has the power to punish for contempt of Court under Article 129 of the Indian Constitution.
2. The power of Judicial Review is given to the Supreme Court under Article 32 and Article 136 of the Indian Constitution. They have the power to examine the legislative enactments and executive orders whether they are consistent with the provisions of the Constitution or not.
3. Supreme Court is a deciding authority in the election of the President and the Vice President and enquiring authority in conduct and behaviour of Union Public Service Commission (UPSC) members.
4. Article 134 of the Indian Constitution empowers the Supreme Court to withdraw the cases from the High Court.
5. Article 126 of the Indian Constitution states that when the office of the Chief Justice of India is vacant or when the Chief Justice is by reason of absence or otherwise unable to perform his duties of the office, then the President of India may appoint a judge of the Supreme Court to dispense the duties of the office.
6. Article 127 of the Indian Constitution states that the Chief Justice of India can appoint a judge of High Court as an ad hoc judge in the Supreme Court with the consent of the President if at any time there is a lack of quorum of judges in the Supreme Court.
7. Article 128 of the Indian Constitution states that the Chief Justice of India at any time with the prior consent of the President and the person to be so appointed can appoint any person who had previously held the office of a judge of the Supreme Court.
8. The Supreme Court has the power of revisory jurisdiction under Article 137 of the Indian Constitution through which Supreme Court can review its judgements.

The Supreme Court is a court of record because its judgements are of evidentiary value and cannot be questioned in any court.

The Procedure to remove the Chief Justice of India and the judges of the Supreme Court is given under Article 124(4) of the Constitution of India. The President of India appoints the judges of the Supreme Court of India, so the power to remove them from their post is vested upon him. But, according to the Constitution of India, the judiciary is independent of the legislative and executive organs of the Government. So the judges of the Supreme Court can be removed only on the basis of proven incapacity or misbehaviour.

High Court              

Article 214 of the Indian Constitution states that there shall be a High Court for each State. The High Court consist of one Chief Justice and other judges. The President appoints the Chief Justice of the High Court in consultation with the Chief Justice of India while other judges were appointed by the President in consultation with the Governor of the state, Chief Justice of the High Court as well as the Chief Justice of India. If in the High Court the office of the Chief Justice falls vacant due to some reasons then the President can ask any of the Judge to look after the duties of the Chief Justice.

A person may be appointed as the Chief Justice of the High Court:

1. If the person is an Indian citizen, and
2. If he had held the judicial office in the territory of India, or
3. At least an advocate for 10 years in the High Court or two or more High Courts in succession, and
4. The age should be below 62 years.

A judge can remain in the office until he has attained the age of 62 years and can also resign before the retirement by giving a resignation letter to the President. He can also be removed if the Parliament passed a resolution which is supported by the majority of the total membership of the House in which the motion of removal has been passed and by a majority of not less than two-third members of the House present and voting has been presented before the President, on the grounds of proved misbehaviour or incapacity. He can also vacate the office of the Court when the President appoints him as the judge of the Supreme Court. 

Powers of the High Court

1. Under Article 226 of the Indian Constitution, a person can directly file a petition in the High Court in case of infringement of the Fundamental Rights. 
2. Election-related cases or marriage/divorce related cases can be directly filed in the High Court.
3. The High Court has the power to give punishment for the contempt of the Court.
4. The High Court has the power to review the cases of the lower Court and give its judgement accordingly.
5. The High Court exercises original, appellate, supervisory and administrative jurisdiction.
6. The High Court is a court of record and its judgements are of evidentiary value for the Subordinate Courts and its decision is binding on the Subordinate Courts and no Subordinate Courts can challenge them.

Civil Courts Meaning

Civil courts deal with the cases or offences that are committed against a private individual and not against the State unlike in criminal cases where the offence is committed against the State. Civil wrongs include tort, breach of contract etc. In India, the hierarchy of Civil Courts is based on the territorial and pecuniary jurisdiction of the courts. Civil Courts can deal with the cases which have been committed within its territory and also which is within the pecuniary limits of the court. 

The Supreme Court is the highest court of appeal for entertaining civil cases and these cases can not be filed directly in the Supreme Court, the appeal can be filed against the order of the High Court but in case of infringement of the fundamental rights one can directly approach to the Supreme Court.The appeal against the order of the District Court can be filed in the High Court and the cases above the value of Rs. 20 lakhs can directly be filed in the High Court of the State. District Court deals with the cases which lie between the value of Rs. 3 lakh to Rs. 20 lakh. The cases up to Rs. 3 lakhs were entertained by the Civil Judge the junior division and the original cases were entertained by him. Small Causes Courts are the lowest Court of appeal in the hierarchy of Civil Courts and it deals with the cases of value below Rs. 3 lakh. The Civil Courts are governed by the Civil Procedure Code. The Civil Courts can award damages or compensation to the party whose legal rights have been infringed. Plaintiff and Defendant are the parties to a civil case.

District Court and Additional District Court

The State Government in India has established the District Courts in every district by considering the number of cases and population  in that district. The District Courts of India are presided by a district judge and these courts administer justice at a district level. These courts are under administrative and judicial control of the High Court of the State to which that district belongs. The District and Sessions Judge is the highest Court in each district. The Governor after consultation with the Chief Justice of the High Court of that State appoints the judges of the District Court and the eligibility criteria to become a judge of District Court is at least seven years of practice as an advocate. The District Court is the highest Civil Court in a district. Civil and Criminal Courts are two types of Courts in every district. Civil Courts exercise the power of subject matter jurisdiction, territorial Jurisdiction, pecuniary jurisdiction and appellate jurisdiction.   

Powers of the District Court

1. The District Court hears criminal cases, domestic related cases and civil cases.
2. The District judge in case of criminal cases has the power to give any punishment including capital punishment.
3. The Chief Judicial Magistrate can deal with the cases which are punishable with imprisonment for a term up to seven years.

When the District Court exercises its jurisdiction in criminal cases under the Code of Criminal Procedure, 1973 (CrPC), it is referred as sessions court. The Court is presided by a judge who is appointed by the High Court of that particular State. Additional Sessions Judges and Assistant Sessions Judges in this Court can also be appointed by the High Court of that State. Additional Sessions Judges can be appointed in POCSO cases, electricity cases, NDPS, FTC etc. The appeal can be filed in the High Court against the decision of the District Court.

Court of Civil Judge (Senior Division)

The Court of Civil Judge of Senior Division comes at the middle of the hierarchy on the civil side. Civil Judge or Senior Division has the authority to try civil cases of any value. There are many additional courts of Additional Civil Judge(senior division). These additional courts have the same jurisdiction as exercised by the principal court of Civil Judge or Senior Division. A Senior Division or Civil Judge exercises pecuniary jurisdiction without any limit.

Court of Civil Judge (Junior Division)

The Court of Civil Judge of Junior Division is at the lowest level in deciding civil cases. It has the power to impose any sentence in accordance with the law and it can provide capital punishment also. Civil Judge of Junior Division can extend its jurisdiction in all the original suits and proceedings. 

Eligibility to become Civil Judge of Junior Division:

• An applicant must have done LL.B(Bachelor of Laws)/LL.M.(Master of Laws) with 55% from any university which was recognized by the State Government/Central Government.
• Age limit is 21-35 years and relaxation in age is provided to reserved candidates. 

Court of small causes for metropolitan cities 

Under the Presidency Small Cause Courts Act, 1882, the court of small causes for metropolitan cities were established in India. This Act empowered the State Government that it can establish a Court of Small Causes anywhere within its territory. These courts have the authority to decide small value civil cases only.

Munsiff court or court of sub judge III class

Munsiff court is the lowest court of appeal for civil cases in the district. It has the authority to try the offence under certain pecuniary limits. Munsiff Magistrate/ Judicial Collector have control over these courts. 

The territorial jurisdiction of the District Munsiff Court was prescribed by the State Government. The judge and presiding officer of the District are Munsiff Magistrate who keep a charge on all the tax inspectors.

Criminal Court Meaning

Criminal wrong is a wrong against the whole society not only against the victim. Criminal Courts deal with criminal matters which are considered as a crime against the State.

The Supreme Court exercises appellate jurisdiction through which it has the power to withdraw cases from the High Court regarding criminal matters. The appeal against the order of the District Court can be filed in the High Court of the State. 

The hierarchy of the Criminal Courts in India is given in Section 6 of the Criminal Procedure Code, 1973 which is given as follows:

1. Session Court
2. Judicial Magistrate of the first class
3. Judicial Magistrate of the second class
4. Executive Magistrate

Session Court

The lowest court of appeal in the hierarchy of Criminal Court is the Court of sessions where the sessions judge conducted the trial. Section 9 of CrPC empowers the State Government to establish a Session Court for every sessions division. The High Court appoints the judge of Session Court. Additional Session Judges and Assistant Session Judges can also be appointed by the High Court to exercise jurisdiction in a Session Court. 

This Court deals with cases related to theft, murders, dacoity etc. Session Court is empowered to provide a sentence of death and can impose fines for a criminal offence.

The High Court can appoint the Sessions Judge of one division to be an Additional Sessions Judge of another division. When the office of the Sessions Judge left vacant due to some reasons then the High Court has the power to do arrangements for the disposal of any urgent case. If any case is pending before the Session Court then Additional or Assistant Sessions Judge shall have jurisdiction to deal with such a case and in a situation where there is no Additional or Assistant Session Judge then Chief Judicial Magistrate in the sessions division can deal with such application.

Subordinate Judge Class I

Section 11 of the CrPC provided that the State Government can establish the Court of Judicial Magistrate of the first class in the district and any number by consulting with the High Court of the respective State.

It is given in Section 15 of the CrPC that a Judicial Magistrate is subordinate to the Chief Judicial Magistrate and it is subject to the control of the Sessions Judge.

Section 29 of the CrPC empowered the Judicial Magistrate of First Class that he may impose a fine not more than ten thousand rupees or may pass a sentence of imprisonment for not more than three years.

Subordinate Judge Class II

Section 11 of the CrPC empowered the State Government that it can establish the Court of Judicial Magistrate of the second class in the district and in any number by consulting with the High Court of the respective State.

Section 29(3) of the CrPC empowered the Judicial Magistrate of Second Class that he may impose a fine of not more than five thousand rupees or may pass a sentence of imprisonment for not more than one year or both. 

It is incorporated in Schedule I and Schedule II of the Cr.P.C. that the offences which are triable by either “Any Magistrate” or “Judicial Magistrate of the Second Class” such offences can be tried by a Judicial Magistrate.

Executive Magistrate

Section 20 of CrPC empowered the State Government to appoint Executive Magistrates in every metropolitan area and in every district. It has the authority to appoint one of the Executive Magistrate as the District Magistrate and it can appoint any Executive Magistrate as the Additional District Magistrate and such magistrate has the same power as enjoyed by the District Magistrate under CrPC.

If the office of a District Magistrate left vacant then any officer who is succeeding temporarily to the executive administration of the district shall exercise the same power as enjoyed by the District Magistrate under CrPC. The State Government is empowered to give charge of a sub-division to the Executive Magistrate. The Executive Magistrate who got the charge of a sub-division shall be called as Sub-divisional Magistrate.  

Jurisdiction of Courts in India 

Civil Courts

1. Subject matter jurisdiction

Under this Court, the Civil Court has the authority to deal with the cases of a particular type and concerning a particular subject matter. For example- cases related to family matters can only be dealt with by the Family Courts and not by NCLT that specifically deals with company matters only.

Territorial Jurisdiction

When a court exercises its powers within its territory then it is called the territorial jurisdiction. This Court can decide within a geographical limit of the jurisdiction of the court and it can not exercise its powers outside the geographical limit. For example, Madhya Pradesh will have jurisdiction to decide matters arising within Madhya Pradesh only and not outside. 

Pecuniary Jurisdiction

Under this jurisdiction, the Court has the authority to hear and decide the cases on the basis of the monetary value or the amount of the case or the suit in question.

Appellate Jurisdiction

Courts with higher authority have the power to exercise appellate jurisdiction. Under this jurisdiction, the court with higher authority can review the case that has already been decided by a lower court. In our country, cases are brought in the form of appeal in the Supreme Court and the High Court, both these courts have the power of appellate jurisdiction. They have the power to overrule the decisions of the lower court.

Criminal Courts

The procedure to conduct the trial in the criminal courts is provided in the Criminal Procedure Code. 

• According to Section 177 of the CrPC, the Court has the authority of the trial of the case only if the offence has been committed under the jurisdiction of that court.
• Section 178 of the Crpc, deals with the following matters:

1. When the offence has been committed in several places and the place of the offence is doubtful.
2. When the offence is partly at one place and the rest at another place.
3. When the offence is committed at different places and comprises of several acts.

If any of the above situations are fulfilled, then such offence may be tried in a court having jurisdiction over any of such local areas. 

• Under the provisions of Section 179 of the CrPC, it is postulated that any act which becomes offence due to any emanating consequences it is valid for trial in the court of proficient jurisdiction.
• According to the provisions of Section 180 of the CrPC, when the act committed is an offence because it is related to another offence then the place of trial of the court is according to the offence which has been committed first has to be inquired into or tried by either of the courts under whose jurisdiction the act has been committed.
• According to the provisions of Section 181(1) of the CrPC, the trial not only commenced in where the offence was committed, but it can also be commenced where the accused is found. It also deals with the cases when the offence is not committed in a single place.  It deals with the following situations:

1. The trial of the court is commenced where the accused is found or the offence is committed while performing the act of dacoity, dacoity with murder, thug etc. the thug, or murder has committed.
2. In the case of abduction or kidnapping of a person, the trial is commenced where the person has abducted/kidnapped or where the person was conveyed or concealed or detained.
3. In case of robbery, extortion or theft, the trial of the court is commenced where the stolen property is possessed, delivered or received or the court where the offence has been committed. 
4. In the case of criminal breach of trust or criminal misappropriation, the trial has been committed where any part of the property which is the subject matter of the offence has been received or retained, required to be returned or accounted for, by the accused or where the offence has been committed.

• Section 182 of the CrPC has provided the provisions for the offences which are committed by letters etc. If the victim has been deceived by telecommunication messages or by means of letters or if any offence committed includes cheating then the trial of the court has been commenced where the messages or letters have been sent or received and under the local jurisdiction of the court where the property has been received by the accused person or where the property has been delivered by the person deceived.
• Section 183 of the CrPC has provided provisions for the offences which have been committed during voyage or journey. During the journey, when a person commits an offence against a traveller or the thing in respect of which the offence has been committed is in due course of its voyage or journey, the trial of the court has been commenced under the local jurisdiction where the person or thing has been passed.
• Section 185 of the CrPC empowered the State Government to direct any cases or class of cases can be tried in a Sessions Court for which the trial has been committed in any district.
• Section 186 of the CrPC empowered the High Court to resolve the confusion when the cognizance of a particular offence has been taken by more than one court and confusion arises that which of the Courts shall inquire into or try that offence.
• Section 187 of the CrPC empowers the Magistrate to issue warrant or summons for offences which do not come under the local jurisdiction of it. In this condition, the Magistrate has the power to order such a person to be produced before him and then send him to the Magistrate of proficient jurisdiction.      
• Section 188 of the CrPC has provided provisions for the offences which are committed outside the territory of India. According to the provisions of this section, if an offence is committed outside the territory of India:

1. By an Indian citizen, whether on the high seas or elsewhere.
2. By a person, not being a citizen of India, on any ship or aircraft registered in India.

This offence is considered as such offence which had been committed at any place within the territory of India and at a place where such person may be found.

• Section 189 of the CrPC provides the authority to the Central Government that it can take the receipt of evidence for the offences which are committed outside the territory of India.  

Jurisdiction of Supreme Court in India

Original Jurisdiction

Under this jurisdiction, the Court refers to a matter for which that particular court is approached first. Article 131 of the Indian Constitution gives power to the Supreme Court to resolve the dispute which arises between the States of India or between the State Government and the Union Government.

Article 32 of the Indian Constitution empowered the Supreme Court to exercise original jurisdiction in case of infringement of the Fundamental Rights.

Appellate Jurisdiction

The power to exercise appellate jurisdiction lies with the Higher Courts. Through this jurisdiction, courts have the power to review, amend and overrule the decisions of the lower courts. Article 132, Article 133 and Article 134 of the Indian Constitution deals with the Appellate Jurisdiction of the Supreme Court in appeals from the high courts in these cases:

1. If the High Court certifies that the substantial question of law is raised in the case and it needs interpretation of the Constitution in Constitutional matters.
2. If the High Court certifies that the substantial question of law of general importance involved in the case in civil matters.
3. If in criminal matters, the High Court has withdrawn the case from the Subordinate Court and on appeal reversed the order of acquittal of an accused and sentenced him to death.
4. If the High Court certifies that the case is a worth appeal to the Supreme Court.

In any of the cases, whether it is of criminal, civil or any other proceeding, if the case involves the interpretation of the Constitution then the Supreme Court has the final authority to elaborate the meaning and the intent of the Constitution. 

Advisory Jurisdiction

Under this jurisdiction, the President of India can plea the advice of the Supreme Court to give its opinion on any issue of law or act. Article 143 of the Indian Constitution empowers the President of India to seek the opinion of the Supreme Court on any issue of public importance. But the Supreme Court can only advise on that issue, that opinion is not binding on the President.

Special leave petition

Article 136 of the Indian Constitution empowered the Supreme Court to grant special leave against the judgement or the order passed by any court within the territory of India. Article 262 of the Indian Constitution prohibits the Supreme Court from hearing the issues related to inter-state riparian disputes and power of special leave petition granted to the Supreme Court has been frequently used to prevent this bar.

Court of record

In India, the Supreme Court is considered as a “Court of Record”. The judgements or acts passed by the Supreme Court of India are apprehended as legal references and legal precedents. The Supreme Court is a court of record because its judgements are of evidentiary value and cannot be questioned in any court.

Jurisdiction of High Court in India

Original Jurisdiction

In several cases, people can directly approach to the High Court of India without appeal and this is known as original jurisdiction. The High Court enjoys the power of the original jurisdiction in the following cases: 

1. If there is a dispute between the Legislative Assembly and the Members of the Parliament.
2. In matters related to contempt of court, marriage etc.
3. In case of the infringement of the Fundamental Rights.
4. If the case involves the question of law which the court itself transferred from the other court.

Writ Jurisdiction

Article 226 of the Indian Constitution grants powers to the High Court to issue directions, writs or orders in the name of Certiorari, Habeas Corpus, Mandamus, Prohibition or Quo Warranto. The High Court can issue writs in the matter of the Fundamental Rights and other matters also which lie within its territorial jurisdiction. 

Appellate Jurisdiction

The High Court is considered as the primary court of appeal because it is empowered to hear appeals against the judgement given by the Subordinate Courts within its territorial jurisdiction. It can exercise appellate jurisdiction in the matters of criminal jurisdiction and civil jurisdiction. The judgements related to Sessions Court and Additional Sessions Court comes under the criminal jurisdiction and the cases involving confirmation of death sentence, imprisonment for seven years awarded by session court before execution. The orders and the judgements of the District Courts, Additional District Courts and other Subordinate Courts come under the civil jurisdiction.  

Supervisory Jurisdiction

Article 227 of the Indian Constitution empowered the High Court with the power of superintendence over all the courts which come under its territorial jurisdiction except tribunals or military courts which deals with armed forces. The High Court covers both judicial and administrative superintendence. It is not necessary that the appeal came before the High Court on the application of a party only, it can be “suo moto” which means “on its own motion”.

Jurisdiction of District Court and Additional District Court

The District Court or Additional District Court empowered with both original jurisdictions as well as appellate jurisdiction in civil and criminal cases which lies within that district. Civil Courts are governed by the procedure of the Civil Procedure Code and Criminal Courts are governed by the Criminal Procedure Code. In some cases, District Courts have the power of original jurisdiction in both civil and criminal matters, these cases cannot be tried by a lesser court than the District Court.

Civil Courts exercise the power of Subject Matter Jurisdiction, Territorial Jurisdiction, Pecuniary Jurisdiction and Appellate Jurisdiction. As per the Criminal Procedure Code, a sessions judge of District Court can reward a maximum sentence to the convict is capital punishment.

The District Court exercises the power of appellate jurisdiction over the Subordinate Courts in both the criminal as well as civil cases. Senior Civil Judge Court, Principal Junior Civil Judge Court and Junior Civil Judge Court are the Subordinate Courts in civil cases. Chief Judicial Magistrate, First Class Judicial Magistrate Court and Second Class Judicial Magistrate Court are the Subordinate Courts in criminal cases. The appeal against the order of the Supreme Court can be filed in the High Court of the concerned state.  

Jurisdiction of Subordinate Court

The Code of Criminal Procedure provided provisions for the jurisdiction in criminal matters.

Section 14 of the CrPC deals with the local jurisdiction of Judicial Magistrates. This section empowers the Chief Judicial Magistrate, who is subjected to the control of the High Court that he can define the local limits of the areas from time to time, within which the Magistrates exercise all or any of the powers with which they are invested under this code:

1. It is provided that the Special Judicial Magistrate Court may hold its sitting at any place within its local jurisdiction.
2. If the exception is provided by such definition then the powers of the Magistrate and its local jurisdiction shall extend throughout the district.
3. Where the local jurisdiction of a Magistrate has been extended beyond the district of its jurisdiction or the metropolitan area, as the case may be in which he generally holds court, any reference in this code to the Court of Session, Chief Metropolitan Magistrate or the Chief Judicial Magistrate, in relation to such magistrate, throughout the area which comes under his local jurisdiction, be interpreted, unless the circumstances otherwise requires, as a reference to the Court of Session, Chief Judicial Magistrate, or Chief Metropolitan Magistrate, as the case may be exercising jurisdiction in relation to that district or metropolitan area. 

Section 22  of the CrPC deals with the local jurisdiction of Executive Magistrates. This section empowered the District Court, which is subjected to the control of the State Government, that it can draw the local limits of the areas under which the Executive Magistrates may use all or any of the powers with which they may be endowed under this code but there are exceptions when the powers and jurisdiction of such Magistrate shall extend throughout the district.

Section 27 of the CrPC deals with the jurisdiction in the case of juveniles. If the accused is under the age of sixteen years then the case is tried by the Court of the Chief Judicial Magistrate or by any court which is tried under the Children Act, 1960.

Section 177 to Section 189 of the CrPC deals with the provisions related to inquiries and trials of the jurisdiction of the Criminal Courts.

Section 177 of the CrPC provides that the court which comes under the local jurisdiction where the offence has been committed then that offence must be inquired and tried by that court.

Section 178 of the CrPC deals with the provisions related to the place where trial or enquiry of offence should be commenced when there is uncertainty regarding the place of commencement of offence.

Section 179 of the CrPC provides that the trial of the offence is commenced at the place of the act where it is done or the place where the consequence ensues.

Section 180 of the CrPC provided the provisions for a place of trial in a situation where an act becomes offence due to another offence.

In case of certain offences, Section 181 of the CrPC provides provisions for the place of trial for such offences.

Section 182 of the CrPC deals with the offences which are committed by telecommunication messages or by letters etc. 

Section 183 of the CrPC deals with the offences which are committed during journey or voyage.

Section 184 of the CrPC deals with the offences which are triable together and provide provisions for such offences.

Section 185 of the CrPC empowered the State Government to direct any cases or class of cases can be tried in a Sessions Court for which the trial has been committed in any district.

Section 186 of the CrPC empowered the High Court to decide the district where the trial or inquiry of offence should be commenced in cases where there is confusion regarding the place of trial.

Section 187 of the CrPC empowers the Magistrate to issue warrant or summons for the offence which is committed beyond the local jurisdiction. 

Section 188 of the CrPC describes the offences which are committed outside the territory of India.

Section 189 of the CrPC provides the authority to the Central Government that it can take the receipt of evidence for the offences which are committed outside the territory of India.

The Code of Civil Procedure, 1908, provided provisions for the jurisdiction in case of civil matters.

Section 15 of the CPC provides that the suit for the offence firstly have to be instituted in the Court of the lowest grade competent for the trial.

Section 16 of the CPC provided that where suits have to be instituted, should be based on the subject matter which is subject to the pecuniary or other limitations prescribed by the law.

Section 17 of the CPC provided that the suits for the immovable property have to be filed within the local limits of whose jurisdiction where any part of the property is situated.

Section 18 of the CPC provided provisions for the place of institution of the suit where local limits of the jurisdiction of Courts are uncertain.

Section 20 of the CPC provided provisions for the place of institution of other suits. It states that suits for the offence have to be instituted where the cause of action arises or at the place where the defendants reside.

Conclusion

It is evident from this article that the Constitution of India played a crucial role in the rules and laws which are enforced from time to time to strengthen the judicial system of the country. The three-layer judicial system is necessary for the proper functioning of the judiciary in a big country like India to ensure proper justice to the citizens of a country. Every day a lot of disputes were raised, so proper hierarchy of courts and their jurisdiction should be properly defined to deal with such disputes.   

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This article is written by Siddharth Chapalgoankar, pursuing a Certificate Course in Arbitration: Strategy, Procedure and Drafting from Lawsikho.com. Here he discusses “What is Unique about Government Arbitration”.

Introduction

India ranked 77th in World Bank’s Ease of Doing Business Report of 2018 leapfrogging 23 ranks from 100th rank of 2018. The Report is given on various parameters and one of the important parameters is Enforcement of Contracts. The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the Court system.[1] India ranks 163 in this parameter where Judicial Processes is a major hurdle for improving the enforcement of contracts. 

One such area of enforcement of contracts is relating to Government Contracts. Constitution of India confers powers on Government to enter into a contract.[2] The Government enters into contracts with various entities pertaining to the construction of highways, dams, power projects and other contracts related to supply and delivery of goods.

With the new arbitration regime in India clubbed together with New Economic Policy, government contracts contain arbitration clauses to resolve the dispute pertaining to abovementioned contracts by way of arbitration.

This article makes an attempt to analyse how Government Arbitration is unique and what are the loopholes that exist in Government Arbitration.

Putting Arbitration Clauses

Most of the contracts end up in arbitration due to delaying in completion or termination or escalation issues or violation of state support agreements etc. Many contracts are drafted in such a way where the contractor is left with no remedy. For e.g, some contracts go on to mention that the contractor does not have any right to claim damages or interest, for a breach committed by the employer and some arbitration agreements are drafted advantageous to the employer alone.[3]

In most of the infrastructure either Government or Statutory body or a Public Sector Undertaking is the employer. In such cases, the employer selects the contractor by way of a tender process in which the bidder will have the right only to vary the Financials and certain technical aspects. None of the contractors at any point of time has any right to negotiate the general terms of the tender which include arbitration clauses. Hence if a party wishes to bid for the contract, it is left with no other option except to accept the same as it is.[4]

Appointment of Arbitrator

One of the most crucial and vital aspect with respect to Government arbitrations is the appointment of the arbitrator.

Once disputes arise between private  entities and the government, the situation apparently becomes worse as entities are forced to have their disputes adjudicated upon by seemingly ‘partial’ (which is not always true) arbitrators because the arbitration clause agreed between the parties provided for appointment of either serving officers or consultants or former employees or persons having close business relations with the government as the arbitral tribunal (sole arbitrator or panel arbitrators). In such circumstances, when the court is approached with the hope of at least having the dispute resolved in a manner that ‘impartiality is followed and also appears to be followed’, the hurdles before appointment of an impartial arbitral tribunal (under section 11 of the Arbitration and Conciliation Act 1996) are prima facie three-fold in nature (‘three hurdles’). First, there must be proof to the effect that despite the enormous commercial value of the private entity to the contract with the government, the arbitration clause vesting control with the government for appointment of the arbitral tribunal was due to ‘unequal bargaining power’. Second, convincing material must be shown that the balance should tilt in favour of protecting the interests of a private entity as opposed to strictly adhering to the appointment procedure agreed between the parties. Third, permanent and sustainable solutions must be formulated to address the problem of one-sided clauses on the appointment of an arbitral tribunal to ensure complete impartial adjudication of disputes.[5]

The foreign contracting parties are at a disadvantage due to such appointment of the arbitrator. Such clauses surprisingly were upheld by the Supreme Court because of parties consented to such appointments.[6] In spite of IBA rules of 2015 which mandates the non-appointment of staff as arbitrators, the Supreme Court has upheld such appointments.

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Court’s Approach pertaining to Appointment of Arbitrator

Against this background, it is necessary to examine the Honourable Supreme Court’s approach on the importance given to party autonomy and following the appointment procedure of arbitrators agreed between the parties and reaction to the requirement of ‘a party to fail to act as required under the agreed procedure’[7] before entertaining a petition for appointment of an arbitral tribunal by the court. The Honourable Supreme Court in Northern Railway Administration, Ministry of Railway, New Delhi v Patel Engineering Company Limited,[8] noted that section 11 of the Arbitration and Conciliation Act 1996 emphasises adherence to the terms of the agreement ‘as closely as possible’, even if it may not be ‘mandatory on the court’ and requires ‘due regard’ to be given to the qualifications mentioned in the agreement for persons to be appointed as arbitrators.[10] However, the Honourable Supreme Court in Union of India v Singh Builders Syndicate,[11] appointed a retired judge of the Delhi High Court as a sole arbitrator, even though the arbitration agreement required serving railway officers to be appointed as arbitrators.8 Furthermore, the Court explicitly noted that ‘a provision for serving officers of one party being appointed as arbitrator brings out considerable resistance from the other party, when disputes arise. Having regard to the emphasis on independence and impartiality in the new act (1996 Act), Government, statutory authorities and Government Companies should think of phasing out arbitration clauses providing for serving officers and encourage “professionalism” in arbitration’.[12]

Possible Solutions for Arbitration Clauses

In view of the aforesaid uncertainty and to keep the flood gates of litigation from opening, it is important to identify and formulate permanent and sustainable solutions to address the problem of one-sided clauses on the appointment of arbitral tribunals and to guarantee the complete impartial adjudication of disputes. The potential solutions to address the problem may be of two kinds, that is, passive or proactive in nature. The passive solution would entail waiting for a disagreement to arise between a private entity and the government on the appointment of an arbitral tribunal on the parameters of ineligibility and impartiality in the context of international commercial arbitration. In such a situation the Honourable Supreme Court of India will be moved and have the opportunity to lay down the law on the interpretation of the widely worded parameters on ineligibility and impartiality of arbitrators.[13]

However, the Supreme Court, even after being so moved, may not necessarily deem it appropriate to extensively lay down the law and may choose to only provide a fact-specific adjudication. The proactive solution would entail a collective effort on the part of entities routinely affected by the newly inserted parameters when they draft clauses providing for the procedure for appointment of arbitrators, subsequently appoint arbitrators, have disagreements on the appointment of arbitrators and lose time and money in the resolution of such disagreements before courts.[14] 

One potential proactive solution could be an initiative by the Ministry of Law and Justice in collaboration with other ministries and departments of the government, to create a routinely updated publicly available database of persons or a panel of proposed arbitrators with details of their relationship with the government, including disclosure of whether such person is or has been ‘an employee, consultant, advisor or has any other past or present business relationship’. The creation of such a database will meet two positive outcomes. First, the government will itself be able to continuously monitor persons who have become ineligible to be appointed as arbitrators and will not appoint such a person as an arbitrator in the first place when disputes arise and an arbitral tribunal is to be constituted. Second, the opening of the flood gates of litigation will be prevented as private entities can access such publicly available database as a prior step to moving the court in order to ascertain whether the person appointed as an arbitrator by the government is ineligible or impartial as per the newly inserted parameters by the Arbitration Amendment Act 2015.[15]

The aforesaid proactive solution of creating a routinely updated database is highly recommended, as the government will set a role model for best practices to ensure the appointment of impartial and eligible arbitrators and will prevent unnecessary litigation (which is expected to be voluminous on the issue of the appointment of arbitrators) before the actual adjudication of disputes on their merits by arbitration. In due course, the same exercise of creating such a database on proposed arbitrators may permeate into the private sector by way of a direction by the appropriate ministry of the government to ensure the appointment of independent, impartial and eligible arbitrators in disputes between two private entities.

References

1.  https://www.doingbusiness.org/en/data/exploretopics/enforcing-contracts
2.  Article 298 of Constitution of India.
3. http://www.lawyersclubindia.com/articles/Arbitration-Clauses-in-Government-Infrastructure-Contracts-8781.asp
4. Ibid
5.  Arbitration Clauses in Government Contracts: Can’t Live Without Them, How to Live With Them
6. The Government of Haryana PWD Haryana (B and R) Branch  v. M/s. G.F. Toll Road Pvt. Ltd. & Ors. [2019] Civil Appeal No. 27/2019 Supreme Court of India.
7. Arbitration and Conciliation Act, 1996, S.11(6)(a)
8. 2008(10) SCC 240
9.  Ibid. At para 12, paras 11-14
10.  2009 (5) MHLJ (SC) 138
11. Arbitration Clauses in Government Contracts: Can’t Live Without Them, How to Live With Them
12. Ibid
13. Ibid
14. Ibid
15. Ibid.

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

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This article is written by Shruti Singh, a student Lloyd Law College, Greater Noida. In this article, she discusses about confession, different types of confession and also different type of evidence. 

Introduction

Confession

The term Confession is defined in Section 25 of the Indian Evidence Act. It says that no person has to confess his offence in front of the police. 

Importance of confession

Confession is an important form of evidence and it is used to prove a case in a court of law. Based on documents of things we collect during the evidence is not helpful to prove the case with. It is not always feasible or adequate to base a case only on documentary evidence collected. This is where confession comes as a vital form of evidence. The importance of confession is defined in the case of Palvinder Kaur vs The State Of Punjab.

What is Evidence?

Evidence is the part of the investigation which is used to prove the case. During the investigation when police officials find something related to the incident that is considered as a piece of evidence. Evidence has many forms like a confession. Evidence is not about believing, it’s about reliability on a fact that is true, that the court of law can consider it admissible. Evidence in layman language means a fact, belief or proposition that can be said to be true and which can prove the existence of something in a court of law. If anyone is confessing about the incident he or she has to prove his or her confession in a court of law. 

Case laws

Palvinder Kaur vs The State Of Punjab

Facts:

The poison name Potassium Cyanide is given to Jaspal Singh by the Mahinder Pal. It is found that Mahinder Pal, is the accused, who has given poison to Jaspal Singh and had dumped him in the large trunk and kept it in the room in the house of Ambala City. Then the writ petition has been filed by the father of Jaspal Singh. Palvinder Kaur, the wife of Jaspal Singh convicted for the murder and sentenced for the transportation of life. 

Judgment of the case:

Supreme court has given the judgment stating that when any person takes admission in the confession to confess the crime must admit the crime with all the facts which is relevant to this case which constitute the crime. If any statement contains an exculpatory sentence that statement is not considered as evidence. 

Nishi Kant Jha vs The State Of Bihar

Facts:

The appellant was traveling on the train and then he noticed that one boy is washing blood-stained clothes and bathing in the river. Because of some misconception, the appellant was charged for the murder of a fellow student in a railway compartment. In the statement, he admitted that he is present at the scene of the murder but stated that he was trying to prevent the crime. Someone else has committed the crime, he was injured by the knife when he is trying to prevent the crime. 

Judgment of the case:

The Supreme Court held that if any statement is made and not proved that the statement is not valid will be rejected by a court of law.

Evidence Act under Indian law

Section 30 in The Indian Evidence Act, 1872

Section 30 of the evidence act says that the confession which is already proved in a court of law can affect the person or affect another person also who are involved in the case. If the confession is made for both the person who is involved in the case but the statement is given by only one person then the person who confesses will be taken by a court of law. 

Tried jointly

This is an underlying principle of Confession.

The following persons may be charged and tried together, namely:

1. Persons who are accused of the same offense committed in the course of the same transaction. 
2. Persons accused of an offense or accused of abetment, or attempt to commit such offense.
3. When people are accused of more than one offense of the same kind, within the meaning of Section 219 of tried jointly committed by them jointly within twelve months. 
4. Persons accused of different offenses committed in the course of the same transaction.
5. Persons accused of an offense which includes theft, extortion, cheating, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of, property possession of which is alleged to have been transferred by any such offense committed by the first-named persons, or of abetment of or attempting to commit any such last-named offense. 
6. Persons accused of offenses under sections 411 and 414 of the Indian Penal Code IPC 410, 411, 412, 413, 414 Indian Penal Code | Stolen Property.
7. Or either accused in respect of stolen property the possession of which has been transferred by one offense.
8. Persons accused of any offenses under the Indian Penal Code relating to counterfeit coin or persons accused of any other offense relating to the same coin, or of abetment or of attempting to commit any such offense and the provisions contained in the former part. So far as may be, apply to all such charges.

May take into consideration 

Consideration of proved confession affecting person making it and others jointly under trial for some offense.

When more persons are accused than one are being tried jointly for the same offense, and a confession made by one of such persons are affected by himself and some other of such persons is proved, the Court may take into consideration such confession as against such person as well as against the person making such confession.

Evidentiary value of confession 

A confession when proved and declared relevant it is called an evidentiary value of confession.

Evident must be proven in court in front of judges during court hearings. Evident must be proof in written as well as oral. The confession of the victim and accused is the most valuable in court. 

What is its evidentiary value? 

No hard and fast rule can be laid down.

It is the duty and responsibility of the judge to determine the confession of the accused and victim and even confession of the family members as well as friends and the other persons who are involved in the case. It is easy to determine the evidentiary value of a confession. When confession of the accused is taken forcefully or taken in a wrong, it creates a problem with the exculpatory portions. Statement some inculpatory portions that can be relied upon by the court along with other evidence. 

Admissibility

Section 136 in The Indian Evidence Act, 1872

Admissibility is also the form of evidence which is accepted in a court of law. The evidence must be relevant for the acceptance in a court of law. It must have some relevance to prove the case in court. The fact must be certain but at least it must tend to increase and decrease the fact. The person who finds the facts must determine the weight to give a particular piece of evidence. A given piece of evidence is considered material if it is offered to prove the fact that is in dispute in a case. Evidence is considered competent if it complies with certain traditional notions of reliability. Courts are gradually diminishing the competency rules of evidence by making them issues related to the weight of evidence.

Relevancy

Relevancy of Facts – Section 5-16 of Evidence Act

The evidence which holds the value in a court of law or proves the case in the court that holds relevancy. The fact which is legal that is only accepted in a court of law. Confession is the most relevant form of evidence in a court of law. 

Case laws

Pravin vs Ghanshyam

Facts of the case:

The petitioner has filed the petition on 12.07.2017 under article 65 of the evidence act which gets rejected. The petitioner has filed the suit for declaration and permanent injunction concerning the land. The L.T.Sitaram has owned land which expires on 29.08.2013. According to the Petitioner, he made a will on 29.05.2003 in favor of LTE.Sitaram. So according to the will, after the death of Sitaram, the petitioner becomes the owner of the land and also agreed to sell his land to Parasram and Prakash. The agreement is done on 04.09.2013. The plaintiff is still in the possession of the land and then also the respondent tries to destroy the crops of the land of the petitioner.

Judgment of the case:

The court ordered to prove the document which the petitioner makes that document by making a photocopy of the document and presented in a court of law. The photocopy of the document court has rejected the application of the petitioner.

Oral confession

Oral confession means the confession is taken orally or partly written. This is the fact which reduced the writing. The defendant oral confession is taken in the court during the hearing. But the victim’s oral confession is more valuable in court during the hearing. Oral confession cannot be denied. Once the oral statement is taken by the victim, it can’t be changed. Because in written statement people may make false documents and can show in court. But during the oral confession statement get proved in the court by the lawyers. There are some rules for taking oral confession. If during the confession police official or anyone tries to torture or force the victim to confess the wrong statement then he or she can file a PIL against the police officials. There is a case explaining oral confession. 

Case laws

State Of Uttar Pradesh vs Singhara Singh And Others

Facts of the case:

As per the law, any person who is not in the post of police-oficer and if we recorded any statement or confession and tried to torture or harash the accused then he will be inquired and put into the trial case. His record will not be taken as a record and could not be put in evidence to prove the confession. Singhara Singh, Bir Singh, and Tega Singh were prosecuted for the murder of the shopkeeper Raja Ram. 

Judgment of the case:

The additional sessions court judge of Bijnor has convicted Singhara Singh for the murder under the Indian Penal Code and sentenced him to death. 

Confession should affect the maker as well as co-accused

When a victim has to confess her incident in front of the whole community, this affects the victim’s image in front of the whole community. She has to face every bad circumstance in every point of her life. She loses the support from everyone. If any offence is committed than only one person has to face all the trials. He tried jointly in the court. The confession of one person affects himself and some other of such persons is proved. The court takes the confession against the one person or the other person. But the confession of the co-accused is undoubtedly and admissible in court. The court cannot start the confession of the co-accused. If there is substantial evidence then the only confession is taken into consideration to set the doubt at rest. 

Statement of the victim

Section 164 CrPC

When a statement is given by the victim related to the incident to the police, it is called a statement of Victim. The statement of the victim is defined in section 164 of CrPC. Victim statement has relevance in a court of law. It gives an opportunity to the victim to speak up in front of the whole community so that no one can make a bad statement about the victim. 

Surinder Kumar Khanna vs Intelligence Officer

According to the prosecution:

On the specific information, police officials notice that the narcotic drugs were going to be transported from Jammu to Chandigarh via Hoshiarpur with the white colour Indica. The officers of Directorate of Revenue Intelligence laid pocket at toll barrier at Hoshiarpur road.

Judgment of the case:

The High Court of Punjab and Haryana held that the offences which are held by the appellant are punishable under Section 21(c) which is read under Section 29 of the Narcotic Drugs and Psychotropic Act, 1985.

Conclusion

Confession is an important form of evidence which is used for proving the case in a court of law.  Based on documents of things we collect during the evidence is not helpful to prove the case with. It is not always feasible or adequate to base a case only on documentary evidence collected. This is where confession comes as a vital form of evidence. There are other forms of evidence which are used to prove the case but confession is the most valuable form of evidence which cannot be rejected in the court of law.   

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This article is written by Isha Sharma, a 5th-year student at Bharati Vidyapeeth, New Law College, Pune. This article will lay out what actually constitute in all the sections and provisions of the Companies Act, 2013 and all the rules of Companies(Share and Debenture)Rule which states about the issuing of Sweat Equity Shares.

Introduction

It’s been said by Nina Agdal  ‘What you sweat is what you get’. In a similar way, sweat equity shares are shares which are  provided only to those employees and directors of the company who are hardworking and immensely dedicated towards their organisation or who have an idea of technical know-how of the business, or the employees who have an expertise or have contributed significantly to the intellectual property rights of the company. 

The top-grade employees or directors get the privilege of sharing a part of the profit in a way of ‘securities’ in return for the investment made by the investors. The shares are issued in the way of discount or consideration other than cash. 

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Meaning of Sweat Equity Share

In simple words, Sweat Equity Share is a reward given to employees by way of discount or consideration. Suppose an employee ‘A’ has contributed towards making a software for his/her company for the betterment and expansion of the company and as a result of it the company was rescued from paying the cost of the software, he ought to benefit. In this case, due to ‘A’ immense contribution towards the welfare of the company, the Sweat Equity Share is issued in lieu to ‘A’.

Sweat Equity Shares under the Companies Act, 2013

Section 2(88) of the Companies Act, 2013 states that Sweat Equity Share is a share which is issued by a company to its directors or employees at a discount or for consideration other than cash for providing them know-how or making available rights in the nature of intellectual property rights or value addition, by whatever name called.

Employees

Rule 8 of Companies (Share Capital and Debentures) Rules, 2017, defines ‘employee’ as an individual, who is a permanent employee of the company, working in India or outside India, for at least one year.

Value Addition

Rule 8 (1) of the Companies (Share Capital and Debentures) Rules, 2017 defines Value Addition as the benefit which is derived from an expert or professional for furnishing know-how or for Intellectual Property Rights that belong to them for which the consideration is not paid then the sweat equity share is issued to them. (1)

Importance of Sweat Equity Share

• The importance of sweat equity shares is majorly noticed by the start-up companies, as when a company is new or has freshly started up, it requires lots of funds to hire employees, or funds for promotion of the company, for marketing purposes and many more such services which are required for the expansion of the companies. The start-up companies usually lack funds to raise their capital due to which many times the startup company fails to survive in the long run. As the funds are low so it’s hard to provide any monetary rewards to the employees working in the start-up company which may sometimes be little demotivating for the employees who are putting their effort and toil. In such cases, sweat equity shares provide the shade to the start-up companies which help them grow through the market competition and survive in the long run. 
• The sweat equity shares also play an important role in large, well-settled companies as these companies have large funds to invest in the market and get securities in return, and these return can be shared with the hard-working employees of the company who are entitled to  such rewards exclusive of their remuneration. It also helps in boosting the morale of such employees for a better working environment in the company. Employees with special knowledge, having technical know-how deserve to be rewarded apart from their basic remuneration.

Conditions for issue of Sweat Equity Share

Section 54 of the Company Act, 2013 lays down conditions to be complied with while issuing sweat equity shares. When the shares are issued to the employees under Rule 8 (1) of the Companies (Share Capital and Debentures) Rule, 2014 whereby passing a special resolution  as mentioned under Section 54 of the Company law, then following details like  number of shares, the consideration price, the market price and the class of employees have to be specified.

In the case of listed companies, SEBI guidelines have to be followed and in the case of an unlisted company, Rule 8 will be complied with. Rule 8 states that the special resolution will be valid only for 12 months, and within that time span the sweat equity shares may be issued.

Sweat equity share can be issued only when the following terms are fulfilled:

1. A special resolution is needed to be passed with the permission of  3/4th members entitled to do so. The allotment is required to be made within the set period of 12 months from the date of passing the special resolution.
2. The company is not allowed to issue the share for more than fifteen percent of the existing paid-up equity share capital in a year.
3. The number of shares, current market price, consideration price, class of directors and employees is required to be specified in the resolution.
4. In the case of listed companies where the equity share of the company is listed then the Securities and Exchange Board of India’s Regulation,2002 will be followed and in case of non-listed companies, the securities are issued according to the rules prescribed. [Section 54(1)(d)]
5. The sweat equity share shall be locked in and non-transferable for a period of three years from the date of allotment when issued to employees or directors.
6. The company is required to be incorporated at least for a year.
7. Proper justification has to be given for the value of sweat equity share when determined by a registered valuer.
8. For the purpose of sections 197 and 198 of the Act, the amount of sweat equity share will be treated as part of managerial remuneration, if the following conditions are fulfilled:

1. When the sweat equity shares are issued to any director or manager.
2. When they are issued for consideration other than cash which will be carried to the balance sheet of the company. (2)

Quantum of Sweat Equity

The company is allowed to issue only 15% of the existing paid-up equity capital in a year or shares of the value of rupees 5 crore, whichever is higher and in case of any exceeding of the percentage or in the value of shares prior permission has to be obtained from the central government.(3)

Provided that in the case of issuance of the sweat equity share shall not exceed 25% of paid-up capital at any time in the company and also provided with an exception where sweat equity share can be exceeded up to 50% and not beyond that of its paid-up capital up to five years from the date of its incorporation in case of start-up companies recognized by the Government of India(4)

Valuation of Sweat Equity Shares

The procedure for valuation of sweat equity shares are as follows:

1. A registered valuer is required to determine the price limits of the sweat equity shares that are to be issued.
2. After determining, he is required to submit a proper valuation report justifying the reason for such valuation to the Board of Directors.
3. The valuer is required to take account of all the details of intellectual property rights and know-how of any value additions made by the employee for which the sweat equity shares are being issued.
4. After taking account of all the information mentioned under points (A), (B) and(C) a copy of gist has to be sent to the shareholders providing the notice of the general meeting.

Procedure for issuing

The first step to issue the sweat equity share is by passing a special resolution at a general meeting which is held by summoning the board meeting in order to consider the proposal on the issue of sweat equity shares and to fix up the date, time, place, and agenda for the same.

Second, the resolution is passed by the majority votes of the shareholders through postal ballot as specified under companies(Passing of the resolution by Postal Ballot) Rules,2001 which shall also be adopted and this Special Resolution will be filed with the Registrar of Companies (ROCs) in Form. No. 23.

Third, after the Special Resolution has been passed the Explanatory Statement is maintained consisting of the following details:

1.The time, date and venue of the meeting

2.Reasons or justification for the issues;

3.Numbers of shares, consideration and the class of persons to whom such equity shares to be issued

4.Value of the Sweat Equity shares along with the valuation report.

5.Name and details of the person to whom the equity share will be issued and his/her relation with the company.

6.The rate of sweat equity share

7.The issuance of such equity which may affect the ceiling of managerial remuneration. 

8.The accounting policies specified by the Central Government affecting the company’s statement.

9. Diluted earnings per share shall be calculated in accordance with the Accounting Standards specified by the Institute of Chartered Accountants of India.

Fourth, in the case of any shares to be issued on the day of a grant of sweat equity share is equal to or exceeds 1% of the issued capital (during any one year, to identify employees and promoters) then a separate resolution shall be passed.

Fifth, once the approval is made by the shareholders, sweat equity shares are issued and allotted by the Board of Directors to the respective directors or employees then the company is required to file e-form-2 and e-form 3 with the ROC in due course. 

Sixth, once the resolution is filed with the registrar in Form MGT-14, a board meeting is called up with the way of due notice to approve the allotment of sweat equity shares accordingly.

Seventh, once the resolution is passed for the allotment of the shares the company is required to file Form PAS-3  within 30 days of passing of the Board resolution for the allotment of sweat equity share.

Eighth, on allotment the company is required to maintain a register of Sweat Equity in Form SH-3 at the registered office of the company or any other place as the board may decide.

Ninth, the entries made in the register has to be authenticated by the Company Secretary appointed by the company or any such other person appointed by the Board of Directors of the Company. (5)

Issue by a listed company 

Sweat equity share is issued to employees and directors in the way of discount or consideration other than cash by the companies whose equity shares are listed on a recognized stock exchange in accordance with section 79A of the Companies Act, 1956. Nothing contained in these regulations can be applied to any unlisted company. 

General Meeting is held by calling Board of Directors with at least 7 days prior notice to propose the purpose of passing a special resolution for considering the issue of sweat equity shares clause (a) of subsection (1) of Section 79A of the Companies Act, 1956 in which explanatory statement to be annexed. The promoters will be subjected to the requirement according to the procedures specified in Regulation 6 of these Regulations; the promoters to whom such sweat equity shares are to be issued are not allowed to participate in such resolution.

Pricing of Sweat Equity Share by the listed company

The price set up for the sweat equity share shall not be less than the higher of the average of the weekly high and low of the closing prices of the related equity shares during the last six months preceding the relevant date or during the two weeks preceding the relevant date, whereas ‘Relevant Date’ here means the date which is thirty days prior to the general meeting held by the shareholders.

In case where the shares are listed in more than one stock exchange but shown by only one on the given date of the stock exchange then the price of that stock exchange will be considered; also when the shares are repeated(quoted) in more than one stock exchange then the stock exchange with the highest trade volume during that day will be considered.

If the shares are not shown on the given date then the next day of quoting that share will be considered.

Valuation of Intellectual Property by the listed company

The valuation of intellectual property rights of know-how of other value addition is done by the merchant banker.The duty of a merchant banker is to consult such experts and valuer as he deems fit in regard to the nature of the industry and property or other value addition.

The merchant banker is also required to get a certificate from an independent chartered accountant to make sure that the valuation of intellectual property or any other additional valuation is made in accordance with the relevant accounting standards.

Accounting Treatment

Sweat Equity shares are issued for non-cash consideration it is usually treated in the form of depreciable or amortizable assets (amortizable and depreciable is a method of spreading the cost of an asset over a specified period of time), which is to be carried by the balance sheet according to the relevant accounting standards.

When not treated as an amortizable asset it will be mentioned as expenses (as when it is issued for non cash then the capital side gets increases and asset side remains the same so just to maintain the balance of both the side, we nullify and give the reverse effect in the balance sheet), as provided by relevant accounting standards.

Placing of Auditors before Annual General Meeting:

The Board of Directors is required to place a certificate regarding the issue of sweat equity share before the shareholders to make sure that the sweat equity share has been issued in accordance with the Regulations and Resolution of the issue of sweat equity share by the company.

The Ceiling on Managerial Remuneration

For the purpose of section 198, 309, 310, 311 and 387 the amount of sweat equity share will be issued as a part of Managerial Remuneration only on the following grounds:

• The sweat equity share is issued to any director or manager; and
• They are issued as consideration other than cash.

Lock-in of sweat equity shares

The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 will make a contribution after the issuing of sweat equity shares only if a company makes a public issue; The Sweat Equity share shall be locked in for a period of three years from the date of allotment.

Listing

The sweat equity share will be listed by the company only if it has complied with all the Regulations and Resolutions.

Applicability of Takeover

It will be applicable only if it has acquired with all the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations 1997.(6)

Issue by an unlisted company

The sweat equity share of the unlisted company is issued by the way of writing 7 days prior notice to all the directors mentioning the agenda and venue to address a Board Meeting for the proposal of issue of sweat equity shares( 79A of the Companies Act, 1956).

The company is required to ensure that the share capital of the company is increased by the proposed issue of sweat equity shares and if not then necessary steps have to be taken to increase the authorized share capital of the company; The company can issue share capital only after the expiry of one year in which the company was entitled to commence.

Pricing of Sweat Equity Share by the Unlisted Company

The company is not allowed to issue sweat equity share more than 15% of the existing paid-up equity share capital in a year of shares issued in the value of Rupees 5 crores, whichever is higher.

In case of issuance of sweat equity shares in the company shall not exceed 25% of the paid-up equity capital of the company at any time.(Rule 8(4) of the Companies Share Capital and Debenture Rules,2014).

Valuation of Intellectual Property by the unlisted company

To determine the fair price for the issue of sweat equity share, valuation report is obtained by the registered valuer to keep a record of valuation of intellectual property rights or of know-how provided or other value additions for which sweat equity shares are to be issued and also a proper justification is required to be given for the same. [Rule 8(6) and 8(7) of the companies (Share Capital and Debentures) Rules, 2014] 

Accounting Treatment

When a sweat equity share is issued for non-cash consideration it takes the form of depreciable or amortized asset which is required to be carried to the balance sheet according to the accounting standards, or if it’s not issued for non-cash consideration then it will be expensed off  just to nullify the effect (as when it is issued for non cash then the capital side gets increases and asset side remains the same so just to maintain the balance of both the side, we nullify and give the reverse effect in the balance sheet) , as provided in the accounting standards.

When a sweat equity share is issued during an accounting period, the accounting value of it will be treated as a part of the compensation to the employee or the director in the financial statements of the company, if it’s not issued according to the acquisition of an asset. [Rule 8(11) of the Companies (Share Capital and Debentures) Rules, 2014]

The ceiling of Managerial  Remuneration in an unlisted company:

The amount of sweat equity share will be treated as a part of managerial remuneration in accordance with the purpose of section 197 and 198 of the Companies Act, 2013 if the following conditions are fulfilled:

1. The sweat equity share shall be issued to any director or manager; and
2. They are issued for consideration other than cash. [Rule 8(10) of the Companies (Share Capital and Debentures) Rules, 2014]

Lock-in of sweat equity shares

The sweat equity shares issued to employees and directors are required to be locked in/non-transferable for a period of 3 years from the date of allotment, and the share certificate of lock-in has to be stamped in bold or mentioned in a prominent manner the expiry of the lock-in period of the sweat equity shares.[Rule 8(5) of the Companies (Share Capital and Debentures) Rules, 2104].

Disclosures in the Director’s Report

For the fair valuation of the sweat equity share it is important to make a proper disclosure of the Director’s report. The director is required to disclose all the financial statement of the year and Report of Directors should be attached to the Balance Sheet laid before the AGM.

The intention of the Director’s report is to provide the shareholder with the overall financial statement, operation and business scope of the company in a detailed form. Many previous provisions of the Companies Act, 2013 makes it mandatory to disclose the Director’s Report which was later amended by the Central Government in the Companies Act, 2017.(7)

The following are the details of the Sweat Equity Share which is required to be disclosed in the Director’s report of the year:

1. Detailed information of the class of directors and employees to whom the sweat equity shares are to be issued.
2. Detailed note of the class of shares issued as Sweat Equity Shares ;
3. Numbers of shares issued to employees and directors and as well as key managerial personnel showing the number of such shares issued to them as consideration other than cash and names of the individuals holding one per cent or more of than one per cent of the issued share capital.
4. Proper justification of the issue of shares to be mentioned.
5. The terms and conditions for the issue of the shares to be mentioned along with the price formula.
6. A total number of shares arising as sweat equity shares and the percentage of the shares of the total post issued and paid-up share capital is to be mentioned.
7. Any sort of amount of benefit received to the company in accordance with the issue of sweat equity shares.
8. The diluted earnings per share (EPS) is calculated to gauge the quality of the Company’s earning per share for the issuance of sweat equity shares. (8)

Sweat Equity Shares Accounting Treatment

When the sweat equity share is issued for a non-cash consideration the following steps are required to be taken according to the valuation report thereof obtained from the registered valuer :

Firstly, when the sweat equity shares are issued for non-cash consideration it is treated as a  depreciable or amortizable asset and shall be carried to the balance sheet according to the accounting standards, whereas if not issued for non-cash consideration then it will be expensed off as per the accounting standards.

Secondly, as per the Sections 197 and 198 of the Act the amount of sweat equity share will be treated as a form of managerial remuneration if the following conditions are fulfilled:

1. If the sweat equity shares are issued to any director or manager; and
2. If they are issued by the way of consideration other than cash which does not take the form of an asset that can be carried to the balance sheet of the company as per the accounting statement.

Thirdly, when the sweat equity shares issued in an accounting period the amount of sweat equity share will be treated as a form of compensation to the employees or the directors in the financial statements when the shares are not issued pursuant to the acquisition of an asset.

Fourth, In case when shares are pursuant to the acquisition of an asset, whose value is determined by the valuation report will be carried in the balance sheet as per the Accounting Standards and such amount of the accounting value which exceeds the amount of assets acquired will be treated as a form of compensation to the employee or the director in the financial statement as per the valuation report of the company. (9)

Startups and sweat equity

Startup companies in India has been a platform for the many new digital businesses with the intention of the government to set up a new digital economy which has achieved great success like UPI,BHIM, e-KYC etc, but still there are many startup companies who have been struggling to make an impactful entry due to the high and increasing competition it is facing many obstacles as a founder.Starting out company can be the biggest challenge for that company to survive in the long run.

The Prime Minister Narendra Modi along with the Finance Minister Arun Jaitely announced their Budget of the year 2016 which intended to provide multiple benefits to startup companies and a  clean environment for them to set up and prosper in the compex Indian regulatory setup. The relaxation was provided to the two provisions of the Companies Act, 2013 regarding inability to accept Employee Stock Options (ESOPs) and the limited leeway to startups for issuing sweat equity.

ESOPS and sweat equity shares play an important role as startup company were dependent to seek equity funds from investors (seed funder, angel investors, venture capitalists, and private equity funds, in that order) where there was a chance of natural consequences for the founders to dilute in their own equity holding, which could lead to losing the principal control over their startup and also cut the benefits of the startup’s success.

The position after the Amendment made under the Companies (Share and Debentures) Third Amendment Rules 2016 for the norms of ESOPs and sweat equity for startups have been very helpful as:

1.  ESOPs now allowed companies that qualify as ‘startups’ to issue ESOPs to founders or even to those directors that hold more than 10 percent of the share capital which was previously not permitted. 
2. Whereas the Amendment liberalised the issuance of sweat equity shares by increasing the limit up to 25 percent of the paid-up equity share capital to 50 percent to the companies qualifying as ’startups’.

After 16 January 2016 when the Government intended to make a digital economy by helping out with tremendous benefits to promote the startup companies, new Amendments were added in the Companies (Share and Debentures) Rules,2014 which lead to the benefits like where any employee joining the company was able to issue a sweat equity shares, which was an advantage to the employees as they were duly awarded for any  ‘value addition’ from the time of joining the company.

The startup companies can issue sweat equity shares within one year of commencement of business which was not the case earlier as many restrictions prevailed with the issue of sweat equity share.

The impact of this Amendment has been very powerful to many Indian startups as they are externally funded which helped them to figure out legitimate means of maintaining their shareholdings at meaningful percentages of the fully diluted share capital, which advantaged them in seeking better growth for their company and faster exit. Both the changes helped in providing a leeway to founders for the better structuring their cap tables. (10)

Taxability of sweat equity shares 

To make the sweat equity shares taxable in the hands of employees at the time when the shares are transferred or allotted the following conditions are required to be satisfied:

1. The security is required to be either a specified security or sweat equity shares as defined in Section 2(h) of the Securities Contract (Regulation) Act, 1956.
2. Such security are required to be allotted or transferred on 1st April 2009 or after and any security allotted or transferred before April 1, 2009 will lie under Fringe Benefit Tax.
3. Such security are allotted either directly or indirectly to the employee or former employee.
4. Such security or sweat equity shares are allotted by the employer or former employer to the employee.
5. The security allotted may be either free of cost or at a concessional rate.

Calculation of Fair market value

After the above conditions are satisfied the taxable amount is calculated by the valuation of fair market value of securities at the date of exercise of an option by the employee.

Whereas, fair market value will be calculated as:

 Quoted Shares

1. If the share of the company are listed on any stock exchange then  –  average of opening price and closing price
2. If the share of the company are listed on more than one stock exchange then  – average of opening price and closing price in the stock exchange in which highest volume is traded.
3. If the share is not traded on the date of exercise of option then the fair market value be the closing price of the shares on any stock exchange on a date closest to the date of exercise of option will be taken as fair market value. 

Unquoted Shares:

In case where the shares are not listed on any stock exchange then the Merchant Bankers are required to determine the fair value of shares on the specified date; Specified date is a date where the option is exercised or any date earlier to it and not being a date which is 180 days earlier than the date of exercise of that option.

Conclusion

Sweat equity share has been a great help to all those employees who have contributed immensely towards their services and provided some sort of benefits to the company in a way of intellectual property rights or any other value addition. Sweat equity share is provided to such employees apart from their remuneration, where they’re able to hold a part of share in the investment made by the companies. 

The post scenario of 2016 was very impactful as the Government of India also come up with some new amendments for the issue of sweat equity shares in the Companies (Share and Debentures) Third Amendment Rules, to include some special provisions for startup companies in India. Overall an effective step has been provided till now for the welfare of the employees who has just joined the company.

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This article has been written by Anubhav Garg, a student of Delhi Metropolitan Education. In this article, he has talked about recent amendments made in NidhiRules and its implications on already existing and under formalities companies seeking the status of Nidhi.  

What are Nidhi companies?

The word Nidhi means ‘Treasure’ in Hindi. As the name suggests, it relates to finance and funds. Nidhi Companies are governed by the Nidhi Rules, 2014 (the ‘Rules’) and are incorporated under the Companies Act, 2013 (the ‘Act’). As per Section 406 of the Act, Nidhi companies are incorporated with the goal of inculcating the habit of thrift and savings among its members. Nidhi companies accepts deposits and lends to its members exclusively, for the purpose of their mutual benefit. Also referred to as ‘Mutual Benefit Society’, the core business of Nidhi companies is borrowing and lending from its members. In addition to the Nidhi Rules, Nidhi companies are also governed by the Central Government, who has the power to issue notifications, in accordance with the Act, pertaining to any modification, exception and/or adaptations for Nidhi Companies.

Nidhi companies are one kind of Non-Banking Finance Companies and only public companies can be declared as Nidhi companies under Rule 4(1) of  the Rules and enjoy the freedom from central provisions of the Reserve Bank of India Act, 1934 (RBI Act) like mandatory registration,creation of reserve fund, maintenance of liquid assets and other RBI instructions under Section 45-IA of the RBI Act. However, there are certain provisions of the RBI Act which Nidhi companies have to comply with. These provisions include interest per cent on deposits, prohibition from paying brokerage on deposits, ban on advertisements and the requirement of submission of certain returns. It is pertinent to note that while certain provisions of the RBI Act are applicable to the Nidhi companies, it doesn’t mean that the RBI is the regulatory authority for Nidhis. The Ministry of Corporate Affairs (MCA) is the regulatory authority for Nidhi companies.

What are the amendments made to Nidhi Rules, 2014?

Nidhi Rules is the code which regulates the functioning of the Nidhi compani,es. Recently, on 1st July, 2019 the Ministry of External Affairs issued an official gazette introducing certain amendments to the Rules,naming it Nidhi (Amendment) Rules, 2019. Discussed below are the major amendments and its implications made in the Rules. 

1. Application

A new clause 2(d) has been inserted which further elucidates the applicability and jurisdiction of Nidhi Rules, The clause provides, “every company declared as Nidhi or Mutual Benefit Society under sub-section(1) of section 406  of the Act”. The substantial amendment is that now, any company declared as ‘Mutual Benefit Society’ under section 406(1) of the Companies Act, 2013 will also come under the purview of NIdhi Rules.

2. Definition of Nidhi Companies 

Definition of Nidhi companies has been added as section 3(da) to give a clarity of what kind and nature of companies fall under the definition of Nidhi and under the jurisdiction of Nidhi Rules. Section 3(da) provides that “Nidhi” are those companies which have been incorporated with the aim of inculcating the habit of rational utilization of money and savings amongst its members,and accepting deposits and lending the same to its members in need only, in order to mutually benefit its members. This class of companies are governed by the Ministry of External Affairs, which acts under the authority of an agent on the behalf of the Central Government.This is the same text from section 406(1) of the Companies Act, 2013 but in this amendment it has been moved to the definition clause of Nidhi Rules for the sake of comprehension and clarity.

3. Form NDH-4

A new application form NDH-4 has been introduced for those companies, which wish to get the status of Nidhi by the way of insertion of a new section namely 3A. It is one of the major alterations which have been introduced under these amendments. On receiving an application of a public company under Form NDH-4 along with the prescribed fees, if fully convinced that the company has complied with all the requirements under these Rules, the Central Government may declare the company as a Nidhi company In the official gazette.

All the Nidhi companies incorporated under the Companies Act, 2013 on or after the commencement of the amended rules, are required to mandatorily file Form NDH-4 within sixty days from:

• The last date of the one-year time span from the date of its incorporation; or 
• The stipulated time period put to which extension of time has been granted by the Regional Director under sub(3) of Rule 5.

It is envisaged in section 3A that nothing contained in it stops Nidhi companies from filing Form NDH-4. It is also been laid down in the new provisions that the Nidhi Company not abiding the Nidhi Rules shall not be allowed to fill form SH-7 (Notice to Registrar of any alteration of share capital) and Form PA93 (Return of Allotment) form.

4. Particulars pertaining to incorporation and its incidental matters

Some parts of Rule 4 of the Rule have been omitted under the amendment. This rule relates to the incorporation and incidental matters pertaining to the Nidhi companies. Rule 4 lays down the provisions including, the kind of company which can be incorporated as Nidhi, the minimum equity share capital for Nidhi, when can Nidhi issue preference shares, Memorandum of Association of Nidhi and Nidhi Limited’ after Nidhi company’s name.

In sub-rule (1) of Rule 4 of the Rules, “to be incorporated under the act” has been removed and in sub-rule(2) of Rule 4 of the Rules, “company incorporated as a” has been stroked-off.

The said amendment has been done to give better clarity of the applicability of the Rules and to cut-off the ambiguous and unnecessary information and make it more subject friendly the Rules.

5. Time frame provided to ensure compliance of prescribed requirements 

Under Rule 5(1) of the Rules, the words “from the commencement of these rules” have been substituted with “from the date of its incorporation”. In this way, Nidhi companies have been given a period of one year from the date of incorporation instead of the date of commencement (which was unviable) to ensure that they have:

• A minimum two-hundred members;
• Net Owned Funds of INR Ten lakhs or more; and 
• Unencumbered term deposits of at least ten per cent of the total outstanding deposits as prescribed in Rule 14 of the Rules and a ratio of Net Owned Funds to deposits of not more than 1:20.

Further, Rule 5(3) of the Rules has been expanded and has been made more comprehensive. When a Nidhi company fails to gather minimum two-hundred members or arrange a Net Owned Fund of Ten lakhs or more, they have to apply to the Regional Director in Form NDH-2 along with fee specified in Companies (Registration Offices and Fees) Rules, 2014 for more time within thirty days from the close of the first financial year. The Regional Director has to pass the order considering the said application within thirty days of its receipt. But before, there was no specified limit about how much extension the regional director can grant. With these amendments, it has been made one year maximum from the date of receiving the application of extension.

In Rule 5(4) of the Rules, after “contained in sub-Rule (1)”, “and gets itself declared under sub-section (1) of Section 406” has been inserted. This means that, when a Nidhi company fails to comply with the Rule 5(1) of the Rules, beyond the extended time of one year. Such company shall not accept any further deposits from its members until it has complied with the required provisions and also gets itself declared as a Nidhi company under Section 406(1) of the Companies Act, 2013, if not declared already.

6. Issue of equity shares

Under Rule 7(1) of the Rules, after “shall issue”, the words “fully paid-up” have been added. It means that, now Nidhi companies can issue only fully paid-up equity shares of the minimum value of INR ten each. This means that Nidhis can’t issue the equity shares on a pro-rata basis etc.

Rule 7 of the Rules provides the provisions relating to the minimum nominal value of equity shares it issues, the minimum amount of equity shares every Nidhi has to allot to the deposit holders and the minimum amount of equity shares every savings account holder and recurring deposit account holder shall retain.

7. Application form for placing a deposit

Rule 12(1) of the Rules states that every application form for placing a deposit with Nidhi, must contain certain particulars. In addition, 12(1)(ba) has been inserted, which provides that the application shall also contain the date of declaration or notification as Nidhi.

Further, in Rule 12(2)(a) of the Rules, the “Registrar of Companies” has been replaced with “National Companies Law Tribunal”. This means that the depositor will now approach National Companies Law Tribunal (NCLT) instead of Registrar of Company in case of non-payment (in whole or partly) as per the terms and conditions of such deposits. This provision will give depositors of Nidhis’ more confidence as the NCLT has wider jurisdiction to grant reliefs and remedies.

9. Power of the Central Government 

Under Rule 23(2) of the Rules, the word “Regional Director” has been replaced with “Central Government”. Hence, now if any Nidhi fails to comply with the provisions of the Rules or to operate in terms of Article of Association (AOA), then the Central Government will be will appoint and direct a special officer and not the Regional Director to take over the control of that Nidhi company. Also, the Central Government will be the one to hear the plea under such circumstances.

Rule 23 of the Rules provide for the enforcements and powers of the Central Government over the Nidhi companies to make them comply with Nidhi Rules. These powers include calling for   information or returns from Nidhi as government may deem necessary and may engage the services of chartered accountants, company secretaries, cost accountants, or ant firm from time to time to assist itself in carrying out its duties. It also provides the appointment of special officer by the Central Government when a Nidhi company fails to comply with its Memorandum of Association or AOA. 

10. Declaration as Nidhi company

Rule 23A states that:

• Every company functioning as Nidhi or Mutual Benefit Society but which hasn’t yet applied or not yet notified as Nidhi; and
• The companies which have been incorporated under section 406 of the Companies Act, 

have to get themselves declared as Nidhi in accordance with the newly inserted Rule 3A. This is to be done within the period of one year from its incorporation or within six months from the commencement date of these Rules i.e. 15th August, 2019, whichever is later.

Further, it has been mentioned that the company not abiding the said provision will not be allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PA9-3 (Return of Allotment).

11. Form to be filled by already registered Nidhis

The companies which have already been declared as Nidhi under Section 620A(1) of the Companies Act, 1956, they are required to file Form NDH-4 along with the fees prescribed in Companies (Registration Offices and Fees) Rules, 2014, in order to update their status under the new provisions.

No fees will be charged if the said companies make their registration within six months from the incorporation of the new Rules i.e. 15th August, 2019. The consequences for non compliance is again, not being allowed to file Form No. SH-7 (Notice to Registrar of any alteration of share capital) and Form PA9-3 (Return of Allotment).

Conclusion

Nidhi (Amendment) Rules, 2019 has focused on comprehending the regulations and smooth functioning of corporate machinery and statutory framework by way of elucidating and introducing provisions pertaining to definition, applicability and jurisdictional authority for Nidhi companies. Further, it has also emphasized on provisions pertaining to raising capital, appointment of Special Officer, requisites for incorporation of a Nidhi company and other provisions. All the amendments are likely to contribute positively towards achieving better legal enforceability of the Rules and for the smooth functioning of companies assisting the rural and conservative people to manage their finances more effectively.

References

For your reference, check out the following links: 

• Nidhi (Amendmet) Rules, 2019.
• NIdhi Rules, 2014
• Form NDH-4

The post Nidhi Amendment Rules, 2019 – Everything You Need to Know appeared first on iPleaders.

This article is written by Ambika Chaudhary, pursuing a Diploma in Intellectual Property, Media and Entertainment Laws from Lawsikho.com. Here she discusses “Top 10 Indian and Global Trademark Wars of the last decade”.

Introduction

Trademarks are one of the most important intellectual property rights as they help the customers identify and distinguish between the products of one company from others. This is why a company with an established trademark will do anything to protect it from being copied by competitors. Trademark wars are cases wherein a company uses a name, logo or tagline already registered by another as a trademark with the Trademark Registry. The company which has already established and registered a trademark, will then either demand the infringing company to take down the concerned mark and if that is in vain then it will approach the concerned authorities. Trademark wars are becoming more and more common from the past two decades.  This is because companies are becoming more aware of their rights and how to protect the same. Nowadays companies have special teams just to keep a check that no other company is using their registered marks. The purpose of a trademark is defeated when a smaller/newer company uses a mark which is similar to an established mark, as that would confuse the public that the two products are from the same maker. This would essentially help the infringing company to benefit out of the established goodwill of the other company. 

This paper aims to discuss 10 of the most recent trademark wars that have taken place globally and within India.

Indian Cases

1. Titan v. Saint Watches [1] 

In this case, the plaintiffs (Titan) had filed an application before the Deputy Registrar of the Trademark Registry where they challenged the logo of the respondents. The appellants claimed that they have been in the business of manufacturing and selling watches since the year 1987 and the respondents recently entered the market and created a logo which is deceptively similar to their established logo. However, Deputy Registrar dismissed their application. The appellants then appealed to the Intellectual Property Appellate Board (IPAB) where the matter was remanded back to the Deputy Registrar. The IPAB gave reasoning that the Deputy Registrar should have also considered grounds raised by the respondents. 

The appellants claimed that the Registrar failed to take cognizance of the fact that the respondent’s logo was very similar to their registered logo and the class of goods was also the same i.e. watches. This could easily cause the public to be confused between the products of the two companies. The challenged it by invoking section 11(1) of the Trademark Act, 1999. 

The respondents challenged the application filed by the appellants on the ground that it was barred by limitation and hence was not maintainable. The IPAB held that the Deputy Registrar should have considered both the arguments and hence they remanded the case. 

2. ITC v. Cadbury’s [2] 

This case was brought before the Intellectual Property Appellate Board (IPAB) by ITC Ltd. that claimed that the defendants owned three trademarks registered in the country. These were on the marks “Chocolate Éclairs”, “Chocolate Éclairs Pop” and “Orange flavoured Chocolate Éclairs”. The plaintiffs submitted that the marks have not been used by the defendants for several years. The mark “Chocolate Éclairs Pop” has not been renewed since the year 2006. The ground of non-user falls under section 47 of the Act and hence they are liable to be removed. 

The IPAB ruled in favour of ITC Ltd. because it was clear from the facts that the respondents only wanted to keep their ownership on the marks and had not been using it. 

This case was decided after a struggle of 7-8 years. 

3. American Eagle v. Pantaloons [3]

This appeal was brought before the Delhi High Court by a US-based company named American Eagle. The appellants have contended that they have registered trademarks on the marks “American Eagle”, “American Eagle Outfitters” and an Eagle device (their logo). It is their submissions that the respondents have started to use the mark “Urban Eagle Authentic Outfitters” and the eagle device as their logo. 

The class of goods that the mark is being used for is the same. Therefore it can be inferred that the respondents had malafide intent to create such a deceptively similar mark. 

The Delhi High Court ruled in favour of the appellants holding that there is a prima facie case in their favour. The court thereby awarded an injunction but also gave the defendants a time period of a month to clear their stock which bore the concerned mark. 

4. Ajanta Pharma v. Theon Pharmaceuticals [4] 

The facts of this case were such that the plaintiff (Ajanta Pharma) filed an application seeking an injunction against the defendants (Theon Pharmaceuticals). The claim raised by the plaintiff was that the defendant started to use a trademark which was very similar to their registered mark. The former has registered the mark, “Feranta” and the defendants created a mark called “Ferinta”. The plaintiff filed the concerned application before the Bombay High Court. It brought to the court’s attention that it was a well-known manufacturer and exporter of medicines and pharmaceuticals. It also proved that it has been in this field for around 4 decades and it also has a registered trademark on the concerned mark. 

The defendant started using a deceptively similar mark and also applied for its registration. The plaintiff found out about this and filed an opposition. The marks are very similar and they also belong to the same class of goods under the Trademark Act. 

The Court held that the two marks are phonetically, structurally and visually similar and it is a clear case of infringement on the part of the defendant. The Court stated that this act of the defendants is a direct encroachment on the statutory and common law rights of the plaintiff.  It, therefore, granted a temporary and interim injunction against the defendants. The order was is in favour of Ajanta Pharma.

5. Fevikwik v. Kwikheal [5] 

This was a case brought before the Bombay High Court by the company manufacturing the famous product called “Fevikwik”. It is the contention of the plaintiff that the defendant has manufactured a similar product as theirs and has named it “Kwikheal”. They have also submitted that they have been in the market since the year 1959. They are worldly renowned for products such as adhesives, sealants, construction and paint chemicals etc. Their products are sold under various well-known trademarks such as “Fevikwik”, “fevikol”, “fevistick”, “fevibond” etc. With respect to the present application, they have brought to the Court’s attention that their mark “fevikwik” was registered as a trademark in 1987 underclass 1 products of the Act. They also obtained registration for the distinctive packing of the product “fevikwik” in the year 2008(class 16). 

It is their contention that the mark of the defendants is visually and phonetically similar to their registered and established mark. It is also prima facie clear that the intention of the defendants to create a mark so similar to theirs is to pass their products as the same as the plaintiff’s products. The defendants have been in the business only since the year of 2011. 

Another very important fact to be considered was that the defendant used the tagline “one drop instant adhesive” for their product and this was also the same as the tagline used by the plaintiff. The plaintiff had also registered this tagline under class 1 and 16 of the act.  

The Court ruled in favour of the plaintiff and it held that it is prima facie clear that the defendant had a dishonest intention. The Court held that it was a clear case of trademark infringement and passing off.

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6. Nandhini Deluxe v. Karnataka Cooperative Milk Producers Federation Ltd.[6] 

The case was between the two marks of Nandhini and Nandini. The latter mark had been used for milk and milk products and the former for a restaurant and the edibles being sold by them except milk and milk products. The logos of the two marks were also visibly very dissimilar and hence the registrar had allowed the registration of the mark Nandhini. The Court upheld the decision on the ground that the condition under section 11, about causing confusion in the public was not fulfilled. This case was one of the first on similar-sounding marks under the Trademark Act, 1999. 

Global cases

1. Starbucks Coffee v. Coffee Rocks [7]

The plaintiff filed an opposition before the European Union Intellectual Property Office (EUIPO) against the respondent’s application for registration of mark “Coffee Rocks”.  This opposition was on the basis of registered trademarks of Starbucks in the UK and EU. The opposition division of EUIPO dismissed the opposition on the ground that the two marks and the logos are very dissimilar and cannot cause any confusion before the public. The Board of Appeal of EUIPO upheld the decision holding that there was a low degree of similarity between the two marks. 

Starbucks then appealed to the EU General Court. This Court, however, overturned the previous decisions and held that the two marks are similar. The Court held that the general appearance (the visual appearance of the logos as their colour and shape), the term “coffee” was common and the terms “Bucks” and “Rocks” are phonetically similar. The Court held that the Board of Appeal of EUIPO made a mistake in their decision. 

The Coffee giant, Starbucks has filed for trademark infringement against many other coffee companies and also certain independent businesses. 

2. Louis Vuitton v. Louis Vuitton Dak

This case was brought before a District Court in Seol by the French leather goods retailer “Louis Vuitton” against a South Korean restaurant that named the restaurant as “Louis Vuitton Dak”. The restaurant allegedly also used the famous LV logo and symbol on its packaging. The restaurant in its defense claimed that it was a play on the term “tong dak” which means whole chicken in Korean. 

The Court decided the case in favour of the French company holding that this was a clear case of infringement. The Court ordered the restaurant to change its name immediately and to pay a certain amount as fine for every day of non-compliance. The restaurant changed its name but it was still very similar to the previous mark. The new name was “chaLouisvui tondak” which was still hinted at Louis Vuitton. At this action of non- compliance the Court ordered them to pay a fine of 14.5 billion dollars. 

3. The LEGO cases

• LEGO v.  Lego [8] 

This case brought before the Shanghai District Court by the Danish Toy company LEGO. The company is the owner of several trademarks and copyrights on the mark “LEGO” and on the toys that they design. They submitted before the Court that a local Chinese company, Shanghai Tonghui Culture Communication Co. has started two “lego activity centers” and used the registered LEGO trademarks and logos to publicize them. They also decorated the centers using LEGO trademarks and logos. They did not stop at this. The defendants went ahead and created a website named as legosh.com. The plaintiff is also the owner of the domain names lego.com and lego.com.cn. The defendants used the plaintiff’s logo and pictures of their products even on their website pages. 

The defendants raised a defense stating that their actions were all authorised as they were hired to sell LEGO products and conduct after-sales activities.

However, the Court disagreed with this argument and held that all of the defendant’s activities would constitute a trademark infringement of the plaintiff’s registered marks. The Court said that the defendant had exceeded its scope of services by creating the Lego activity centers and the website where they used the logos, marks and products of the plaintiff to publicize their own business. The Court ordered the defendant to immediately stop the use of the website and the change the name of the activity centers. They were also ordered to compensate the plaintiffs for an amount of 500,000 Yuan. The Court held that the defendant’s actions made it clear that it wanted to establish a relationship with the plaintiff in public and use that it to obtain a competitive advantage. 

The decision was in favour of the LEGO Company and neither of the party appealed after this decision. 

Sometime after this decision, the Beijing High Court in 2017 ruled that recognised the LEGO logo and its name in Chinese as a “well known” mark in China.[9]

•  LEGO v. LEPIN [10]

This case was brought by the LEGO Company before the Guangzhou Yuexiu District Court in the year 2018. The plaintiffs alleged that the defendants copied their marks and the products. Even though this case mainly pertained to copyright infringement by the defendants it is a part of the LEGO Company’s fight against such copycat cases. 

After this decision in China, the LEGO Company filed an opposition to the application of Lepin to get their mark registered in the UK. The application was filed before the United Kingdom Intellectual Property Office (UKIPO). 

The LEGO Company submitted evidence before the Board showing the similarities between the two company’s logos, marks and products. Lepin had applied for registration in 2017. 

The UKIPO ruled in favour of LEGO Company stating that it is clear prima facie that Lepin tried to copy the marks and products of the Danish Toy company. The UKIPO cancelled Lepin’s registration. 

10. Supermac’s v. Mc Donald’s [11]

This case was brought before the European Union Intellectual Property Office (EUIPO) by and Irish food chain named Supermac’s. The plaintiff alleged that the defendant (Mc Donald’s) has not used the mark “Big Mac” in the European Union for more than 5 years. The plaintiff has alleged that because of the registration the defendant is preventing the plaintiff chain’s expansion in the UK and EU. 

The EUIPO gave a chance of hearing to the defendants however they could not provide any sufficient evidence to prove the usage the mark in EU since the past 5 years. 

However, the case was prima facie in favour of the Irish food chain, and therefore EUIPO cancelled Mc Donald’s trademark on the mark “Big Mac”. 

This implies that any company, also including Mc Donald’s can use the mark “Big Mac” in the EU. 

Conclusion

The aim of this article was to shed some light on what Trademark Wars are and how they are increasingly becoming more and more common. This paper has also discussed around 10 Trademark Wars of the past decade. All the different cases have been discussed in brief with the aim to provide brief knowledge about the same to the reader. The author hopes to have fulfilled the objectives of the article. With the aforementioned information, it is clear that no company leaves any stone unturned in order to ensure the protection of its marks.

References

1. Titan industries v. Saint Watches Pvt. Ltd., 2013
2. ITC Ltd. v. Cadbury Schweppes Overseas Ltd., (2013) IPAB 171
3. Retail Royalty Company v.  Pantaloons Fashion & Retail Ltd. & Ors., 2015 SCC OnLine Del 13988
4. Ajanta Pharma Ltd. v. Theon Pharmaceuticals Ltd., 2016 SCC OnLine Bom 10469
5. Pidilite Industries Ltd. v. Poma-Ex [roducts, 2017 SCC OnLine Bom 7237
6.  Nandhini Deluxe v. Karnataka Cooperative Milk Producers Federation Ltd., 2018 SCC OnLine SC 741.
7. Starbucks Corporation v. Hasmik Nersesyan, 2016
8. LEGO Juris A/S v. Shanghai Tonghui Culture Communication Co., (2017)  Hu 0107MC. No. 18141 of Shanghai Putuo District People’s Court
9. Toymaker Lego wins a court case against Chinese copycats, Reuters, 2018
10.  Lego Company v. Langjun Toys Company, 2017
11.  Mc Donald’s loses “Big Mac” trademark case to Irish chain Supermac’s, Reuters, 2019

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

The post Top 10 Indian and Global Trademark Wars of the last decade appeared first on iPleaders.

This article is written by Monika Verma, Student of Mahatma Jyotiba Phule Rohilkhand University, Bareilly. Here she has discussed on Law of Patent.

The human mind is a hub of creativity and his creative work is protected through several measures. There are several forms of protecting the creative activity which is a definite measure of encouragement for innovations, one such protection is Patenting.

As we know Patents are basically, monopolistic rights granted by the Government of the country to the owner of the invention in any field whatsoever, to make, use, manufacture and market the invention, provided the invention satisfies certain conditions stipulated in the law and such rights are granted for a limited period of time (for 20 years).

Patentability: Applying For Patent

As we know that not every invention get patented, Patent is granted to the owner of the Patent when his/her invention satisfies the conditions for Patentability. Such conditions are as follows:

• Novelty
• Inventive step or non-obviousness
• Industrial Application

Section 3 and Section 4 deals with the list of exceptions that do not fall under the invention and hence are non-patentable.

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Procedure for Grant of Patent

Persons entitled to apply for patents

—(1) Subject to the arrangements contained in section 134, an application for a patent for an invention might be made by any of the accompanying persons, in other words,— 

(a) By any individual professing to be the valid and first creator of the invention; 

(b) By any individual being the assignee of the individual professing to be the valid and first innovator in regard of the privilege to make such an application; 

(c) By the legitimate agent of any deceased individual who is preceding his demise and is qualified to make such an application. 

(2) An application under sub-section (1) might be made by any of the persons alluded to in that either alone or mutually with some other individual.

Filing of Application- Provisional/Complete: The Patent Application should be filed in form 1 accompanied by either provisional or complete specification in form 2 (If an applicant is not ready with the complete invention and need some more time for it then filing for the provisional application is recommended).  

Publication of Application: The publication of the application is made after the expiry of 18 months from the priority date and no fees are required by the inventor. A prior- request for publication can be made (Rule 24A) under section 11A(2) in form 9 (optional step).

Request for Examination(REF): The request for examination to examine the patent application is made in form 18 (including fee) within 48 months from the filing date by the applicant.                              

Examination issue of First Examination Report(FER): The controller sends the patent application to the examiner who checks for patentability as per the patentability criteria and creates the first examination report (FER). 

Any objection raised regarding the patentability requirements during examining the patent application has to have complied within 12 months.                              

Grant of Patent: Once the application meets all the requirements of patentability, the patent is granted to the inventor with the seal form patent office and is notified in the journal from time to time.

Opposition: Section 25 of the Act deals with the opposition to grant of patents and are of two types: Pre Grant (before the patent is granted) and Post Grant (after 1 year of grant of the patent). The opposition can be filed by anyone interested in the field of the invention in form 7 with the prescribed fee within 12 months from the date of publication of the patent.

Grounds of Opposition to Patent

• Obtained wrongly or fraudulently.
• The invention has been already published and known.
• Not involved in any of the inventive step.
• Not completed within 12 months.
• No clear and explicit description of the invention.
• Not considered an invention based on the subject matters for the invention.

Types of Patent Application

There are four types of Patent Application namely:

Provisional Application: This application is filed when the inventor is not quite ready with the invention and needs more time for the development of his invention and also don’t want to lose the priority date. After 12 months of filing the provisional application, the complete application should be filed otherwise the patent application will not be considered. The provisional certificate may or may not have claimed.

Complete Application: Filing of the complete application, describes that the invention is complete. The complete application have claims.

Elements of complete application:

• Description of invention

• The best method of performing

• Claims 

• Abstract 

Convention Application: When an inventor or an applicant files the patent application in Indian Patent Office claiming for a priority date based on a similar application filed in convention countries, such applications are convention application.

Patent Cooperation Treaty (PCT) – International Application: A PCT application is an international application governed by the Patent Cooperation Treaty further administered by the World Intellectual Property Rights (WIPO).

Divisional Application: When an applicant feels that he has come across an invention which is a slight modification of the invention for which he has already applied for or has obtained the patent, the applicant can go for the patent of addition if the invention does not involve a substantial inventive step. There is no need to pay the separate renewal fee for the patent of addition during the term of the main patent and it expires along with the main patent.

Patent of Addition:  when application made by applicant claims more than one invention, the applicant on his own files two or more applications, as applicable for each of the inventions. This type of application, divided out of the parent one, is called a Divisional Application. The priority date for all the divisional applications will be the same as that claimed by the Parent Application.

Documents Required For Patent Application

• • Application for grant of the patent in form 1
  • Proof of right to file the application from the inventor. 
  • Provisional/complete specification in form -2
  • Statement and undertaking under section 8 in Form 3
  • Declaration as to inventorship
  • Power of authority in form 26
  • Applicant’s signature and an appropriate date
  • If application pertains to a biological material obtained from India, submission of the permission from the National Biodiversity Authority
  • Request for Examination- Form 18
  • Requisite Statutory Fees

Rights of Patentee

Section 48 of the Act deals with the rights of conferring upon the patentee after the grant of the Patent.

• Exclusion of the third party to use, sell, or import the patented product without the patentee’s consent.
• Exclusion of the third party from using, selling or importing the patented product (if the subject matter is the process) without the patentee’s consent.

Infringement and Remedies for patent

Infringement of patent refers to the violation of the rights of the patent holder that is whenever a person exercises the rights of the patent holder without the patent owner’s consent, he causes infringement.

Types of Patent Infringement:

• Direct Infringement – Directly selling, marketing, or using commercially, any product which is substantially close to the patented product without the consent of the patentee.

• Indirect Infringement- Deceitful and accidental patent infringement in any incident is an indirect infringement.

• Contributory infringement- If the person knowingly infringes the rights of the patent holder, it refers to contributory infringement.

Some acts that would not lead to infringement are as follows.

• Government use: As per Section 100 a patented invention can be used by the central government for its own use and as per section 47, the patented invention can be imported by the government.
• Exemption on experiments and research: the use of a patented invention for experiments and teaching purposes does not come under infringement.
• Patented inventions on drugs and medicines can be imported by the government.
• Any patented invention on foreign vessel/ aircraft/ vehicle comes to India is not an infringement.

Filing suits for infringement

Section 104 of the Patent Act, 1970 deals with the filing of the suit by the patentee against the infringement. The patentee can file a suit in a district court or directly in the high court. Suit for patent infringement can be filed after the grant of patent yet the patentee can also claim for damages committed between the publication of patent application to the grant of the patent.

The burden of proof is on the patentee after the grant of the patent but if the invention is a process than the burden to prove for infringement lies on the defendant.

Remedies for patent

Section 108 deals with relief or remedies against the infringement. 

Injunction

The injunction is the most common form of Remedy granted in Patent infringement proceedings. The injunction is the order of the court restricting a person from beginning or continuing a course of action (infringing in this case) threatening or invading legal rights of a person.

Types of Injunction

There are two types of an injunction-

1. Interim Injunction
2. Permanent Injunction

Interim Injunction restricts the person temporarily from doing act and is granted before the full-fledged trial.

Permanent Injunction, on the other hand, restrains a person from doing a specified act and can be granted after the full-fledged trial. 

Injunctions are preventive, prohibitive or restrictive that is restricting someone from doing a specified act or mandatory that is, they compel or orders a person to do something.

The plaintiff can obtain interlocutory order in the form of a temporary injunction whenever a case of patent infringement occurs from the court by proving the following facts:

1.  The prima facie case of infringement
2. The balance of convenience in his favour
3. If the injunction is not granted he/she shall suffer irreparable damage.

Damages and account of profit

If the suit is in favour of the plaintiff, the court can award either damages or directs the defendant to render an account of profits but not both.

Exceptions and Limitations of Patent in India

Types of Exceptions & Limitations

Article 30 of TRIPS (Trade-Related Aspects of Intellectual Property Rights) allows for limited exceptions to the exclusive rights conferred by a patent.

• Exception on Non-Commercial use

The exclusive rights conferred by a patent does not allow the private or commercial activity.

The Government has the power to grant a license, known as Compulsory License (CL) , to a third party to use the patented invention (when the patentee is not using the invention for profit) so as to restrict the rights of the patentee for the purpose of preventing the abuse/ misuse of the rights by the property holder and to prevent the negative effect of such action on the public.

When the patented invention is not commercialized in India or the invention is not available to the public at reasonable prices or the invention is not manufactured in requisite amount, then the government grant such license. 

• Exception on Experimental / Scientific Research

Section 47 of the Act subsection 3 deals with the exception on  experimental and scientific use of Patented invention, the grant of a patent is subject to the condition that any product or process, in respect of which the patent is granted, may be made or used by any person for the purpose merely of experiment or research including the imparting of instructions to the students.

This form of exception grants third parties to carry out experiments and scientific processes for teaching students without infringing the rights of the patent holder.

• Exception on Regulatory use or Private use

Section 107A of the Indian Patent (Amendment) Act, 2005  deals with the exception of regulatory and private use also referred as bolar Provision, this exemption allows the manufacturers of generic drugs to undertake steps reasonably related to the development and submission of information required for obtaining marketing approval anywhere in the world in respect of a patented product without the consent of the patentee.

This provision allows the generic producers to market and manufacture their goods before the expiration of the term of the patent. Bolar Provision has been upheld as conforming to the TRIPS agreement and is used in several countries to advance science and technology. 

• Exception on Foreign Vessels, Aircraft or Land Vehicles 

Section 49 the Indian Patents Act deals with the said exception, when the foreign vessels, aircraft, or land vehicles accidentally or temporarily comes to India, the patent rights are not infringed when the patented invention is used exclusively for the needs of foreign vessels, aircraft, or land vehicles and other accessories.

Conclusion

Patenting in India has protected the intellectual property of many innovators and has been useful in the growth of commerce and technology in India. One has to go through a certain process for the grant of Patent. Grant of Patent confers monopolistic rights upon the Patentee excluding the third party to sell, use, manufacture or import of the patented product without the consent of the patentee. If someone tries to use, sell, manufacture or import such patented products leading to the infringement of the rights of the patentee, the patentee can sue the person. 

To know more about  Guide to IPR and Patent Law in India, Please Click here.

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This article is written by Shruti Singh from LLoyd Law College, Greater Noida.

Introduction

• Meaning and definition

When the plaintiff on behalf of the claimant filed a suit for choosing the actual owner of the property then it is called an interpleader suit. When a Plaintiff is not in the direct possession of the property or thing, he files a suit. Petitioner has the indirect possession of the property. There is more than one defendant in this suit. Because in this suit more than one defendant can file the suit for the claim of property. When the actual owner of the property dies without transferring the property to anyone then the property transfer becomes the interpleader suit. Other than that the plaintiff may file a suit for the movable or immovable property to deliver the property to the defendant because more than one person has filed a suit for the claim of property. Debt is required in this suit or some amount of money for the dispute which is between two defendants. Defendants can claim some debt from another defendant of the property. Only the plaintiff is the one who cannot claim any cost and is also ready to deliver the property to the defendants. Interpleader is defined in Section 88 of the Civil Procedure Court. 

Examples

1. Sanjeev has a 2 BHK flat in the co-operative colony. He has two wives. Because of some diseases, he caused to die. After his death, his wives claimed the property. The father of Sanjeev filed a suit in the court to decide the actual owner of the property.
2. Akhil has 2 crores fix deposit. He has two wives and both wives have 1 child. Both of them claim the money for their child maintenance. The bank filed a suit in the court to know the order related to the real owner of the money for the maintenance of the child. 

•  Res Judicata   

Res Judicata is the oldest law that is defined in the Civil Procedure Court under section 11. Res Judicata means the suit which has already got the judgment from the court. If any suit is filed under Res Judicata then the same subject-matter cannot filed as a new suit, in other form of law or any other court of law. If by mistake any case is filed in any other court of law which is already filed under Res Judicata then the judge can dismiss that petition directly without any further proceeding. 

• Interpleader suit in CPC

Interpleader suit in C.P.C is defined in section 88 with order no XXXV. An interpleader suit means if any person claims any property of her husband or her parents and in case the owner of the property is dead without transferring the property, then the second owner has to claim the property from the bank or authority. After claiming for such property the bank or the authority has to file an interpleader suit in the court. Then the court will decide who will be the main owner of the property. In an interpleader suit, there were many defendants to claim the property. Plaintiff gets the monetary value for filing the suit in the court on behalf of the defendant. He is not liable for any damage.    

• The Reinstitution of interpleader suit.

Where interpleader suit may be reinstituted and Power to state case for the opinion of the Court is defined under Section 88 and 90 of the Code of Civil Procedure 1908. When defendants blame each other for the claim of the same property, debt or sum of money from the plaintiff who is not in the direct possession of the property or debt and also he doesn’t claim interest and ready to deliver the property and he is ready to give the property to the claimant. The suit which is filed related to Res Judicata cannot be instituted in another court.   

• The Object of filing interpleader suit.

The suit is filed when the object is to be claimed by the defendants. The claim of the suit gets adjudicated. The suit is filed when any person in any condition cause death and has left some of the property without transferring to other members of the family then that other family member has to claim the property or money from the bank and then the bank has to become claimant to file a suit in the court to decide whomever the property has to be transferred. This type of suit filed in the Res Judicata court. 

Interpleader suit and its condition

• Conditions of Interpleader suit

1. Debt, money, property either movable or immovable in the dispute.
2. Two defendants are there in the suit.
3. Both defendants can claim each other for the property or money.
4. The person who has to pay the debt to the defendant is not valid for any interest. 
5. The Claimant is willing to pay the debt, or some amount of money, or property to the defendant. 
6. Suits are not pending in this.
7. This suit cannot be filed twice if the judgment is given in Res judicata. 

• Test of applicability 

The test of applicability is done during the suit when the pleading is going on. This test is done by a court of law, after this test they decide about the next owner of the property or money. This test is very important for the interpleader suit. Because in an interpleader suit one or more defendants are there. In a test of applicability, some questions are asked from the defendant during the pleading. 

• Plaint in an interpleader suit

The Plaintiff is the person who only filed a suit in the court on behalf of defendants for the claim of property which is claimed by the different defendants. The Plaintiff has no direct possession of the property. He has an indirect possession of the property. But in this type of suit, the only plaint can file a suit. The defendant is not allowed to file a suit. 

Difference between 

Plaint in an interpleader suit

The plaintiff who sues the defendant cannot claim any interest in the subject matter in dispute in extra. They get charges or costs for the interpleader suit. There were many defendants in the interpleader suit to claim the debt or property. There is no collusion between the plaintiff and defendant. Only collusion between defendants. Where the plaintiff is capable of paid or is capable to place in the custody of the court the plaintiff has to pay or place it before he is entitled to any order in the suit. When the defendant sues the plaintiff in an interpleader suit in the same subject-matter in which the suit is already pending which is filed by the plaintiff. The proceeding will continue but against the plaintiff. 

How to file an interpleader suit?

1.  The suit can only be filed by the plaintiff and the plaintiff can be a bank in any subject-matter of interpleader suit. No landlord can sue to his tenant or no family member can sue the defendant.
2. All the things are kept in the custody of the court
3. There were many defendants in the interpleader suit
4. An Interpleader suit is filed in the subject-matter of debt, money, property, movable or immovable property. 
5. The plaintiff from whom the property is claimed, must not claim other charges or cost who is ready to pay or deliver it to the rightful claimant. 

• First hearing 

In the first hearing court involved in the proceedings to know the contention of the parties. In an interpleader suit plaintiff only is allowed to file a suit against the defendant when the defendant claims the debtor property from the plaintiff. Plaintiff is not in the direct possession of the property. He filed the suit on behalf of the defendant. After the suit is filed the plaintiff gets free from all liability of the suit. He gets the substantive relief. The plaintiff pays the court for the suit which is filed in the court. That amount never comes into dispute. After paying the court plaintiff gets free from all liability. Where the decision is given in favor of both parties then the opening of the packet becomes more important for the interest of both parties.     

• Non-appearance of claimant

In any case, any party fails to come on the date of proceeding even his statement gets recorded already then also proceeding to get adjourned. He will be dismissed from the suit. And also his amount gets deducted. The plaintiff can raise an issue in case one of the parties fails to give the payment. 

• Sub Rule 3

 Once suit proceeding has started with the provisions of rule 10 and rule 17 then the court can allow the amendment of the plaintiff by the inclusion of any property in the subject-matter of the suit and by adding certain parties in the suit as a defendant. According to rule 10 of orders, 1 says that if the suit is filed in the name of the wrong plaintiff and if the court doubted about the wrong plaintiff. The court can consider the mistake as a bonafide mistake in any stage of the trial. The court can add new parties in the suit as a plaintiff or defendant. 

• Procedure where the defendant is suing the plaintiff 

When the defendant sues the plaintiff in the same subject-matter, even the previous suit is pending the other suit will be filed in the court and suit is against the plaintiff in the previous suit also. Cost may be the same as for the plaintiff which he has to pay to the court.

Who cannot file an interpleader suit?

Defendants cannot file the interpleader suit because defendants are the claimant who claims the property or debt from the plaintiff. The plaintiff is only allowed to file a suit in the court. And the plaintiff only pays the cost of the suit in the court. But defendants only litigate in court in the subject-matter. Defendants are free from all liability after filing the suit in the court. 

• Interpleader suit by agents 

An Agent cannot file an interpleader suit against his owner or the party. He cannot even claim anything from the tenant and landlord. 

Case law:

1. Smt. Mohan Devi V. SH. Gokal Chand And Anr

 Facts of the case:

The tenant filed a case against the landlord in court under an interpleader suit for threatening them to pay the rent of the house. But according to the tenant, he is paying the rent according to the date and time. Defendant 1 claimed that he lowers the rent as the rent is 250/- per month but he lowers the rent to 200/- per month. But after the relevant fact, it has been noticed that defendants tried to threaten the tenant to pay the rent. When the written statement is given by the defendant he admitted that tenant is paying 250/- per month. But according to order 33, rule 5 of CPC the suit is not maintainable. The RC and E officer observed that the tenant did not give any evidence related to his shop and it is clearly mentioned in the evidence that the tenant is not the owner of the shop and had let it out to one Alladia. He accordingly declared that the shop was vacant.

• Interpleader suit by Railway Company

Railway company can file a suit against agent and third party under order 35 of rule 5.   

Case law:

1. Chhaganlal Himatlal vs. the Bombay, Baroda and Central India Railway

Facts of the case:

The railway company has filed a suit in the interpleader suit against the agent and third party claiming consignor that the company is not an agent of the consignor. According to the provisions of the railway act, the company is in direct contract with the consignor for the carriage of goods. So the railway company has claimed that the company is not an agent of the consignor but they are in contract with the consignor for the carriage of goods. The court gives the decision that in virtue of Order XXXV, Rule 5 of the Civil Procedure Code, railway company is not competent to constitute an interpleader suit as it was an agent of the consignors.  

• Interpleader suit by tenants 

No agents can sue their principles and no tenants can sue their landlords in the interpleader suit for compelling him to interplead with other person makes a claim related to the tenants through the landlord. If the other person is claiming the property with the old landlord who has no direct possession of the property and tried to ask for the rent with the tenant. Then tenant can file an interpleader suit. 

Case law

Neeraj Sharma vs. The District Sangpur Gram  

Facts of the case:

Shanti Devi who died in the year 1922 is the owner of the premises. After the death of the owner of the premises the petitioner, Neeraj Sharma claimed that he is the owner of the premises. The respondent takes the premises in dispute from Smt. Shanti Devi who is already dead. Then the petitioner filed a petition for the application for ejectment of the respondent society on the ground of non-payment of rent. After that, the petitioner filed a second petition based on the same ground. In judgment, the provisions of Order 35 Rule 5 of C.P.C are not applicable to the case because the plaintiff does not pointed out to anyone defendant to be his landlord.

• Charge for plaintiff cost 

Where the thing claimed is capable of being paid into court or placed in the custody of the court, the plaintiff may be required to pay or place it before he can be entitled to any order in the suit. 

 Interpleader suitcases

 Rajan Sharma And Others vs Labh Singh And Others 6th may 2011

Facts of the case

The court finds no merit in the appeals. According to Order 35, Rule 5 of the Code of Civil Procedure, which prohibits the tenant to file a suit against his landlord for the purpose of compelling him to interplead  with any person other than making claim through such landlord. 

Car and Universal Finance Company Limited v. Caldwell

Facts of the cases:

The respondent is the owner of the Jaguar car. The third person has forced Mr. Caldwell to sell the car for a cheque amount of 965 dollars and a deposit of 10 dollars. Respondent agrees to sell the car and he sold the car and got the cheque and when he tried to convert the cheque into cash. The cheques got dishonoured. The respondent goes to the police about the whole incident and also informed this incident to the Automobile Association. The respondent told that Mr. Norris has sold the car to different dealers. The judgment is given by the high court. The court said that the contract was validly rescinded. It was so without communication, but through an unequivocal act of election, demonstrating Caldwell no longer wishes to be bound.

•  N.M.N. Duraiswami Chettiar v. Dindigul Urban Co-operative Bank Ltd

Facts of the case

The first has deposited the money of Rs 2000 in the bank in his savings account. After that, he fulfilled the form of the bank to recover the amount of money he deposited in the bank in his savings account. But his brother the second defendant has given notice to the bank that the money should not be recovered of the 1st defendant because that money is the share of the family members also. Then the suit has been filed by the bank against the defendant’s related to the debt. The council dismissed the petition saying that Interpleader Suit is not maintainable and the second ground for dismissal of petition is in regard to this deposit the relationship between the bank and the first defendant was that of principal and agent.

• Satyanarain v. District Judge, Tonk & Ors

Facts of the case

The petitioner has filed a suit against the respondent. But the case gets dismissed by the civil judge. Then the third petitioner has filed a case against petitioner to recover the rent along with the profit He filed an interpleader suit. In the judgment of this case the judge dismissed the application of the petitioner under Order 35 Rule 5 of CPC. 

• Neeraj Sharma vs The District Sangpur Khadi Gram

Facts of the case

The respondent has filed a suit against the petitioner than again petitioner has filed an interpleader suit against the respondent. Shanti Devi who died in the year 1922 is the owner of the premises. After the death of the owner of the premises the petitioner, Neeraj Sharma claimed that he is the owner of the premises. The respondent takes the premises in dispute from Smt. Shanti Devi who is already dead. Then the petitioner filed a petition for the application for ejectment of the respondent society on the ground of non-payment of rent. After that, the petitioner filed a second petition based on the same ground. The Provisions of Order 35 Rule 5 C.P.C is not applicable in the case.

• Ashok Leyland v. State of Tamil Nadu

Facts of the case:

This is related to tax. The petitioner has the factory in which he manufactures the vehicles in the state of Maharashtra and the state of Rajasthan. The petitioner claimed that he has regional offices where his vehicles all governmental works are done related to tax and many more. The tax law came into question. The judgment held that:

1. Section 6A does not create conclusive presumption as contended on behalf of the assessee.
2. The order of assessing authority is accepting form F and passed during the assessment at any point.
3. Its amenability to the power of reopening and revision depends upon the provisions of the concerned sales tax enactments by virtue of the operation of section 9(2) of the Central Act.
4.  It is not possible to accept that an order under Section 6A(2) has an independent existence.
5. An order refusing to accept Form F may or may not be applicable independently depending upon the provisions of the sales tax enactments, but it is certainly capable of being questioned if an appeal is preferred against the order of assessment.
6. If orders accepting Form F are sought to be reopened, it can be done as part of the reopening of assessment or may be done independently, which would depend upon the language of the relevant provisions of the concerned State Acts.

 Interpleader suit format 

In the court of Civil Judge at Delhi 

                                                   Suit no. …………../19 …………

1. Rajan Sharma 

New Delhi, Janakpuri                                                                …………………….. Plaintiff 

2. Labh Singh

     New Delhi, Saket                                                               …………………. Respondent 

3. Labh Singh

     New Delhi,                                                                      ……………………..Respondent

                                                  Plaint under Order 35 Rule 1 

The plaintiff respectfully states as follows;

 (Matter of Rent Restriction)

1. Petitioner is the tenant of the shop 
2. Respondents 1 and 2 are the owner of the shop

  (Facts constituting a cause of action)

3. Respondent 1 and 2 have submitted that the interpleader suit filed by the petitioner is not maintainable.  
4. Filed a petition for ejectment on the ground of personal necessity.
5. Petitioner agreed to deposit the rent to the court. 
6. The respondent no 1 and 2 have accepted this demand of petitioner of giving rent to the court. 

   According to Order 35, rule 5

7. The tenant has the right to file a suit against all the owners of the shop.
8.   The respondent’s suit is maintainable and has action. 
9.   Counsel for the petitioner is not applicable. 
10.   The suit is against the owner of the shop.
11.   The tenant cannot file a suit against the landlord. 

                                                         Jurisdiction

Tenant is not applicable to the suit.

The tenant cannot file a suit against landlord according to rule 35

The relief claimed: the plaintiff prays that

No relief claimed because this case gets dismissed because the tenant cannot file a suit against the landlord.

  Place: ………………………..                                                         Signature of the plaintiff 

Plaintiff                                                                                                             Advocate for

                                                            Verification 

I,………….., verify that content from 1 to the last para is valid and correct according to my knowledge and belief and is concealed there. 

Signature 

Plaintiff 

Interpleader suit in the USA 

The plaintiff has to deny his claim to the res for the avail of interpleader remedy. But this rule is removed from the jurisdiction of interpleader suit. If claimant claims for the property of his member who already died to the beneficiary. But if the beneficiary proves that the owner dead is a suicide than the claim of the claimant denies. The claimant has to prove in the court that the owner of the property dies with the accident, not died as suicide.  According to the U.S.A jurisdiction, there are two types of interpleader actions. 

Interpleader governed by 28 U.S.C. and 1335 which allows an individual with a stake which is, or maybe, claimed by two or more adverse claimants, to interplead those claimants and bring them into a singular action. Title 28 (Judiciary and Judicial Procedure) is the portion of the United States Code (federal statutory law) that governs the federal judicial system and U.S. Code 1335 provides for interpleader suit according to which The district courts shall have original jurisdiction of any civil action of interpleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of $500 or more, or having issued a note, bond, certificate, policy of insurance, or other instrument of value or amount of $500 or more, or providing for the delivery or payment or the loan of money or property of such amount or value, or being under any obligation written or unwritten to the amount of $500 or more.

Section 88 of the order no 35 of the C.P.C under Indian law specify that quantum of the property against the title of the interpleader suit. 

While according to the U.S law 1335 provides the money or value of the property is having a note, bond, certificate, policy of insurance. 

In the Indian Law, there were no types of interpleader suit but in the U.S law, there were types of interpleader suit. 

Conclusion

At last, I would conclude my topic by saying that interpleader suit means the suit which was filed by the plaintiff on behalf of defendants because the actual owner of the property or debt dies and plaintiff who is in the indirect possession of the property can file a suit on behalf of defendants, who claim for the ownership of the property. Because this has one more than the defendant. There is a collusion between defendants. Defendants only litigate in court in front of judges. Plaintiff has no direct possession of the property he is only there to sue in court to decide who will be the actual owner of the property or debt. He is liable for the amount of money for the suit filed. An interpleader suit is defined in the Civil Procedure Court. Interpleader suit can only be file under Res Judicata. This suit cannot be reviewed in any other court of law. This suit once reviewed in the court of law then it cannot be reviewed twice.  

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