This article is written by Rahul Kulkarni, pursuing a Certificate Course In Companies Act from Lawsikho.com. Here he discusses “Are Foreign Companies required to register with the Registrar of Companies?”.

Definition of a Foreign Company

As per the definition provided under section 2(42) of the Companies Act 2013, a ‘foreign company’ means any company or body corporate incorporated outside India which, –

1. Has a place of business in India

• Whether by itself
• Or through an agent,
• Physically
• Or through electronic mode

And,

2. Conducts any business activity in India in any other manner

Need for Foreign Companies in India

The need is clearly observable and demonstrated by way of the Foreign Direct Investment (FDI) which India, as a host country, has been so welcoming of, over the past many years.

This has helped the country in getting access to new technologies, has generated numerous employment opportunities to the Indian public and has also helped foster a competitive culture, which helps the domestic companies.

The Indian Government has done its best to simply the various procedures, has introduced the SPICe form for incorporation etc. among many others

India, in 2019, has ranked 63rd among 190 nations in the Ease of Doing Business Index as per the World Bank. This is a good sign of improvement as it has moved 14 places from its previous ranking in 2018.

Ways of Establishing a Foreign Company in India and whether Registration required:

1. Joint Venture of Foreign Enterprises with Indian Companies

It has to obtain the approvals from the appropriate authorities, such as RBI and the registration process will vary based on the business structure it so chooses.

2. Limited Liability Partner (LLP) 

This is a new kind of business structure integrating the benefits of incorporation along with the benefits of a partnership. An LLP has to be mandatorily registered with the ROC

Chapter III of the LLP Act 2008 provides for the Incorporation of LLP and matters incidental thereto

S.12 provides for the Incorporation by Registration where the Registrar shall retain the Incorporation documents, containing the particulars as per s.11(2) of this Act and within a period of 14 days

  -the incorporation document shall be registered

 -a certificate shall be given that the LLP is incorporated by the name specified therein

Chapter XI of the LLP Rules 2009 deals with the foreign LLP where it is provided in Rule 34 that:

A Foreign LLP shall within 30 days of establishing a place of business in India file with the Registrar in Form 27 along with documents such as

• A  copy of the certificate of incorporation or registration and other instrument(s) defining the constitution of LLP
• Full address of registered or principal office of LLP in the country of its incorporation
• Full address of office of LLP in India in which it is to be deemed as its principal place of business
• List of partners and designated partners, if any, and the names, addresses of 2 or more Indian residents, authorized to accept service of process and any notices or other documents on behalf of the Company.

3. Wholly Owned Subsidiary

When 100% FDI is permitted under the FDI Policy, no prior approval of the RBI is required. Therefore, a private limited company (as a subsidiary of a foreign company) may be incorporated by way of registration with the ROC and the shares will be held by the foreigners.  It must have a minimum of 2 directors and 2 shareholders. At least one director has to be a Resident of India and its citizen.

Chapter XXII of the Companies Act 2013 contains provisions for Companies Incorporated Outside Of India

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• S.380 – Documents to be delivered to the Registrar within 30 days of the establishment of place of business in India

1. A certified copy of the charter, statutes or memorandum and articles or other instrument defining the constitution of the Company. If not in English, a certified translation will be given
2. Full address of the registered or principal office.
3. List of directors and secretary of the Company.
4. Names and addresses of one or more Indian residents authorized to accept service of process, any notices or other documents served on the Company.
5. Full address of company office in India deemed to be its principal place of business in India
6. Particulars of opening and closing of a place of business in India on an earlier occasion(s) 
7. Declarations that none of the directors or authorized representative in India has ever been convicted or debarred from the formation of companies and management in India or abroad
8. Any other information as may be prescribed

This has to be read with The Companies (Registration Of Foreign Companies) Rules 2014.

• s.385 provides for the fees to be paid to the Registrar for registering any document required by this Chapter to be registered by such fee as may be prescribed  which shall be as provided in the Companies(Registration Offices and Fees) 2014 

4. Branch Office (BO) 

A Branch Office – in relation to a company, means any establishment which has been described as such by the company.

It is set up by a foreign company to carry out its branch activities in India.

The permissible activities of a BO are stated in Schedule I to the Foreign Exchange Management (Establishment in India of a Branch Office or a Liaison Office or a Project Office or any other place of business) Regulations, 2016

The foreign company will have to seek approval of Reserve Bank Of India before establishing BO. RBI will take the criterion of –

1. Profit making a record in the immediately preceding 5 financial years in its home country
2. Net worth to be not less than USD 100,000 or its equivalent.

After being registered with RBI, the BO ought to get itself registered with the Ministry of Corporate Affairs (MCA) if it so wishes to be registered as an establishment of a foreign company in India. The documents which shall be filed with the ROC are as follows

• • Form 44
  • Charter, statutes, MoA, AoA or other instrument defining the company’s constitution
  • Details of Directors – Individuals and Body Corporates
  • RBI approval letter
  • Details of Secretaries
  • Power of Attorney or Board Resolution in favour of the authorized representative(s)

5. Liaison Office (LO) 

A Liaison Office is a place of business that acts as a channel of communication between the Head Office and entities in India but which doesn’t undertake any commercial or trading or industrial activity, whether directly or indirectly, and it maintains itself out of inward remittances received from abroad through normal banking channel

The permissible activities of a LO are stated in Schedule II to the Foreign Exchange Management (Establishment in India of a Branch Office or a Liaison Office or a Project Office or any other place of business) Regulations, 2016.

RBI’s Criterion for approval of LO — 

• A profit making track record of the immediately preceding 3 financial years in its home country and
• Net worth to be not less than USD 50,000 or its equivalent

Once the conditions for the establishment of LO are met i.e after approval from RBI, then within 30 days of establishment, the LO must register itself with the Registrar and provide the following documents:

• A notarized and apostilled copy of the LO charter or MoA and AoA in English;
• Full address of the principal place of operation outside India
• Name, address of LO in India
• List of Directors
• Name, address of the company’s official representative based in India
• RBI’s approval letter

6. Project Office(PO) 

A ‘Project Office’ means a place of business in India which is established to represent the interests of the foreign company in order to execute a project in India and this excludes a Liaison Office.

RBI’s criterion for approval of PO:

• The project has to be funded directly by inward remittance from abroad, or
• The project is to be funded by a bilateral or a multilateral international financing agency
• Clearance from an appropriate authority has to be obtained
• For the project, an Indian company or entity awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India

After approval from RBI, within 30 days of the establishment of PO, these documents need to be submitted to the ROC for Registration:

• RBI’s permission
• Notarized or consularised copy of the certificate of Incorporation, MoA, AoA of Foreign Company. 
• Notarized or consularized copy of Power of Attorney in favour of an Indian Resident, authorizing himself to accept service of process and any notices or other documents on behalf of the Company.
• List of directors of the Company, notarized or consularized, containing all their particulars.
• KYC of Shareholders holding more than 10% equity in Applicant Company
• Notarized or consularized copy of extracts of Foreign Company’s Board Resolution

Conclusion

Thus, the different ways that a foreign company may establish its place of business in India has been listed. A brief overview of the registration requirements and other compliances that have to be met has also been provided.

References

1. 1. Limited Liability Partnership Act 2008 and Limited Liability Partnership Rules 2009
   2. Companies Act 2013
   3. Foreign Exchange Management (Establishment in India of a Branch Office or a Liaison Office or a Project Office or any other place of business) Regulations, 2016.
   4. https://www.mondaq.com/india/CorporateCommercial-Law/369096/Establishment-Of-Branch-Office-In-India
   5. https://www.mondaq.com/india/CorporateCommercial-Law/878498/Opening-Of-Liaison-Offices-In-India
   6. https://www.businesspivot.in/project-office

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 Rahul Kulkarni, pursuing a Certificate Course In Companies Act from Lawsikho.com. Here he discusses “Who are Debenture Trustees and how are they appointed?”.

Introduction

Before going into who a Debenture Trustee is, the term will be broken down into two parts and examine the key concepts separately and then see them as a whole.

A debenture is basically a debt instrument issued by a company, known as the issuer company, and those who subscribe to such debentures are known as the debenture holders.

A debenture is a clear acknowledgement of a debt i.e a loan advanced by the debenture holder to the company and so it forms a part of the capital structure i.e as a debt capital of the company. Such debenture holders are repaid along with a fixed interest.

A Debenture is usually medium term to long term.

Debentures are of many types. They can be secured or unsecured. This means that a Debenture is secured by the creation of charge on the asset/s of the issuer company which serves as a collateral or security and a debenture is unsecured when this isn’t the case. 

Now, a Trust is created by an author of the trust whereby the trust property/trust money is transferred to a trustee, who will act in the interests of the beneficiary, for whose benefit the trust is created. If there is any breach in the trustee’s duties as imposed by the law for the time being in force, it will be regarded as a breach of trust.

Therefore a Trustee must not go against the trust agreement entered into or against the law for the time being in force.

Reason for the appointment of a Debenture Trustee

A Debenture Trustee is appointed by the issuer company and is given the task to protect the interests of the debenture holders and he will also serve as a mediate factor between the issuer company and the debenture holder. 

Typically, the issuer company will mortgage its property in the name of the Debenture Trustee and he shall solely exercise his powers as a trustee over it. This means that the Debenture Holders can’t use such mortgaged property and they can benefit from it when the Debenture Trustee sells such property in order to redeem their debentures.

”The concept of debenture trustees was evolved due to the difficulties being faced by an issuer company while dealing with each debenture holder separately for obtaining their consent on various matters and carrying out compliances when the debentures were issued to multiple debenture holders. In order to overcome this practical difficulty, the need for a single point of contact was felt, which would deal with the issuer company and perform its duties on behalf of numerous debenture holders as per the directions given by the debenture holders in terms of the provisions of the debenture trust deed.”

Legislation

In India, SEBI regulates the Debenture Trustees by way of the SEBI (Debenture Trustees) Regulations 1993. 

A broad overview of the Regulations is given below:

Chapter I – Preliminary

Chapter II – Registration of Debenture Trustees

Chapter III – Responsibilities and Obligations of Debenture Trustees

Chapter IV – Inspection and Disciplinary Proceedings

Chapter V – Procedure for action in case of default.

Schedule I – 

It contains

Form A – Application for grant of certificate of initial/permanent registration as Debenture Trustee

Form B – Certificate of initial/permanent registration

Schedule II – Fees

Schedule III – Code of conduct

Schedule IV – Contents of Trust Deed

How a Debenture Trustee is Appointed and other Connected Regulations

The appointment of a Debenture Trustee, with reference to the Regulations, may be sketched as follows:

1. Who can apply?

Regulation 7 provides for persons eligible for being appointed a Debenture Trustee

• A scheduled bank carrying on commercial activity
• A public financial institution
• An insurance company
• A body corporate

2. Application for certificate

As u/s.3 of the regulations, an application shall be made to the Board of the Company in Form A for grant of certificate. For such an application, the applicant shall be required to pay a non-refundable application fee of Rs.50,000/- by demand draft in favour of SEBI which will be payable at Mumbai.

3. Certificate of Registration

Such certificate may be:

A certificate of initial registration – Regulation 8

A certificate of permanent registration – Regulation 8A

Regulation 12 mandates that fees for such registration shall be paid as specified in            Schedule II. Failure to do so will result in the suspension of the certification unless the Board permits on sufficient cause shown.

The fees payable for such registration shall be

For Initial Registration – Rs.20,00,000/- for a tenure of 5 years

For Permanent Registration – Rs.9,00,000/- after the completion of the above initial period.

4. Registration Conditions

Regulation 9A provides for the conditions of the registration (whether initial or permanent), such as 

• Prior approval of the board when a change in control is proposed
• Fees to be paid in the manner provided in the regulations
• Adequate steps for grievance redressal of investors within 1 month of receipt of the complaint and also to keep Board informed about the details of the same.
• To maintain capital adequacy requirements specified in regulation 7A at all times during the period of registration, whether initial or permanent.
• To abide by the regulations under the Act

5. Board Considerations

Regulation 6- The Board shall consider the application on points, given briefly below:

• Whether the applicant has the necessary infrastructure
• Past experience or in his employment, minimum of 2 experienced persons
• Or any person, directly or indirectly connected with the application, not been granted registration
• Has in his employment at least one person possessing a professional qualification in law from a government recognized institution.
• Whether convicted of any offence involving moral turpitude
• Or guilty of any economic offence
• Fit and proper person (Regulation 6A provides that the criteria are in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.
• Fulfils capital adequacy requirements as specified in Regulation 7A

6. The Trust Deed

A trust deed has to be compulsorily entered into.

Regulation 2 (ia) explains that a trust deed is a deed executed by the body corporate in favour of the trustees named therein for the benefit of the debenture holders.

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Regulation 13(a)(i) clearly provides that the debenture trustee shall act as such when he has agreed to do so under the trust deed in order to secure the issue of debentures for the body corporate. He will agree to do so in the written agreement before the opening of the subscription list for the issue of debentures.

The contents of the Trust Deed are provided for under Schedule IV of the Regulations.

A brief overview of the same is given below:

• A preamble which shall state the rights of the Debenture Holders and how these rights came to be vested
• Description of the instruments – details such as the purpose, amount, tenure, interest and so on.
• The details of the charged securities which may be existing or future.
• A section providing for the events of default i.e when action can be taken by the Debenture Trustees and the steps to be taken in such events.
• Rights of Debenture Trustees

-To inspect the registers 

-And to make copies and extracts thereof;

-Right to appoint a nominee director

• Obligations of a body corporate which means the duties that the Company owes towards the Debenture Holders and the Debenture Trustees
• Miscellaneous

7. Obligations

It is mandated by Regulation 14 that the Debenture Trustee shall accept the trust deeds containing the matters specified in Schedule IV to the regulations. Similarly, a Debenture Trustee is also bound by the duties under Regulation and also the specified code of conduct laid down in Schedule III. There are also regulations specifying certain duties such as:

• Regulation 17 Maintenance of books of accounts
• Regulation 17A Appointment of compliance officers
• Regulation 18 Information to the Board
• Regulation 21 Obligations of Debenture Trustee on inspection by the Board

He shall also comply with Rule 18 (3) and Rule 18(4) of the Companies (Share Capital And Debentures) Rules, 2014 (inapplicable to public offer of debentures)

8. Whether such appointment is compulsory

The appointment of a Debenture Trustee has been made compulsory as per s.71(5) of the Companies Act 2013 and the conditions of appointment (inapplicable to public offer of debentures) laid down in Rule 18(2) of the Companies (Share Capital and Debenture Rules) 2014 will have to be complied with

Such an appointment will not be compulsory for debentures with a maturity period of 18 months or less.

Conclusion

The importance of the appointment of a Debenture Trustee and his role could be seen in the erstwhile Companies Act of 1956 as well.

This appointment of the Debenture Trustee by the issuer company has to be done carefully, after all the appropriate considerations and with no lapse in the procedure, and also mainly because as this role serves as a continual source of assurance to the Debenture Holders. It instils in them a sense of confidence and trust over the issuer company.

Endnotes

1. https://www.mondaq.com/india/CorporateCommercial-Law/726516/Debentures-Is-Appointment-Of-A-Debenture-Trustee-Mandatory

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 Rahul Kulkarni, pursuing a Certificate Course In Companies Act from Lawsikho.com. Here he discusses “Can Shares be issued at a Discount? When?”.

Share – Meaning

Essentially, a share represents a particular level of ownership of a shareholder in the company. Such shareholder has a claim on the profits made by the Company and the income so received is known as ‘dividend’.

It is a security that signifies an investment and ownership in the Company.

Definition

Section 2(84) of the Companies Act 2013 defines share as “-a share in the share capital of a company including stocks.”

Why a Company issues shares?

A Company issues shares out of its share capital as authorized to do so, depending on the type of company it is and as per its incorporation documents i.e Memorandum of Association and Articles of Association.

It does so for the simple reason that a Company needs to grow in its business and for this, it must be willing to raise money. In order to do so, it will issue a prospectus to invite those willing to take an interest in its business and they will be known as potential investors. After the prospectus is issued, applications are received and then the shares are allotted.

This remains as one of the most efficient ways of raising capital by increasing ownership stakes thereby creating numerous interests in the business of the company which will help it thrive.

The 2 kinds of Share Capital

As per s.43 of the Companies Act 2013, the two kinds of share capital are

1. Equity Share Capital

• with reference to company limited by shares, it is defined as all capital which isn’t preference share capital
• equity shareholders may carry either voting rights or differential rights
• equity shares may be

1. 1. Rights issue 
   2. Bonus shares
   3. Sweat equity shares

2. Preference Share Capital

• with reference to company limited by shares, it is defined as that part of the issued share capital which carries or would carry preferential rights with respect to matters like payment of dividend, repayment in case of winding up and so on.
• preference shares may be –

1. Cumulative or non cumulative
2. Redeemable or non redeemable
3. Participating or non participating
4. Convertible or non convertible

Types of Issue of Shares

The ways of issue of shares can be

1. Issue of shares for consideration other than cash

• to promoters for their services during incorporation
• for purchase of fixed assets
• for payment to creditors

2. Issue of shares for cash

• in one or more installments

Furthermore, issue of shares can be

1. Issue of shares on par – at their face value
2. Issue of shares at premium 

• at price higher than face value
• usually done by companies with good stock fundamentals
• capital gain to the company
• s.52 of Companies Act 2013 allows Company for issue of shares at a premium

3. Issue of shares at discount 

• at price lesser than face value
• typically a loss to the company

When the issue of shares at discount is prohibited?

S.53 of the Act

It clearly prohibits the issue of shares at discount as it states in its clause (2) that any share (which means either equity share or preference share) issued by a company at a discounted price shall be void.

It also provides in its clause (3) for penalty, to a company or officer in default, an amount equal to the amount raised through such issue of shares at discount or five lakh rupees, whichever is less. The company shall also be liable to refund all monies received with interest at 12% p.a from date of issue of such shares to the persons to whom such shares have been issued.

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It is interesting to note that unlike the new Companies Act, the erstwhile Companies Act of 1956 provided in its section 79 for the power of a Company to issue shares at discounts after prior approval of the Company Law Board was obtained.

Under the new Act, S. 53(1) provides that there is an exception to this section and this exception has been provided for in s.54 of the Act which has been discussed below

When issue of shares at discount is not prohibited?

1. Sweat equity shares

It is defined in s.2(88) of the Act.

• These are issued by a Company to its Directors or Employees
• They can be issued at a discount or for consideration other than cash
• Sweat equity shares are issued as a reward or an acknowledgement of the efforts and contributions of the directors and employees in providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.

Sweat Equity Shares are fundamentally different from Employee Stock Option Plans (ESOPs) in the sense that sweat equity shares serve as both a reward and incentivization mechanism for the performances and contributions whereas ESOPs serve as purely an incentivization mechanism in order to encourage the employees to perform better due to their ownership element in the Company.

S.54 of the Act provides for the conditions for the issue of sweat equity shares:

2. Issue of shares to creditors

S.53(2A) of the Act provides that the Company may issue such shares to its creditors when its debt is converted into shares –

• In pursuance of any statutory resolution plan (as under Insolvency and Bankruptcy Code 2016)
• Or debt restructuring scheme, in accordance with any guidelines or directions or regulations as specified by the Reserve Bank of India Act 1934 or the Banking (Regulation) Act, 1949.

This has been a recent provision brought about by the Companies Amendment Act 2017.

“The amendment would provide a flexibility to creditors to convert their debt into shares issued at a discount which was earlier prohibited. This amendment would address the concern that when a company goes into insolvency its equity value is eroded and it is not a viable proposition to convert loan into shares at face value,” said Anshul Jain, partner, Luthra & Luthra Law Offices. 

The other few possibilities of when a Company may issue shares at discount are:

3. Rights issue at discount

A company may have to raise additional capital for its growth or preservation or whatever the reason might be. It is allowed for such further issue of share capital as u/s. 62 of the Companies Act 2013

In the rights issue, the company may choose to issue shares to its existing shareholders instead of resorting to issue of shares to the public. Such shares are issued at a discount given in the market price. It also helps to increase the stake of the existing shareholders.

“The basic idea is to raise fresh capital. A rights issue is not a common practise that a corporate organisation resorts to. Ideally, such an issue occurs when a company needs funds for corporate expansion or a large takeover. At the same time, however, companies also use rights issue to prevent themselves from being conked out. 

Since a rights issue results in higher equity base for the organisation, it also provides it with better leveraging opportunities. The company becomes more comfortable when it comes to raising debt in the future as its debt-to-equity ratio reduces.”

Such a spectacle was seen in the beginning of 2019 when Vodafone Idea resorted to a rights issue at a deep discount in order to combat the competition of Airtel’s rights issue and also against Reliance Jio.

This rights issue of Rs.25,000 crores was seen to be the largest ever by any company in the country, being priced at Rs.12.50 a share.

This issue was oversubscribed nearly by 1.08 times 

4. Initial Public Offering (IPO)

An IPO is the first issue price of an unlisted company’s share capital, which thereby then becomes a listed company.

An issuer company can allot the shares to its employees or to its retail individual investors at a discount of maximum 10 percent6

AN IPO maybe eventually followed by a Follow on Public Offer (FPO) which means the issue of shares by the now listed company to the investors or existing shareholders. Here, discount may be given again to the retail investors in the permissible limit.

5. Offer for Sale (OFS)

An OFS is when shares are sold by listed companies (acting as sellers) in a transparent manner in order to dilute the promoter stakes or holdings, done so in compliance of the minimum public shareholding norms as per SEBI.

An investor can apply for the OFS as a retail investor if he fulfills certain conditions.

The SEBI OFS guidelines provide that the sellers can offer discounts to retail investors.

In an OFS issue of shares, the sellers will have to mention the details of such discount being offered in the OFS announcement notice.  The discount is usually given either on the bid price or on the final allotment price.

Conclusion

The many ways of issuing shares at discount have thus been listed. It is important to make sure that there is no violation of S.53 of the Act which has been brought about by a recent amendment as it can be seen that it provides for strict punishment for the contravention of its provisions.

Endnotes

1. http://download.nos.org/srsec320newE/320EL23.pdf
2. https://economictimes.indiatimes.com/news/economy/policy/companies-amendment-bill-passed-creditors-of-insolvent-cos-can-get-shares-at-discount/articleshow/62185966.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
3. https://economictimes.indiatimes.com/money-you/whats-a-rights-issue/articleshow/3803131.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
4. https://www.livemint.com/companies/news/vodafone-idea-s-25-000-crore-rights-issue-oversubscribed-nearly-1-08-times-1557053325590.html.
5. https://economictimes.indiatimes.com/markets/stocks/news/voda-idea-rights-issue-subscribed-1-07-times-at-close-bankers/articleshow/69036035.cms?from=mdr
6. https://shodhganga.inflibnet.ac.in/bitstream/10603/28023/1/chapter1.pdf
7. https://www.bseindia.com/downloads1/RI_FAQ.pdf

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

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This article has been written by Rutuparna Sahu from KIIT School of Law, Odisha. This article enlightens us about the need for an Artist Agreement. 

Introduction 

Artist agreement or contract is just like any other contract including two or more parties coming together to comply with a legally binding agreement.

Every event or exhibition of any variety of art taking place, even if a temporary one, requires a legal binding agreement or contract to which the parties should comply with for smooth conduct of the event. The parties to an artist agreement are generally the performing artist or the owner of the artwork and a borrowing institution i.e. those who hire artists for various projects, or it can also take place between any event organizer and the host of the venue where the event is to take place. 

Things to remember while making an Artist Agreement 

• The contract should be a written one because a written contract gives you more certainty for proof as compared to a verbal one and should be clear enough to be understood by everyone. 
• As mentioned already, a contract is basically made to stipulate the respective duties and obligations of the parties to the particular contract. A formal agreement works as a manual to the parties which helps and instructs them about their responsibilities in the context of the contract. 
• This agreement is somewhat like a partnership and having a legal contract for the same will be beneficial in avoiding disputes between the parties. 
• For every contract, you should hire a lawyer who will be well versed with the legalities of the contract and would suggest you better in any matter relating to the contract. 
• Artist Agreement requires a Letter of Agreement which specifies the terms and condition of the agreement and parties can use it while negotiating anything. It includes the standard business correspondence like the contact information, project information, tax ID, claims period, etc. So it needs to be clear enough to be understood by the parties. This needs to get signed before the artist is assigned with his or her work. Signing the agreement means the conditions are accepted and now the work can be initiated. 

Contents of an Artist Agreement

Biodata of the parties

A bio or an introduction is absolute proof to the world about any individual and in this case the bio proves that it is you, as a party, that is legally bound by the agreement. One must go through your bio to have a piece of detailed knowledge about you. Similarly, this is applicable in contracts and agreements as well. So biodata is the first entry to any agreement which includes your name, address, business, email, phone number etc. Therefore, a bio is very essential to know about the parties involved. 

Terms and conditions of the project

The second condition briefs you about the particular project for which the contract is being made. It also briefs about the respective responsibilities and obligations which the parties have to comply with. All of the conditions are expressed in a detailed manner. It contains all the conditions covering every aspect that can be taken into consideration in executing the project. Besides the duties, the contract specifies certain rights for the individuals where they can use their rights if in case there are any losses or damages that are incurred by the individual or in case of breach of any condition of the contract. In addition to that, it puts the required restrictions. The terms and conditions vary according to the nature of the project.

Duration 

The project’s timeline is as important as the conditions of a contract. You may incorporate the duration clause in the condition clause. This clause shouldn’t be missed out. It is essential to mention the expected time for the initiation of the project and the completion as well. Parties are required to conclude all of their responsibilities by the due time period. This clause should also include the consequences if either of the parties fails to comply with the conditions. However, the artist cannot be held liable for a delayed commission of work assigned to him if there is no such time-barred condition made by the client before. In case of a performance that is to be held in an enclosed venue,and where there was no time barred condition, the host of the venue cannot deprive the artist of his payment or any other bonus because of his delayed performance.

Payment terms

This clause talks about payment issues. First of all, this clause should set out the price of the project on which they are working. It is more of a time saver if you set out all the expenses initially, so that afterwards you can focus more on the project. This clause should also include the payment process i.e. how the party wants its payment to be processed throughout the course of a payment or final payment or anything of such manner. It should mention the responsibilities of each of the parties regarding the payments to be done by them. All the secret profits, fees or taxes should be disclosed within this clause. All the dates for specific payments need to be mentioned in this clause itself. The payment method preferences, such as payment made in cash or cheques or credit, of the artist or the client is also to be included in this clause. Besides that, the amount that is to be received by the side performers such as the dealers, venue hosts and other agents for their role in executing the project should also be added to this clause.

Itemization 

This clause should include all the necessary items required for the particular project, prices of the items, their descriptions and basic details to recognize the items. These items are basically included by the artists according to their requirements in performing the project. Images and titles etc also come within the purview of itemization. 

Online agreement

Artist agreements are not just limited to documented contracts, it also has various online platforms as well, where the client has to deal with various artists and the artists have to comply with the guidelines provided in the particular platform where the artist has to perform. The agreements may vary with every artist, the agreements may not be the same for all the artists performing for the online platform such as Streo, which is a live streaming platform for users to access live digital content from anywhere. Here the artists are in a contract with this platform and have to comply with the guidelines of the Streo.

Negotiation terms

In this clause, the parties should mention the outcomes or solutions for any cancellation made by either of them. The measures that can be taken if there is a cancellation by the parties at any point in time. And no matter for whatever reason the termination is made, the payment processing should not stop.

Artist’s right

This clause is included for the security of the performing artist so that his basic rights don’t get infringed in any way while the project is in process. And as far as the artist’s security is concerned we have provisions to protect copyright issues under intellectual property rights. 

Acceptance to the agreement

This clause comes into action when the parties have agreed to the agreement including the terms of the agreement followed by the names, signatures and the dates where the dealing is going to take place.

Alteration

If in any case, the parties want to alter any term in the agreement made they can seek for it in various ways:

1. Parties can go for a full revision before signing or accepting the contract.
2. Attach an appendix concerning the particular alteration to the original document of the agreement.
3. You can also make necessary changes in the original document itself by writing it down somewhere in the document in the presence of the parties involved for the purpose of witnessing it.

Cancellation term

This clause is added more as to suggest remedies if there is any situation arising from any kind of dispute which would lead to the cancellation of the agreement. Besides that if the agreement is getting cancelled it shouldn’t affect the artist in any way so there should be advance payment to the artist so that the time and effort for the particular project doesn’t go to waste. 

Royalty

This clause gives rights to both the parties for the royalty if there is any profit resulting from the project. Both the artist and the client are entitled to enjoy the royalty because the profit is the result of teamwork.

Importance of an artist agreement 

• An artist can be considered as an employee, thus it shows that there is an employee existing in the contract. In professional relationships, there is always a contract. An artist always receives a contract and it’s always important to create the terms of the agreement. The agreement is the key to show how substantial the agreement is.
• In the situation of an artist, it is very important for them to make a good contract on which they can rely on. An artist’s career is based on a good contract, thus it’s very vital for an artist to make a good agreement. Contracts are not always strong and it may not always protect you. But both sides of a party are always protected by a strong contract.
• The question in this is about why an agreement is important to an artist. And the answer to it is that the work of an artist involves a lot of originality. Taking the context of IPR in consideration, it should be protected. More the acknowledgement, the more the artist is prone to risks of getting the work pirated or copied.
• An artist contract is always based on a lot of requirements. While listening to a play, there are a lot of parts where the artist is hesitant to do and abstains himself or herself from doing but it can not be taken into consideration until it is stipulated in a contract. This protects the artist from performing an act which he or she does not want to. This shows how a contract plays an essential part in protecting the rights as well as the interest of an artist. This would avoid all sorts of differences while the original work is executed and the artist can take the contract into aid to protect the rights.

But now the question is; how can an artist build a strong contract? And the answer to it is the artist should hire a lawyer to deal with the legalities of the artist agreement in order to avoid disputes.

How can an artist protect his work

Generally, an artist gets a right to protect his original creativity under the copyright law from the whole world and prevent it from getting copied or usage without the artist’s permission. The creation can be anything relating to a specific art like music, drawing, any video or etc. 

Artists are either commissioned by a client to create the work or create their own work. In a client assigned work the artist usually stands as a freelancer or independent contractor which means there is no employer-employee relationship between the client and the artist. As the artist is an independent contractor he is entitled to all the rights to his work unless there is any condition to the contract mentioned in the clauses of the contract. 

Being an independent artist coming up with your own creation without a client’s involvement will open him to the market and for this, the artist has to compete with the trending business strategies and the business laws as well.

Provisions made concerning an artist’s work in the media industry

• The basic provision is the Copyright Act, 1957 which provides exceptions to protection such as ‘fair use’ and ‘compulsory license’ besides providing remedies in case of copyright infringement.
• The Trade Mark Act, 1999 usually protects the artist’s work-related title and names.
• There is a Co-production treaty which is done between India and other countries for giving incentive for any kind of collaboration or any production that is to be done by the client for the artist if the performance is required to be done in any foreign country. 
• Then there is the Central Board of Film Certification (Censor Board) which examines and handles the issues relating to film production. It basically observes if the film is fit for the audience or not and regulates all of the songs, promo, trailer, etc.
• The media industry imposes certain Service Tax under the Finance Act, 2012 such as the services provided by the artists and technicians and licensing any IPR within the industry is also liable to service tax.
• Then there is Entertainment Tax which we usually come across while booking any movie ticket. The exhibition of cinematography falls under the purview of entertainment tax.

Conclusion

The Indian media industry is growing rapidly with massive responsibilities over an artist and the client, because in the process of execution of the work the parties have to look after all the general aspects focusing on the audience requirements. The work should not defame or hurt sentiments of any audience, any group of people or any community. The success of an artist agreement is solely based on the terms and conditions which neither of them can refrain from.

References 

• http://www.copyright.gov.in/Documents/CopyrightRules1957.pdf
• http://www.ipindia.nic.in/writereaddata/Portal/IPOAct/1_43_1_trade-marks-act.pdf
• http://www.legislation.gov.uk/ukpga/2012/14/contents
• https://streoapp.com/club/terms.php
• https://www.rocketlawyer.com/document/letter-of-agreement.rl
• https://www.udviklingsplatformen.dk/upgrade-post/co-production-and-collaborations/

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This article has been written by Neha Mallik, studying at Vivekananda Institute of Professional Studies, affiliated to Guru Gobind Singh Indraprastha University. This article gives an understanding of mortgage deed and its essential elements. It also highlights the important clauses which are to be kept in mind, being a party to the mortgage deed.

The other day, one of my friends and I were discussing buying a new home. He told me about his plans. He is well sorted that he would soon buy a new home. He has a well to do job and earns a handsome salary. He spotted a house and very keen to buy that one. He has already talked to a bank executive to finance a home loan. But he was not acquainted with the documentation and legal work required for financing a loan. He asked me about the Mortgage. Buying real estate or taking loans from banks is not a day process. When you are new to the property game, it’s best for you to take instructions from a solicitor before taking any step ahead. When you are buying a home with a mortgage, it’s good to have knowledge about all the terms & conditions related to the Contract you are entering into.

If you are purchasing a property for the first time or thinking about buying in near future, you need to have an understanding of all the contracts you are entering into even if you are not a legal professional. Because in the end, you are the one who bears all the repercussions. I want everyone to know about the mortgage deed and its essential elements. I have also highlighted some necessary clauses which should be kept in mind while signing a mortgage deed. 

What is a Mortgage?

Before diving straight into the mortgage deed, first, we need to understand what a mortgage is? 

In India, Mortgage is governed under Section 58 to 104 of the Transfer of Property Act, 1882. A Mortgage can be defined as the transfer of interests in a specific property to secure the loan advanced or to be advanced in the future. In other words, we can say that when any person takes a loan from anyone, some security is required to be kept with the lender to have the assurance that in case of default in the repayment of the loan, the lender can recover his money from that security. 

The person who mortgages his property against the loan is called “Mortgagor.” Whereas the person to whom the property is mortgaged is called Mortgagee” and the terms and conditions related to mortgages are contained in the “Mortgage Deed”.

Most common forms of mortgages

Simple Mortgage or Registered Mortgage [Section 58(b)]

According to Section 58(2) of the Act, a property can be mortgaged:

• Without delivering possession of the mortgaged property.
• When the mortgagor binds himself personally to pay the mortgaged money by execution and registration of a mortgage deed. In the deed, he agrees that in case of his failure to pay the money, the mortgagee shall have the right over the property. The latter can sell the property to recover his money. 

Mortgage By Deposit of Title Deeds [Section 58(f)]

In English Law, a mortgage of this type is known as “Equitable Mortgage” as opposed to a legal mortgage because in this kind of Mortgage there is simply a deposit of document of the title without writing or any other legal formalities. This Mortgage, therefore, does not require any writing and being an oral transaction, is not affected by the law of registration. 

Section 58(f) of the Act says that in the notified towns specified by the State Government in the official gazette, any person can deliver his title deeds of immovable property to the banks with the intent to create security. 

Essential elements of the Mortgage by deposit of title deeds 

• There must be a debt.
• There must be delivery or deposit of title deeds.
• There is an intention that the deed shall be deposited for the purpose of securing the loan.
• There are territorial restrictions. 

Other Mortgages include

• Mortgage by Conditional Sale: The Mortgage is an ostensible sale with the condition that property would go back to the real owner after the repayment of the mortgaged money. 
• Usufructuary Mortgage: Here, the possession of the property is transferred to the mortgagee. The mortgagee can even earn the income from the given property.
• English Mortgage: After the transfer of the property, the mortgagor personally binds himself to pay the money on a specified date as per the agreement.
• Anomalous Mortgage: any other kind of Mortgage or combination of the above-defined mortgages come under the category of Anomalous Mortgage.

What is a Mortgage Deed?

Section 55(2) of the Act, talks about some relevant covenants or agreements which the parties are required to enter into for the conveyance of immovable property such as lease, sale, Mortgage, gifts etc. The mortgage deed is an instrument or a legal document containing terms and conditions relating to the Mortgage. The deed provides the lender with the interest and legal rights over the property. All the rights and interests over the property that the borrower has pledged as collateral are legalized in the Mortgage Deed. In case of any default or failure to pay the loan amount, the lender can claim his legal rights over the property. 

Registration of Mortgage Deed

Registration of mortgage deed is essential to give legal validity to the document. In case of Mortgage by Delivery of Title Deed, registration is not required. Following are the conditions which need to be fulfilled for a valid registration:

• The deed must be signed by the Mortgage.
• At least two witnesses must attest to the deed.
• Stamp duty must be paid accordingly; otherwise, the document is not enforceable.

When is the Mortgage Deed required?

• It is generally required when you are loaning money from another person or business and want to transfer the interest of the property to another person.
• When you want to borrow money and are required to mortgage your property as a collateral. The deed helps you secure your rights and interest over the property.

Why is the Mortgage Deed required?

• The first and foremost requirement of the mortgage deed is to determine the parties to the deed, i.e. the Borrower/Mortgagor and the lender/Mortgagee.
• The deed enforces the rights of the lender in the Court. It ensures that in case of the default or delay in repayment of the loan, the lender will get paid by selling the property.
• The mortgagee has the right to foreclose on the property in case the mortgagor stops paying or breaches the terms of the Contract. 
• The deed gives a thorough investigation as to the interest and title over the property. It helps to determine the rightful owner of the mortgaged property.
• The mortgage deed helps to determine the loan amount and the rate of interest.
• The mortgage deed also gives the right to the mortgagee to take possession of the property, if specified in the Contract.
• The mortgage deed acts as evidence that the property is transferred to the lender. 

Essential elements of Mortgage Deed

I hope now you have understood the basics of a mortgage and mortgage deed by now. Being a layman, you might not understand the legal language used in a contract. You might leave such things on your legal representative, but you should at least have the basic understanding of the clauses and terms in a Mortgage Deed. Following are the clauses in the Mortgage Deed which you must understand:

Parties

It is essential to specify the name of the mortgagor and the mortgagee in the mortgage deed. The person who transfers the interest of his property as collateral to take a loan is called mortgagor, whereas the person to whom such interest is transferred is called the mortgagee. It must be noted that the mortgagor must be competent to enter into a contract as per under the Indian Contract Act, 1872 whereas the mortgagee may be a minor. He may not be competent as per the Contract Law. 

Description of the Deed 

It is essential to specify the title of the deed in capital letters for example “THE DEED OF MORTGAGE.”

Details of the property

In this clause, all the material description of the mortgaged property should be specified. For e.g.: the location of the property, the value of the property, its specification and all the material facts which need to be disclosed should be mentioned. 

Recital

Recitals in a contract are the introductory statements disclosing the intention of the parties to enter into the Contract. The recital is also called the preamble containing a few characteristics of the agreement. It usually starts with a sentence like “Whereas the mortgagor has agreed” or “whereby the mortgagor has the rights”. 

Habendum

This particular clause determines the quality or extent of the interest of the mortgagee and the mortgagor over the mortgaged property. The provision defines the rights that the mortgagee is going to enjoy over the property. It also restricts the rights of the mortgagee as per the agreement.

Covenant for repayment

This clause specifies the modes and conditions for the repayment of the loan amount. The clause also recites the consideration and tenure for the repayment of the mortgaged money. It also specifies what are the conditions when the mortgagor wants to pay the loan before the stipulated time period.

Mortgage Clause

This clause highlights the type of Mortgage the parties have agreed. It is the most important clause of the mortgage deed as all the rights and duties of both the parties are dependent on the type of Mortgage by which the property is being mortgaged. Say for example, in the English Mortgage the mortgagee has the absolute right to sell the property. While the simple mortgage possession of the property is not necessary. The clause also describes the duty of the mortgagee and mortgagor like:

• In case the mortgagee has repaired the property, he can claim the money from the mortgagor if given in the Contract.
• The mortgagor shall repay all the other costs.
• If it is specifically mentioned in the clause that the mortgagor cannot lease the mortgaged property without taking the prior permission of the mortgagee, the former cannot do so without the consent of the latter.

Possession

The clause decided whether the mortgagor has the right to exercise possession over the mortgaged property or not. It also depends upon the type of Mortgage you are choosing to mortgage the property. E.g., in the simple Mortgage, the possession may remain with the mortgagor. On the contrary, in the Usufructuary Mortgage, the possession of the mortgaged property must be delivered to the mortgagee.

Title deeds

The above clause clarifies as to what title deeds need to be transferred to the mortgagee. If it is given in the clause that all the title deeds related to the mortgaged property must be given to the mortgagee, then the mortgagor shall transfer all the documents of the title deed to the mortgagee. 

Insolvency

This clause is an essential clause in the mortgage deed as it specifies the treatment of mortgaged property in case the mortgagor is declared insolvent. 

Required Documents

In this clause, all the documents which are necessary for making the deed valid and identifying the parties are specified. For e.g.: PAN card, Adhar card, Passport, Bank passbook, Property Documents, Voter’s ID, Driving License.

Redemption clause

Redemption is again the most important and fundamental right possessed by the mortgagor. It is an essential attribute of the transaction of the Mortgage. It’s a statutory right given to the mortgagor under Section 60 of the Act. The clause specifies the tenure of the mortgage deed as to when the mortgagor is entitled to get his property back. The clause says that on payment of the principal and interest after the expiry of the due date for the repayment of money, how the property is supposed to go back to the real owner of the mortgaged property. 

Attestation and stamp duty

It is pertinent to state that the mortgage deed shall be duly registered and stamped to have legal validity. In case of a Simple mortgage, if the deed is not signed, registered and attested by at least two witnesses, it is equivalent to not having a contract in the first place. The criteria of attestation and registration depend upon the kind of Mortgage. There are some kinds of mortgages that require no registration and attestation if the principal money is less than 100 rupees. 

The nominal stamp fee must be paid. The stamp fees depend upon the state the property is located. 

Certain clauses which should not be ignored 

We generally take loans from banks. They usually have standard contracts. We just sign them without reading the whole agreement, which later on hurt us. So it is essential to read the following clauses carefully: 

Interest rates

We have to be very careful about the interest rates charged by the mortgagee. Sometimes it is a fixed rate, but sometimes the rates can be fluctuating, which is a matter of concern. The fluctuating interest rate empowers the mortgagee to change the interest rates according to the fluctuations in the base rates. So whenever you are signing any mortgage agreement, you must carefully look at the interest rates in the agreement.

Amendment clause 

Such clauses may completely go against the interest of the mortgagor as it gives power to the mortgagee to alter the clauses of the agreements in the event of the default of the party. 

Lease Clause

This clause allows the mortgagor to lease the mortgaged property with the prior permission of the mortgagee. This clause is beneficial for the mortgagor.

Possession

You must check carefully whether you have to give the possession of the property to the mortgagee or not. Sometimes this clause creates legal issues if not read properly as there can be loopholes in this clause.

Wrapping up

It is imperative to understand the terms and conditions of a contract you are entering into. Legal professionals may make mistakes while drafting a mortgage deed, but you need to make sure that you won’t suffer from the common issues only because of negligence. There are some essential clauses in the deed which can create a lot of problems for you if not read correctly. That is why the understanding of these important clauses is necessary. I hope this article has helped you and made you understand about the Mortgage, the mortgage deed and some important clauses which are the backbone of the whole deed of Mortgage. 

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This article is written by Antra Shourya from the Faculty of Law, University of Delhi. The article explains the price ascertainment under Sale of Goods Act 1930, it dwells on various provisions under the act which provide how price is determined, future fixations and price fixed by valuations. 

Introduction

The Sale of Goods Act, 1930 can be viewed against the backdrop of Indian Contract Act, 1872 and Transfer of Property Act, 1882 and it lays down special rules of law in regard to sale of goods. The Sale of Goods Act doesn’t repeal any provisions of the Indian Contract Act, it applies to contracts sale of goods under Indian Contract Act, 1872 and if a rule of law is not consistent with this act is not repealed. Price ascertainment is a very crucial part of any contract of sale. When formulating a contract of sale the presence of money consideration is an essential element. When the consideration is not money but some other valuable consideration the transaction is a barter and not a sale, which makes price determination at the time of concluding a sale essential. 

What is a sale?

According to Section 4 of the Sale of Goods Act, 1930 a contract of sale is a contract where the seller transfers or agrees to transfer the property in goods to the buyer for a price. It is a composite transaction consisting of an agreement to sell, passing of title, delivery of goods and payment of price, costs and charges of transportation.

• Hyderabad Engg Industries v State of AP 

In this case the said Company was engaged in the manufacture and sale of electrical fans, sewing machines, fuel injection parts and accessories etc.There were prior contracts between the purchaser and the assessee and in pursuance of those contracts, the goods moved from the assessee’s factory at Hyderabad to its Branch offices to be delivered to the purchaser/ their nominees. In pursuance to sales agreement, the purchaser placed monthly orders to the seller with instructions to dispatch the goods of given size and quantity to the named destination.Following the orders,the seller dispatched the goods to its State godowns and the person-in-charge of the godowns to the purchaser division office by raising sales invoice.

Therefore, the transaction between the seller with its branch offices was a clear case of inter State sales within the meaning of Section 3(a) of the Sale of Goods Act, 1930 and not branch transfers as claimed by seller. The SC explained the difference between ‘sale’ and ‘agreement to sell’ stating that if the transfer is in present it is called a “sale” and when the transfer is to take place at a future time and is subject to some conditions to be fulfilled subsequently, the contract is called “an agreement to sell”. When the time in the agreement to sell lapses or the conditions therein subject to which the property in goods is to be transferred are fulfilled, the “agreement to sell” becomes a “sale”. 

• State of Madras v Gannon Dunkerley & Co.

In this case the meaning of expression ‘sale of goods’ with respect to the State’s power of taxation on the materials in construction works, the legislative practice and the nature of the agreement in the building contract with respect to the Indian Sale of Goods Act, 1930 was debated. The issue was whether “works contracts’ ‘ were included within the ambit of the Madras General Sales Tax Act and the Company was made subject to the levy of sales-tax within the limitations provided in the Madras General Sales Tax Act and court dwelled in to what constitutes a “sale of good”, the SC held that in order to constitute a sale, it is necessary that there should be an agreement between the parties for the purpose of transferring title to goods, which of course pre-supposed the capacity to contract, that it must be supported by money consideration that as a result of the transaction, the property must actually pass in the goods. Unless all these elements were present there would be no sale. It was held that the expression” sale of goods meant that there must be an agreement between the parties for the sale of the very goods in which eventually property passed.

What is the ascertainment of price?

According to Section 2 of the Sale of goods Act, “price” means the money consideration for a sale. Ascertainment of price is discussed in two sections under the Sales of Goods Act, 1930, Section 9 and Section 10. Price in a contract maybe: 

1. Fixed by the contract itself. 
2. Left to be fixed by an agreed manner.
3. Determined in the course of dealing between the parties. 

In the absence of this the buyer must pay the seller at a reasonable price. What is reasonable price is a question of fact dependent on the circumstances of each particular case.

In order for a contract to be a contract of sale it is essential that it should provide for the payment of a money consideration for goods. Section 9(1) says that the price in a contract of sale may be fixed in three ways, firstly by the contract itself, secondly it may be left to be fixed by a manner agreed by the seller and the buyer and lastly it may be determined by the course of dealing between the parties. 

• • The parties can choose any currency as the price of the goods. However, it is not necessary that the contract should specify the amount; the parties can leave the price to be determined by a method as they please and when it is so determined, the position is the same as if the parties had fixed it by the contract itself. Under Section 9 of the Sale of Goods Act, parties may fix the price at the time of transfer or may leave it to be determined at a later stage. 
  • Price can be fixed in the future. It is not necessary that the price is determined at the time when the contract of sale is drafted. Future fixation of price is also valid under Section 29 of Indian Contract Act, 1872. Such a contract is not void for uncertainty because the price was not fixed. 
• Bhupendra S Bhatia v State of MP

In this case the State government framed a new policy for sale of liquor in some parts of the State under a monopoly. Bids were invited from manufacturers for supply of liquor and adhoc price was fixed for an entire financial year. Subsequently a final price was fixed at a rate lower than the ad-hoc price and the supplier became liable to repay to the state the difference between the final price and the adhoc price. In it’s judgment the Supreme Court held that the price must be known at the time of sale. The Court ordered that the adhoc rate should prevail for the entire year.The court said when a sale of any commodity is made, the seller and the purchaser both have to know the sale/purchase price at the time of or before the sale.

A sale/purchase price to be fixed subsequent to the sale is unknown in the world. If a sale of a commodity is made today and if the purchaser informs the seller that he will inform the purchase price subsequently, then it can always be open to the purchaser to reduce the purchase price subsequently to a negligible amount. Similarly, if the sale price can be fixed subsequent to the sale at the option of the seller it can be increased by the seller at his option, and the seller can later on while demanding the sale price increase it to an exorbitant amount. Such a view is not clearly contemplated by any sensible person or by any stretch of imagination. In fact, such an action by the State Government has to be treated as arbitrary and unreasonable.Further the court ordered that the adhoc rate should prevail for the entire financial year. 

Price may be made subject to escalation clause in the agreement. Price may change at the time of delivery of the goods. The buyer may put the condition that price ruling on the date of delivery would apply. 

• Aluminum Industries Ltd v Minerals & Metals Trading Corporation Ltd.

In this case, the said company was one of the prime manufacturers of Aluminium cables and conductors for supply to State Electricity Boards and other power utilisers in the country. For the manufacture of such conductors and cables, Aluminium is the basic product. Aluminium being an essential commodity, its production, distribution and supply were governed by the provisions of the Essential Commodities Act, 1955, and the orders made thereunder. The government undertaking sold metal to the company on the condition that the price ruling on the date of delivery would apply. The purchasers opened letters credits in favour of the seller and were issued delivery notes to enable them to take delivery of goods. Thereafter, the price of the goods was raised and delivery was postponed for no valid reason to a date after rise in price came into effect. It was held that the purchaser could not be compelled to pay the higher price. Government’s actions were held unreasonable and violative of Article 14, Constitution of India, hence writ petition under Article 226 was maintained in the High Court of Madras and the government was asked to sell at the price according to the scheduled delivery.

• In English law ‘when price is left uncertain in a contract of sale, reasonable price of the goods can be determined later, even when the contract is silent as to the method by which the price is to be determined. An agreement to pay a reasonable price will be implied; and what is implied by law is as strong to bind the parties as if it were under their hand. An agreement that one of the parties shall have power to fix the price himself is valid and a bona fide determination of the price by him would be binding.

Reasonable Price

Section 9(2) says that when the price is not determined by the contract itself, the buyer shall pay a reasonable price, and that reasonable price will be determined by circumstances of each case.

• • When the nature of the goods is such that there is a market price for them then the market price will be taken as a reasonable price between the parties, though not conclusive, as accidental circumstances may make the current price unreasonable in the particular transaction. 
  • A subsequent fixing of the price by agreement of the parties is very strong evidence of what they think and therefore of what for them is reasonable. The principle may seem difficult to apply, as for instance when goods have been shipped, so as to pass the risk to the buyer but the exact price is to be determined by weighing or measuring the goods on their delivery from the ship. 
•  Martineau v Kitching (1872)

In this case the contract was made for Sugar to be sold, with the price payable ‘Prompt at one month; goods at seller’s risk for two months’, to be kept at the seller’s premises and drawn down by the buyers as wanted. After two months and after only some of the sugar had been drawn down by the buyers, a fire destroyed the rest. The buyer was asked to pay for the undelivered sugar which had been burned in the fire, the seller brought an action ‘to recover the price of [the] sugars sold’ and the question was whether the sellers were so entitled. The court held that the seller was entitled to recover the price. Lord Blackburn J said (in cases) “where the price is not ascertained and it could not be ascertained with precision in consequence of the thing perishing, nevertheless the seller may recover the price of the risk is clearly thrown on the purchaser, by ascertaining the amount as nearly as you can.”

Price to be Subsequently Arranged by the Parties

Section 9 also provides that ‘the price might be left to be fixed by subsequent arrangement,’ so that if there was a sale at a price to be subsequently agreed on by the parties there would be a valid contract; just as there is a valid contract of insurance ‘at a premium to be arranged’ for if no arrangement is made, a reasonable premium is payable. It would appear that if the arrangement is that the goods shall be sold at a price to subsequently agreed, there is no concluded contract for such an arrangement and where there is an effect of impliedly excluding an agreement to pay a reasonable price and the price is not ascertained which is an essential element in the contract. Presumably, however, if the goods were actually delivered and accepted under such an arrangement, the buyer would have to pay a reasonable price.

Can price be fixed by valuation? 

Price can be fixed by valuation. Section 10 of the Sales of Goods Act, 1930 talks about an agreement to sell at valuation. One of the methods of ascertaining the price is to leave it to be determined by the valuation of a third party and Section 10 deals specifically with that method.

Section 10(1) states that price can be fixed by valuation by a third party, if the price isn’t fixed by valuation such contracts can be avoided, and lastly if any part of the contract is delivered then the buyer has to pay full price for it.

Further Section 10(2) of the section provides for remedy in case the valuation is disrupted by one party, then the other party has the right to sue the party at fault for damages.

• Generally, when the agreement stipulates that price is to be fixed by a third party, word of that third party will be final and binding. As under such a contract there is no other means of fixing the price, the contract is conditional on it’s being so fixed and consequently if the valuation does not take place there is no contract, and presumably if the proposed buyer has paid any money under it in respect of the goods, he may recover it as on total failure of consideration; and as provided by the section, if the buyer has received and taken any part of the goods, he must pay a reasonable price for them.
• If a time is fixed by the contract for the appointment of a valuer, it is usually of the essence of the contract, so that if the valuer is not appointed by that day, the contract is avoided; and if a particular person is named or appointed as a valuer, the task of vauling cannot be delegated to another. Neither party, therefore, is liable to pay, without his default, the valuations does not take place and even if one of the parties wrongfully prevents the valuation from taking place, the only remedy for the other party is an action for damages for preventing the valuation. Moreover, there being no contract, equity cannot decree specific performance though in cases where the court is of opinion that the appointment of the valuer is not of the essence of the contract, it may ascertain, the value for itself and decree specific performance after so ascertaining the price. In appropriate cases too it may make a mandatory order on the party obstructing the valuation.
• The valuation is complete when everything for the valuation has been ascertained and no more remains to be done, but the arithmetical calculation. It may however be questioned if the valuer has proceeded on a wrong standard or taken into account things which by the agreement ought to have been omitted. A valuation may also be impeached on the grounds of fraud or collusion. When valuation is made pursuant to agreement of the parties, it binds them, and the remedy of the party who pays too high price, or receives too little, is against the valuer. Where valuer has been fraudulent or negligent, he may be personally liable to a party who suffers loss as a result. 

Conclusion 

A sale is concluded when there is a transfer of property from seller to buyer for a consideration of money or promise for the same.Consideration of money is essential for a sale. Price in a sale can be determined by the contract itself, left to be fixed by an agreed manner or determined in the course of dealing between the parties. Section 9 of the Sale of Goods Act provides that price may be fixed by the parties in manner agreed upon by the both parties.In absences of a fixed method to determine the price the buyer shall pay a reasonable price to the seller for the good. Price can be fixed through valuation also by a third party if both the parties agree to it. 

References

• https://www.taxmanagementindia.com/visitor/acts_rules_provisions.asp?ID=335
• http://uputd.gov.in/site/writereaddata/siteContent/indian-contract-act-1872.pdf
  

Books

Pollock & Mulla, The Sale of Goods Act, Ninth Edition.

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This article is written by Vishwas Chitwar currently pursuing B.COM LLB (HONS) from Institute of Law Nirma University. This is an article which deals with various legal principles regarding the transfer of property under The Sale of Goods Act, 1930.

Introduction

The term passing of goods or property means that there is a transfer of ownership which is governed by the principles of the Sale of Goods Act, 1930. In order to understand the rights, duties and liabilities of both the seller and the buyer it is very important to understand the concept of passing of property. It is a settled principle of law that along with the ownership of the goods or property, the risk is also transferred from the seller to the buyer. This article will be dealing with the various principles and provisions pertaining to Passing of property in the light of the Sale of Goods Act, 1930.

Types of Goods under the Act 

There are three types of goods under the umbrella of the Sale of Goods Act, 1930 and they are as follows:

1. Existing Goods 
2. Future Goods 
3. Contingent Goods

Existing Goods 

As per Section 6 of the Sale of Goods Act, 1930, those goods which are present (in existence) at the time of formation of a contract are known as existing goods. The existing goods can be further classified as:

Specific Goods 

As per Section 2(14) of the Sale of Goods Act, 1930, specific goods are those goods which are specifically identified and ascertained by the buyer which he intends to buy at the time when the contract of sale is formulated.

For example, Deepak wants to sell his old guitar. He put an advertisement in the local newspaper with its picture, make and other details. Rahul agrees to buy the guitar and thereby formed a contract with Deepak. The guitar is a ‘Specific Good’ in this case.

Ascertained Good 

Ascertained goods are not defined under the Sale of Goods Act, 1930 and many jurists have considered specific Goods and ascertained Goods as alike. However, ascertained goods can be called those goods which are specifically selected from a large set of goods. 

For example, Deepak went to buy oranges in a wholesale market. He specifically selected 300 oranges from a larger set of unspecified oranges. These 300 oranges will be ascertained goods.

Unascertained Good 

Unascertained goods are those goods which are not specifically identified by the buyer at the time when the contract for sale is formulated. 

For example, Deepak from his 300 oranges wants to sell 100 oranges; however he doesn’t specify which oranges he wants to sell. This is called a sale of unascertained goods.

Future Goods

As per Section 2(6) of the Sale of Goods Act, 1930, future goods have been characterised as those goods which at the time of formation of the contract will either be “manufactured, produced or acquired by the buyer”. There will not be an actual sale in the sale of future goods, it will always be an “agreement to sell”. For example, Deepak has an orange grove with oranges in it. He agrees to sell 500 oranges to a buyer once the oranges are ready for market. This is a sale which will happen in the future. However, the goods have already been identified along with the agreement to sell. Such goods are known as future goods.

Contingent Goods

Contingent goods are a subtype of future goods. In contingent goods, the sale happens in the future. The sale will always come with some contingency clause in it. For example, if Deepak sells his oranges from his orange grove when the trees are yet to produce oranges, then the oranges are contingent good. This sale of contingent goods will be dependent on a condition that the trees will produce oranges, which may or may not happen.

Legal Principles regarding Transfer of Goods

There are four principles regarding the transfer of goods under the umbrella of The Sale of Goods Act, 1930, which the article will be talking about and they’re as follows: 

Transfer of property in sale of Specific or Ascertained Goods

Section 19 to section 22 of The Sale of Goods Act, 1930 are a few sections which govern the transfer of goods in a case where the goods are specific and ascertained in nature:

Property when intended to pass (Section 19)

Section 19 of The Sale of Goods Act, 1930, is divided into further subsections and they’re as follows:

1. Where a contract for sale of ascertained or specific goods exists, a specified time is fixed as per the convenience and consensus of both the parties at which the property is intended to be transferred from the seller to the buyer. 
2. One has to pay attention to the circumstances and conduct of both the parties to the contract in order to understand the true intention of the contracting parties. Also, the terms of the contract should be given equal importance in the existing case. 
3. Except if an alternate intention shows up, the principles laid under the Section 20 to 24 of the Act will help in finding out the intention of the contracting parties in respect with the time at which the goods are about to get transferred from the seller to the buyer. 

Specific goods in a Deliverable state (Section 20)

Section 20 of The Sale of Goods Act, 1930 relates to specific goods in a deliverable state, and it states:

In a contract for the sale of specific goods, which is unconditional in nature, the goods are transferred from the seller to the buyer at the time of formation of the contract. However, the only precondition required for the transfer of property is the fact that the goods must be existing in a deliverable state. The delay in the payment or delivery of goods or both is not something which holds importance.

Example: A goes to a big electronic shop in order to buy a television set. He selects a big plasma Television set and asks the shopkeeper to deliver the television at his house which is at the other end of the town. The shopkeeper agrees to it. With this, “A” will become the owner of the television, and the Television set will become his property. 

Specific goods to be put into a deliverable state (Section 21)

Section 21 of The Sale of Goods Act, 1930: certain goods to be put in a deliverable state: 

Where there is an existence of a contract for the sale of specific goods, the property concerned in the transaction will only be passed to the buyer, if the seller performs the necessary acts and omissions in order to put the goods in a deliverable state. Also, it is mandatory for the seller to notify the buyer regarding the alterations.

Example: A goes to a mall to buy a smart television from an electronics store. He selects a big fancy smart TV from the electronic section and asks for its home delivery. The manager agrees to deliver it to A’s home. However, at the time where he selects the smart TV, it doesn’t have an operating system installed. The manager promises to install the operating system and on the next day, he informs “A” that his smart TV is now installed with the operating system and is ready for its delivery. Further, he asked for his permission to make the delivery. 

In order to summarize the example, the goods will only be transferred to “A” if the manager has installed the operating system making the smart TV ready for its use.

Specific goods are in a deliverable state but the seller has to do something to ascertain the price (Section 22)

Section 22 of The Sale of Goods Act, 1930: Specific goods are in a deliverable state but the seller has to do something to ascertain the price:

Where there is a contract for the sale of specific goods in a deliverable state, the seller is undoubtedly bound to weigh, measure, test or do the necessary demonstration or anything which is required in reference with the sale of those particular goods. He’ll be doing this to ascertain the appropriate value of the goods. The property in the goods will not pass until such demonstration or particulars are done and the buyer has acknowledged it thereof.

Example: Rishabh sells a wooden bed to Deepak and agrees to assemble it in Deepak’s bedroom as it was a part of the agreement. Rishabh delivers the wooden bed and makes a call to him informing Deepak that he will assemble the wooden bed the next day. That night the wooden bed gets stolen from Deepak’s premises. In this case, Deepak will not be liable for the loss since the wooden bed was not passed to him. According to the terms of the contract, the wooden bed would be in a deliverable state only after it is assembled.

Transfer of property in sale of Unascertained Goods

Section 23 of The Sale of Goods Act, 1930 govern the transfer of goods in a case where the goods are unascertained in nature:

Sale of unascertained goods and appropriation (Section 23)

Section 23 of The Sale of Goods Act, 1930, is divided into further subsections and they’re as follows:

Section 23(1) Sale of unascertained goods by description: 

In a contract, for the sale of unascertained goods by description, if goods of a specific description are appropriated either by the seller with the consent of buyer or by the buyer with the consent of the seller, then the goods are passed to the buyer. The consent can be expressed or implied and can be given before or after the appropriation is made. 

Section 23(2) Delivery to the carrier: 

The seller has unconditionally appropriated the property if he delivers the property to the buyer/ carrier/ bailee for the reason of transmission to the buyer, however, he doesn’t reserve the disposal rights to the property, then it can be said that he has appropriated the contract.

Goods sent on “sale or return”

When goods are disposed on the basis of “sale or return” by the seller, the ownership of the goods aren’t transferred to the buyer unless the buyer gives assent to the goods. However, if these goods are held by its buyer without giving an approval then they’re taken as goods whose ownership is yet to be transferred. In that case, they’re treated as goods which belong to the seller and not the buyer. 

Goods sent on approval or “on sale or return” (Section 24)

Section 24: In a case where the goods are delivered to the buyer either on approval or on “sale or return” or on other comparable terms then:

(a) The goods therein will only pass to the buyer if the buyer either portrays his consent or acknowledges to the seller or does any act by which the transaction would be adopted. 

(b) The goods therein will only pass to the buyer if the buyer doesn’t express his consent or acknowledgement to the seller that he intends to reject the goods, however, holds the goods without giving a notice to the buyer then on the expiration of time frame for the return of the goods or if time hasn’t been fixed, then on the completion of a reasonable time, the property will be passed to the buyer.

Example: “A” the seller of a precious necklace gives it to “B” the buyer on “Sale or return” basis. B after observing the necklace finds it very beautiful and put forth his consent on buying the necklace. In this case, the goods will be transferred to the buyer. However, if the buyer doesn’t wish to give the acknowledgement for the product then the goods shall be duly returned back to B.

In case of right to disposal

The intention behind reserving the right of disposal of the goods is to make sure that the value of the product is paid before the property is transferred to the buyer. However, under the prepared value system, the ownership follows the possession. That is to say, the seller transfers the possession of the goods but retains the ownership until the buyer pays the appropriate amount.

Reservation of Right to Disposal (Section 25)

Section 25 of Sale of Goods Act, 1930 deals with the conditional appropriation of goods and is bifurcated into the following subsections:

Section 25(1): As per the terms and conditions of the contract the seller of goods reserves the right of disposal of the goods in a situation where the sale of specific goods is concerned. Despite the delivery of the goods, the goods will not get transferred from the seller to the buyer unless the subsequent terms of the contract aren’t appropriated or fulfilled. 

For example, A sends certain goods by rickshaw to B and instructs the rickshaw driver not to deliver the goods until B pays him the price which was set between them as per the agreement. The rickshaw reaches the destination in time. However, the buyer “B” refuses to pay the amount as he had no money with him at the moment. Here the rickshaw driver can refuse to deliver the goods and the seller can rightly exercise his right to disposal.

Section 25(3): A few perspectives pertaining to the transfer of property during a sale of goods or property are encapsulated in Sales of Goods Act, 1930. The liabilities of the buyer and seller are determined in consonance with the provisions enshrined from section 18 to 25 of The Sale of Goods Act. The concept of possession of goods differs from passing of the goods as the latter in essence means transfer of ownership from the seller to the buyer while the former is confined to the custody of goods.

Cases pertaining to Transfer of Property 

Badri Prasad Vs. State of Madhya Pradesh

In the case of Badri Prasad Vs. State of Madhya Pradesh, the appellant entered into a contract in respect of certain forests in Madhya Pradesh. He was entitled to chop teak trees with girth over 12-inch. After the passing of the Abolition of Proprietary Rights (Estates, Mahals. Alienated Lands) Act, the appellant was prohibited from cutting trees in the exercise of his rights under the contract. 

He filed a suit claiming specific performance of the contract on the grounds:

(1) The forest and trees did not vest in the State under the Act; 

(2) Even if they vested, the standing timber, having been sold to the appellant, did not vest in the State; 

(3) In any event, a new contract was completed on 5 February 1955, and the appellant was entitled to its specific performance. 

The court held: The forest and trees vested in the State under the Act. The plaintiff was entitled to cut teak trees of more than 12-inch girth. However, it had to be ascertained which trees would be falling in that Description. Till this was ascertained, they will not be ascertained goods as per Section 9 of the Sale of Goods Act.

Multanuak Chempalal Vs. C.P Shah & Co. 

In the case of Multanuak Chempalal Vs. C.P Shah & Co., Section 26 of the Sale of Goods Act 1930 was discussed and it was held that the risk passes only after the property in the agreement has been passed. Thus, the parties can enter into a contract which provides for the passing of risk before the passing of property. 

Hoogly Chinsurah Municipality vs Spence Ltd

In the case of Hoogly Chinsurah Municipality vs Spence Ltd, the Hoogly Chinsurah Municipality contracted with Spence Ltd to buy a tractor on the condition that if the municipality is not satisfied then it will reject the tractor. The municipality took possession of the tractor, used it for a month and a half and then rejected it. The suit was filed upon the unwillingness of Spence Ltd to accept it. The Court while dismissing the appeal held that, the municipality had not only used the tractor but also extinguished a reasonable time. Hence the property in the tractor had passed to the municipality and they could not reject it now.

Conclusion

The Sale of Goods Act, 1930 tells us about a few views regarding the transfer of property during a contract pertaining to the sale of goods. Section 18 to 25 of the Sale of Goods Act, 1930 provides the contracting parties several principles, through which rights and liabilities of the buyer and seller are determined. Passing of the goods from the seller to the buyer portrays the transfer of ownership from one party to another, which is without an exception a different concept from that of the possession of goods as possession only involves custody of goods.

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This article is written by Millia Dasgupta, from Jindal Global Law School. This article covers the principle of Pacta Sunt Servanda. 

Introduction

It is a Latin term that means agreements must be kept. It is present in both Civil law and international law. In international law, it means that every treaty is binding upon the parties and they must be executed in good faith. Good faith is a sincere intention to carry out obligations without malice. The parties under this treaty must fulfil their promises and obligations to the best of their abilities. This is subject to some conditions which we shall be discussing later on in the article. 

History

The principle can be traced back to religious origins. In the Koran, it has been stated that “Be true to the obligations which you undertake”. This religious principle in the Middle East soon manifested in commerce and ruled commercial contracts and transactions.

The Romans also respected this principle and was an extremely important part of their judicial workings. It even had a great role to play in Christianity. 

During the renaissance, this principle was established in the theories of Machiavelli and soon became an important part of International law. 

What are treaties?

It is a law of treaty. They are also known as conventions (large scale treaty), pact, exchange of letters, protocol (amendment to the treaty), covenant, etc. They are formal written agreements and are between ‘actors’ of international law. Actors can also be countries, sovereign and non-sovereign nations and international organizations.

The codified law on treaties is the Vienna Convention on the law of Treaties (VCLT). It consists of a preamble, divided into 8 parts and 85 articles and came into force on Jan 27th, 1980. Non-sovereign states can also conclude treaties, colonies, trust territory, ‘Protectorate, Vassal State can also be a part of this treaty. (definition of terms) 

Treaties can be classified into two categories- law-making treaties that are treaty that are large scale and treaties that are contracts which are usually for a specific issue.

International law is silent on the fact that which treaty is valid and which is invalid. Thus, it seems like the states decide which treaty is valid or not. The treaty is also invalid if they violate the general principles of international law. These treaties are also open to revision but revision and amendment must be done according to proper procedure. 

Laws regarding this Principle

General Principle Of Law

The law embodies an important principle in the General Principles of Law. The General Principles of Law are sources of international law. The principles of Pacta Sunt Servanda are also embodied in the Permanent Court of Justice and The International Court of Justice. With regards to the UN, it is believed that all member nations are ‘civilized’ and are expected to follow the principles of Pacta Sunt Servanda when dealing with obligations, agreement and promises. This is keeping in mind that the parties involved in these treaties and international agreements have given their consent, as international law is a consent-based system.

The Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations (1970)

It states that every UN state in good faith must follow the following obligations:

• Obligations under the UN Charter,
• General recognized principles and laws under international law,
• Obligations under valid treaties. 

It also states that even under conflicts between these two states, the obligations under the charter must prevail. Even in the process of exercising their own sovereign rights, the countries must keep in mind their obligations to the treaties as well. 

It must be noted that ‘obligations’ does not mean only duty. Here obligation means the states must perform their duties and also keep in mind their rights. These rights should also be expressed in good faith.

Article 26 of the Vienna Convention

It is under this very heading that the principle of ‘Pacta Sunt Servanda’ is established. This article is under Part III, section 1 of the Vienna conventions which lays out all the principles the party must observe when entering a treaty.

The Article states “Every treaty in force is binding upon the parties to it and must be performed by them in good faith.” There is also a prerequisite to this where the states must have given their consent to enter such a treaty. 

Such a law was adopted in the convention to find a space for interstate relations where obligations are respected and carried out in good faith. The principles of good faith and free consent of this principle is largely seen in other aspects of international law. 

Scope Of Pacta Sunt Servanda

According to Article 18 of the VLCT, states are asked to refrain from doing any acts which would hamper the outcome of the treaty. This is under the prerequisites that it has signed the treaty that has been subsequently ratified. This is until it has made its intentions clear that it does not want to be a party to the treaty. This is also subject to the fact that its entry into the treaty has not been unduly delayed. 

Under this principle, certain laws are also declared to be recognised and are thus valid. It ratifies the principle of ‘lex specialis’ and ascertains that laws must be obeyed. 

Exercising Pacta Sunt Servanda

Judge Lauterpacht in the case of Norwegian loans case in 1957 observed that “Unquestionably, the obligation to act in accordance with good faith being a general principle of law” is also a part of international law. 

According to Article 27 of the Vienna Convention, one can not use the defence that their domestic laws prevent them to act out a treaty which they consented to, but in certain cases where the treaty violates a ‘fundamental internal law’ of the country who has consented, then the treaty will be deemed invalid. (Section 46 of the Vienna Convention) 

In the case of ‘treatment of Polish Nationals and Other Persons of Polish Origins and Speech’, it was held that one cannot expect a consenting country to violate their own constitution in order to abide by rules of a treaty. 

Thus, if the treaty does not violate a fundamental law, the countries must abide by the rules of the treaty even if they are non-enforceable by their municipal laws. In some cases, the countries are required to incorporate laws from the treaty in their own municipal laws. The ‘Convention on the Settlement of Investment Disputes Between States and Nationals of Other States’ provides that countries shall be required to take legislative steps in order to ensure that the guidelines of the treaty are followed. 

Article 18 of the Vienna Convention provides that States must refrain from acts that would defeat the purpose of the treaty. This duty becomes enforceable only when the country has signed or exchanged instruments which constitute ratification of the treaty. This duty applies even if the entry of the treaty becomes enforceable later on. The words ‘defeat the object and purpose of the treaty’ were inserted and replaced by the words ‘tending to frustrate the object of a proposed treat’ as such words seemed vague.

Article 25 of the Vienna Convention allows for certain clauses of the treaty to be changed in the future. This is subject to the fact that the treaty explicitly states that such clauses can be changed in the future and that such changes do not defeat the purpose of the treaty itself. 

Can violation of domestic law on treaty-making be a reason for non-compliance with international obligations in the form of treaties?

It may be possible that certain clauses of a treaty may clash with domestic laws of the State. So what do countries do then? Can they violate the principle of ‘Pacta Sunt Servanda’ on the basis of their domestic laws? According to Article 46 and 52 of the Vienna Convention, that will not be taken as an excuse and the treaty is still required to be followed. 

Article 27 states that “A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty. This rule is without prejudice to article 46”. Part two of the article further elaborates that ‘an act is a violation of it is evident to the State that such an act would go against the normal practice and good faith.’

But Article 52 of the Vienna Convention safeguards States from Article 46 by stating that a treaty is void if its clauses have been “procured by the threat or use of force in violation of the principles of international law embodied in the Charter of the United Nations”. Thus, if such clauses of the treaty that violate the domestic laws have been established through force, then such a treaty will not be valid.

Criticisms of use Of Pacta Sunt Servanda- Case Law 

Nuclear Test Case, Aust v France

The Nuclear Test case, that was a case between Australia and France is still a great source of anger and agitation between south pacific nations of Australia and New Zealand as a result of atrocious environmental vandalism by the republic of France.

From the 1960s, the conducting tests of Nuclear weapons began at Mururoa Atoll in the South Pacific. From 1966 to the early 1970s, this included atmospheric testing. Australia and New Zealand argued that such practices resulted in radioactive particles spreading throughout the world. In order to stop the testing, they applied to the International Court of Justice. The french counter-argued that the court lacked jurisdiction. They also published a public statement that they no longer needed atmospheric testing. 

Australia and New Zealand were not satisfied with the public statement as nothing stopped France from changing their minds and continuing atmospheric nuclear testing.

The International Court of Justice denied their second appeal saying that the French declaration has already achieved what Australia wanted, that is an end to nuclear testing.

On the question of the reliability of the French statement, the court relied on the doctrine of Pacta Sunt Servanda (i.e Promises must be kept). They added on “Trust and confidence are inherent in international cooperation, in particular in an age when this cooperation in many fields is becoming increasingly essential”.

Just as the very rule of Pacta Sunt Servanda in the laws of treaties is based on good faith, so also is the binding character of an international obligation assumed by unilateral declaration.

“Thus interested States may take cognizance of unilateral declarations and place confidence in them and are entitled to require that the obligation thus created should be respected.”

In the end, the French did stop the atmospheric testing but they continued underground testing as long as 1996 causing extreme harm to the geology of Australia.

Conclusion

In this article, we had discussed what is the principle of Pacta Sunt Servanda. We also discussed its history and saw that this principle has deep roots in ancient history. 

Before going deep into the scope and application, we discussed what a treaty is and what is a valid and an invalid treaty. 

We then discussed the various laws around it such as The General principle of Law which is a source of international law, The Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations and Article 26 of the Vienna Convention. 

We also discussed the scope of the principle and established that states who are bound by such a principle must have given their consent in order to be a part of such a treaty. 

We even discussed the various laws involved when exercising Pacta Sunt Servanda such as Article 18, 27 and 46 of the Vienna Convention. We also addressed the question of whether states are bound to follow treaties which violate their domestic laws. 

Lastly, we saw how the principle of Pacta Sunt Servanda can be misused through the case of Australia vs France.

References

Lukashuk, I. I. “The Principle Pacta Sunt Servanda and the Nature of Obligation Under International Law.” The American Journal of International Law, vol. 83, no. 3, 1989, pp. 513–518. 

https://www.academia.edu/39357308/What_Does_Pacta_Sunt_Servanda_Mean_in_Public_  International_Law

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This article has been written by Deyasini Chakrabarti from KIIT School of Law, Odisha. This article mostly talks about the principle of Pacta Tertiis Nec Nocent Nec Prosunt and various exceptions related to it along with a few cases.

Introduction

The very word society is the mixture of two words that are ‘socius’ and ‘logos’ which means ‘the science of society’. Thus, Auguste Comte, commonly known as the ‘Father of Sociology’ had defined sociology as the “Queen of all the sciences” as it is dealing with the most unpredictable subjects that are human beings, therefore it deals with the basics of all sciences and as a result occupies the top position at the hierarchy of sciences. Hence, the science of society could be deducted as positivist in nature as it is based on observation, experiments, comparisons, and conclusions. Thus, a society comprises individuals, business, economy, trust, finance, politics and lastly power. Therefore the foundation of society is the contract and when the parties agree to the agreement it becomes a binding contract on the parties only and not to some other third party, thus giving rise to the concept of “Pacta Tertiis Nec Nocent Nec Prosunt”.

Meaning and explanation: Pacta Tertiis Nec Nocent Nec Prosunt

The phrase “Pacta Tertiis Nec Nocent Nec Prosunt” is a Latin usage of words which means that a treaty binds the parties and only the parties. Thus, it states that the binding power of a treaty is limited only to the consenting party. Such a treaty that is binding only upon the consenting parties does not create either obligations or rights for third parties with/without their consent.This concept has also been highlighted under Article 34 of the Vienna Convention of the Law Of Treaties 1969. Thus the duties and rights are only enforceable between the contracting parties and there could be no imposition or implementation of these pre-decided rights and duties on the third parties. Therefore, the contracting parties should only remain concerned about their terms and conditions and no third party should interfere in it. Thus, it can be interpreted that the above mentioned maxim strictly follows the policy of non-interference on the third parties or any outsiders until their consent comes to the play.

Exception to the above maxim 

The treaties are to be meant only for the contracting parties, however, there is an exception to it. The Vienna Convention on The Law of Treaties 1969 also provides for a few exceptions. For example, when a car is sold from the seller to the buyer, the right which arises is not only the right in personam (i.e. a personal right attached to a specific person) but at the same time, the owner of the car also has the right to drive the car safely after following and obeying all the traffic rules, thus it is also giving rise to right in rem (i.e the right available against the entire world). Similarly, when a person develops a new scientific invention, at that time it is the duty of the society not to steal his ideas, rather encourage him in the field of research and development, and that’s why the concept of the patent had developed world wide now for creations involving scientific inventions. Thus, there is always a right and duty towards society as a whole. The exceptions in this regard are namely Article 35, 36, 37 and 38 of the Vienna Convention on the Law of Treaties, 1969.

Article 35

• Article 35 of the said convention states about the treaties providing for obligations on the third parties. An obligation emerges for a third State from an arrangement of a treaty if the parties to the treaty intend to accept those arrangements or provisions of the treaty as an instrument to establish the obligation on the third party.
• Provided that the third party also explicitly acknowledges the obligation which would further be intimated in writing to the initial two consenting parties. 
•  Thus when the third party is mindfully accepting the said terms and conditions in writing of an agreement entered into by the other two consenting parties, then it automatically puts an obligation on itself even when it is not the part of the consenting parties.

Article 36

• Article 36 of the Vienna Convention on The Law of Treaties 1969 is also an exception to Pacta Tertiis Nec Nocent Nec Prosunt. Article 36 talks about the treaties which also provide rights to third parties.
• It highlights on the fact that a privilege emerges for a third State from an arrangement of a settlement if the parties to the treaty expect the arrangement to accord that privilege either to the third State, or to a group of States to which it belongs, or to all States, and if the third State consents thereto.
• However, the third parties approval will be assumed as long as contrary or clashing intention arises, except if the treaty in any case provides otherwise.It further adds that a State practising a right which is in accordance with paragraph 1 of Article 36 of the said convention, should conform to the conditions for its activity accommodated in the treaty or set up in conformity with the arrangement.

Article 37

• Article 37 of the Vienna Convention on The Law of Treaties is also being regarded as an exception to Pacta Tertiis Nec Nocent Nec Prosunt. Article 37 focuses on denial or alteration of commitments or rights of third parties.
• It states that at the point when a commitment has emerged for a third State in congruity with Article 35, the commitment may be disavowed or adjusted distinctly with the assent of the consenting parties to the settlement and of the third party, except if it is built up that they had in any case otherwise agreed.
• Thus, an obligation could be modified by the consenting parties along with the third party if they agree to do so unless it was otherwise agreed to act contrary. However, in the case of revocation or modification of rights, the idea is not so liberal. It states that at the point when a right has emerged for a third State in similarity with Article 36, the privilege may not be repudiated or changed by the parties in the event that it is built up that the right was proposed not to be revocable or subject to alteration without the assent of the third State.
• Therefore, it highlights on the fact of equal protection of rights and obligations of the two initial consenting parties as well as the third party.Thus if a third party is being involved in a treaty then its consent, its obligation, its rights, everything matters, as a result of which it cannot be terminated and modified as per the whims and fancies of the consenting parties. In other words, we can say that Article 37 is protecting the rights and obligations of the third parties arising out of the treaty entered into by the consenting parties.

Article 38

• Article 38 is also considered as an important exception to the concept that the treaty is binding only to the consenting parties but not the third party. It states the rules in the treaty which becomes binding on the third party through international customs. It states that nothing in Articles 34 to 37 prevents a standard set out in a treaty from getting authoritative upon a third State as a customary rule of international law, perceived thus. 
• Therefore, it highlights the importance of the traditional practices or the established unseen norms of the society that are meant to be followed even though they had not been written down anywhere.

Third Party’s Involvement Due To Humanitarian Intervention

Thus, it brings back the memory down the history lane of the India Pakistan War of 1971 when Pakistan was divided into West Pakistan (which was dominated mostly by the Urdu speaking Punjabi elites) and East Pakistan (which was mostly dominated by the Bengali elites). In December 1970, when Pakistan held free and fair elections in both its wings, a crisis situation was created as a result. The Bengalis of East Pakistan voted for a moderate Bengali nationalist party, the Awami League, which won the majority and assumed responsibility for the two wings of the nation. General Agha Muhammad Yahya Khan, the military tyrant and the President of Pakistan went into constitutional negotiations, which drove the situation to a political stalemate. Therefore the only solution which could be found out by General Yahya Khan was to launch a devastating military crackdown on the Bengalis across East Pakistan. Thus, the process of torturing and massacring the Bengalis of East Pakistan began, which led to hundreds and thousands of deaths, and some ten million refugees fled into neighboring India. The then Indian Prime Minister, Indira Gandhi decided to intervene and protect the people of East Pakistan which gradually led to the formation of Bangladesh.

Therefore with this incident, though there was no sort of treaty involved; nevertheless it could be highlighted that initially the war or aggression started between East Pakistan and West Pakistan and India was nowhere a party to it. However, on humanitarian grounds, India brought a right and an obligation on itself just to protect the people at large. Thus it is not always necessary that one has to be a part of any incident or event, rather sometimes through some circumstances or situations, the third party plays a greater role on the grounds of humanity, thus leading us to the concept of humanitarian intervention.

Cases Related to the Maxim Of Pacta Tertiis Nec Nocent Nec Prosunt

North Sea Continental Shelf Case

The statute of the North Sea Continental Shelf Cases sets out the double prerequisite for the development of International law i.e the State practice (the objective component) and opinio Juris (the subjective component).

Facts of the case

Netherlands and Denmark had drawn partial boundary lines dependent on the equidistance principle. A concurrence on further prolongation of the limit demonstrated troublesome in light of the fact that Denmark and Netherlands needed this prolongation to occur depending on the equidistance standard whereas Germany was of the view that, together, these two limits would create an unjust outcome for her. Germany expressed that because of its sunken coastline, such a line would bring about her losing out on a lot of the continental shelf dependent on proportionality to the length of its North Sea coastline. The Court needed to choose the principles and rules of worldwide law relevant to this delimitation. In doing as such, the Court needed to choose if the principles embraced by the parties were binding on the parties either through treaty law or customary international law.

Question of law

Regardless of whether Germany was under a legal obligation to acknowledge the equidistance-extraordinary conditions principle, contained in Article 6 of the Geneva Convention on the Continental Shelf of 1958, either as a customary international rule or as based on the Geneva Convention?

The decision of the court

The Hon’ble court held that the utilization of the equidistance technique had not crystallized into customary law and the strategy was not mandatory as well as obligatory for the delimitation of the regions in the North Sea, as the Republic of Germany didn’t ratify the Convention, was identified with the present proceedings.

Relevant Findings of the Court

• The Court dismissed the principal contention. It said that only a ‘very consistent extremely predictable course of conduct with respect to a State would permit the Court to assume that the State had some way or another become bound by an arrangement (by a method other than in the proper way, for example: endorsement) when the State was ‘capable and qualified for’ acknowledging the duties in a proper way. The Court held that Germany had not unilaterally assumed commitment under the Convention. The Court likewise considered the way that regardless that even if Germany had ratified the treaty she had the alternative of going into a reservation on Article 6, after which that specific Article would never again be appropriate to Germany (in other words if one were to expect that Germany assumed to become a party to the Convention, it doesn’t interpret that it would have additionally attempted those commitments contained in Article 6).
• The Vienna Convention on the Law of Treaties of 1969 (VCLT), which came into power in 1980, talks about in more detail about arrangement commitments of third States (those States who are not gatherings to the bargain). It plainly stipulates that commitments emerge for third States from an arrangement of a settlement just if (1) the genuine parties to the treaty expected the arrangement to make commitments for third States, and (2) third State explicitly acknowledge those commitments or obligations recorded in writing (Article 35 of the VCLT). The VCLT was not in power when the Court pondered on this case.
• The Court held that the nearness of a condition of estoppel (which could be defined as a position that prevents someone from asserting realities that are in opposition to past cases or activities) has allowed Article 6 to get authoritative on Germany – in any case, the Court held that Germany’s action didn’t bolster a conflict for estoppel. The Court moreover held that the unimportant truth that Germany probably won’t have unequivocally fought the equidistance standard as contained in Article 6, isn’t sufficient to communicate that the guideline is as of now definitive upon it.

Therefore it was upheld that Germany had not acted in any manner that would incur certain restrictive rights and obligations on her. Thus the equidistance special circumstances rule was not binding on Germany in any way.

Convention on the Prevention and Punishment of the Crime of Genocide

What is Genocide?

Genocide, in simple terms means mass killing. If we want to think about the root cause of genocide, then it will always remain an unanswered question. A single thing that may be simple and normal to a single individual may be skeptical, pessimistic and complicated to another individual. Thus, we can also say that Hitler was biased, prejudicial and stigmatized towards the Jews, as a result, he found the solution to it that was commitiing genocide against the Jews. If one would like to see about the psychological thought process of Hitler then it would prima facie showcase Hitler’s psychic, xenophobic and biased attitude towards a particular group, community or people, and through this,we may conclude the root cause for the act of genocide. History has shown us a number of genocide cases such as Bosnia and Herzegovina v Serbia and Montenegro, and therefore the history continues. Thus the Convention gives a statutory basis to the crimes of genocide which affects the society at large.

Article 1 of the Convention defines Genocide as slaughtering individuals from a particular group, causing genuine real or mental damage to individuals from the gathering, deliberately incurring on the group states of life determined to realize its physical demolition in entire or to a limited extent; imposing estimates proposed to forestall births inside the gathering, forcibly moving offspring of the group to another group.

The case of Bosnia & Herzegovina v. Serbia & Montenegro

The war was an effect of the separation of Yugoslavia. Following the Slovenian and Croatian severances from the Socialist Federal Republic of Yugoslavia in 1991, the multi-ethnic Socialist Republic of Bosnia and Herzegovina–which was possessed by primarily Muslim Bosniaks (44 percent), Orthodox Serbs (32.5 percent) and Catholic Croats (17 percent)– passed a submission for freedom on 29 February 1992. This was dismissed by the political delegates of the Bosnian Serbs, who had boycotted the submission.

Following Bosnia and Herzegovina’s affirmation of autonomy (which increased worldwide acknowledgment) and following the withdrawal of Alija Izetbegović from the recently marked Cutileiro Plan (which proposed a division of Bosnia into ethnic cantons), the Bosnian Serbs, driven by Radovan Karadžić and bolstered by the Serbian legislature of Slobodan Milošević and the Yugoslav People’s Army (JNA), prepared their power inside Bosnia and Herzegovina so as to verify ethnic Serb domain, at that point the war before long spread over the nation, joined by ethnic cleansing. 

The contention was at first between the Yugoslav Army units in Bosnia which later changed into the Army of Republika Srpska (VRS) on the one side, and the Army of the Republic of Bosnia and Herzegovina (ARBiH) which was to a great extent made out of Bosniaks, and the Croat powers in the Croatian Defense Council (HVO) on the opposite side. Strains among Croats and Bosniaks expanded all throughout late 1992, bringing about the Croat–Bosniak War that started from 1992. The Bosnian War was described by harsh battles, aimless shelling of urban communities and towns, ethnic purifying and deliberate mass assault, for the most part executed by Serbs,and to a lesser degree, Croat and Bosniak powers. Events like the Siege of Sarajevo and the Srebrenica slaughter later got notorious for the contention. 

The Serbs, albeit at first militarily better due to the weapons and assets given by the JNA, inevitably lost force as the Bosniaks and Croats aligned themselves against the Republika Srpska in 1994 with the production of the Federation of Bosnia and Herzegovina following Washington’s understanding. Pakistan opposed the UN’s restriction on the supply of arms and transported rockets to the Bosnian Muslims, while after the Srebrenica and Markale slaughters, NATO interceded in 1995 with Operation Deliberate Force focusing on the positions of the Army of the Republika Srpska, which was the key element in consummating the war. The war was finished after the marking of the General Framework Agreement for Peace in Bosnia and Herzegovina in Paris on 14 December 1995. Harmony dealings were held in Dayton, Ohio and were finished on 21 November 1995. 

Thus prevention of Genocide is a part of the Customary International law which has to be followed by the parties even if they are not specifically mentioning about their consent. Thus in my opinion it could be drawn as an exception to the maxim of pacta tertiis nec nocent nec prosunt. Thus genocide is not just being defined under the said convention but is also being defined under the Statute of the International Criminal Tribunal for Former Yugoslavia and many other statutes as well.

Thus this doesn’t provide an option for consent under the domestic law. Therefore as per the domestic law one has to follow the established municipal rules of the state. However in the international forum it gives the option of consent in it in the form of reservation. Therefore Genocide, being an inhuman and brutal crime which is being committed upon the society as a whole needs to be stopped regardless the concept of consent to it. 

Implication to the Reservations under the Convention on Prevention and Punishment of Genocide on the Genocide case

Fundamentally, the Convention sets upon State Parties the pledge to take measures to forestall and to punish the wrongdoing of genocide, including by building up important provisions and punishing the guilty parties. That commitment, despite the restriction not to commit genocide, had been considered as an untold principle of International Customary law; subsequently, it becomes binding on all States, paying little heed to the reality of whether they have approved the Genocide Convention or not.

What is a reservation under the Vienna Convention on the Law of Treaties?

As per Article 2(1)(d) of the Vienna Convention on the Law of Treaties 1969, “reservation” signifies a one-sided articulation, anyway expressed or named, made by a State, when marking, endorsing, tolerating, favoring or consenting to a treaty, whereby it implies to prohibit or to alter the legitimate impact of certain provisions of the treaty in their application to that State.

Hence when a State is satisfied with the majority terms of the treaty but is not happy about a few of the terms then in certain cases, the State may refuse to accept or be bound by the provision, while agreeing to the rest of the agreement.Thus the capacity to make reservation to an international treaty illustrates the principle of sovereignty.

• Thus, the general rule that became a universal standard is that the reservation could only be made with the consent of all the states who are involved in the treaty as a party. This was done to preserve the the unity of approach so as to ensure the fulfillment of the objective of the international agreement and also to minimize the diversion from the text of the treaty.
• The effect of it was that the State making a reservation had to obtain the consent of all the States. If the consent was not being given, then it would have to become a party to the original treaty or would not become a party at all. 
• However this watertight approach to the reservation was not agreed by the International Court of Justice in the Reservation to the Convention of the Genocide case. 

The US had put a reservation on the Convention on the Prevention and Punishment of the Crime of Genocide 1986, while ratifying the Convention. Thus if a party has put a reservation to any particular provision then it is not bound by it because it has not given its consent,therefore no obligation arises without the consent of the parties, hence it draws the link with the concept of Pacta tertiis Nec Nocent Nec Prosunt.

As per the Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide,in November 1950, the General Assembly asked the Court a progression of inquiries with regards to the situation of a State which connected reservations to its mark of the multilateral Convention on Genocide if different States, signatories of a similar Convention, protested these reservations. The Court considered, as it would in its Advisory Opinion of 28 May 1951, that, even if the Convention had no Article on the subject of reservation it didn’t follow that the reservations were restricted. The Court didn’t highlight the principle of integrity of the convention but pointed out to a variety of such specific or special circumstances with regard to the genocide convention. Such circumstances therefore included the universal character of the UN under whose guidance the convention had been concluded and the extensive participation that had happened under the convention as well. 

The inquiries which were enquired into are as per the following:

1. The reserving State be considered as a party to the Convention while as yet keeping up its reservation if the reservation is protested by at least one of the parties to the Convention, however not by others?
2. In the event that the response to Question I is in the positive, what is the impact of the reservation as between the reserving State and: (a) The parties which object to the reservation? (b) Those who acknowledge it?
3. What might be the legitimate impact as regards the response to Question I if an issue with a reservation is made: (a) By a signatory which has not yet sanctioned the reservation? (b) By a State qualified for a sign or acquiesce however which has not been yet done as such?

Therefore the Court held:

That a State which has made and kept up a reservation which has been protested by at least one or more parties to the Convention, however not by others, can be viewed just as involved with the Convention if the reservation is perfect with the purpose and object behind the Convention.

However in the Court’s opinion, the Court also gives liberty to the individual states to check the compatibility of the reservation as per their own individual determination. If a party to a Convention objects to the reservation then it may consider the reserving state as not being a party to the Convention. 

The 1969 Convention on The Law of Treaties also accepts the Court’s views and therefore provides statutory provisions for it namely,

• Article 19 of the said Convention states that reservations might be made when signing, confirming, approving, affirming or consenting to a treaty, however, they can’t be made where the reservation is denied by the treaty, or where the agreement or treaty gives that specific reservations might be made and these do exclude the reservation being referred to, or where the reservation is not consistent with the purpose and reason for the treaty.
• Consent plays an important role under Article 20(2) of the said Convention. However, Article 20(4) shows the general guidelines to be followed with respect to treaties not within the scope of Article 20(2) and not constituent instruments of international organisation. These are that: 

(a) acknowledgment by another contracting condition of a reservation comprises the reserving state involved with the treaty as a party according to that other state if or at the point when the treaty is in power for those states; 

(b) an objection by another contracting state to a reservation doesn’t prevent an entry into the power of the treaty as between the protesting and reserving states unless the contrary opinion is certainly communicated by the objecting state;

(c) a demonstration communicating a state’s consent to be bound by the treaty and containing a reservation is viable when in any event one other contracting state has acknowledged the reservation.

• Article 21 states that a reservation established in respect of the other party modifies for reserving state in relation with the other party, to the extent to which the reservation had been made. Article 21(3), however provides that when a state objects to the reservation but not the entry of the treaty into force then the provision to which the reservation relates between itself and the reserving party doesn’t apply to the extent of reservation. 

Therefore the Court’s Approach although is having some disadvantages but its objective was to increase the acceptance capacity and the scope of the treaties. 

Conclusion

Rights and duties are therefore supplementary and complementary to each other. The maxim Pacta Tertiis Nec Nocent Nec Prosunt though only makes the consenting parties binding to it, but not the third parties, however, in some cases we find the third party also becomes a part of the agreement entered into by the consenting parties. A treaty cannot create rights or obligations on third parties without its consent. Thus exceptions are always there, which are broadly mentioned under article 35, 36,37 and 38 of the Vienna Convention on The Law of Treaties. The objective of the formation of all the peace governing organizations and treaties is to provide a coordinating, smooth, negotiable environment among all the nations for the well-being of the society at large. Therefore a treaty though binding between the contracting consenting parties may it sometimes also creates an obligation, responsibility, and duty towards the society as a whole.

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This article is written by Team LawSikho.

Should a company have a dating policy for its employees? 

Do companies require changing the employment agreement if they send an employee on secondment?

Do you know the grounds on which differential remuneration can and cannot be paid under Indian law to employees?

How does an organization identify responsibilities of directors, occupiers, managers and other officers for key labour law violations?

Does your company have an organization-specific risk-minimization strategy in respect of labour law violations?

These are some of the most common questions which lawyers working in the area of labour law as well as the HR managers are faced with.

Employment law is extremely broad that covers various aspects of the relationships between employees and employers; and unions and employees etc. Compliance with labour and employment law has become one of the most important issues today that many companies in India have to deal with. Most of the rising employment disputes are resulting in litigation..

In India, labor and employment law firms provide mainly the following services:

• Trade unions and employment-related litigation.
• Disciplinary and departmental proceedings.
• Employment rights and related benefits.
• Constitutional rights and remedies.
• Employment and service contracts.
• Strikes and layouts, etc.

If you are a lawyer looking to diversify your practice in labour law or if you are a young law student looking to get into labour laws practice, going through this list will give you a fair idea about which are the top law firms you may want to work or associate with.

You will also understand the gaps in your current level of knowledge and the areas where you need to add new skills in your repertoire to succeed as a labour law lawyer or even get a well-paid job in this area of work.

And as always, we are available at LawSikho to help with your skill development journey.

There are no official rankings of the top law firms specializing in labour law. Please note that this list is only suggestive and reflects our research. The numbering sequence here does not reflect that one law firm is better than another.

So, let’s begin:

1. IndusLaw

IndusLaw’s employment law team advises the clients across all matters including litigation, transactional, etc. It assists the management of employment risk across all levels and they advise the client on employment-related and compliance issues, as well as day to day support for the human resource department and in-house counsels. 

They also advise employment agreements and policies, structuring of compensation and benefits, employment aspects of merger and takeover, etc. The Indus law labour and employment team consists of 6 partners, principal associate, 3 senior associates, and 4 associates. 

Key Clients:

Uber India, Honey well, Flipkart, metro cash and carry, Baxter pharmaceuticals, etc.

• They advise Heinz Craft India for the mediation proceedings before deputy labour commissioner, providing a solution for temporary workers.
• Represented the CFO of Infosys, Rajiv Bansal in arbitration proceedings for suspended payment.
• Advised Shell India for employees’ provident fund.
• Advised Shell India recommending that Uber Technologies procedure should be followed for giving compensation to senior management after they are terminated. 

Publications by Indus law in Labour and Employment law:

• The latest direction is given by Employees’ provident fund for inspection, establishment, and proceedings.
• Proposal to amend the employee provident fund and Miscellaneous Provisions Act, 1955.
• Publications of India and the Gig economy.
• Approval of code on wages by the Union Cabinet in 2019.
• Prohibition of sexual harassment by Maharastra Government and Telangana government for the establishment of Internal Committees.
• Publication on Gujarat shops and Establishment Act and also the Regulation of Employment and Service Act.
• Special allowance to befall within the meaning of basic wages.

2. Khaitan and Company

Khaitan and Company are one of the oldest and full-service provider law firms in India founded by Debi Prasad Khaitan in the year 1911. Khaitan and the company provide help in employee restructuring, labour law compliances, crisis responses, and equity-based restructuring. 

Abhimanyu Pal is a team stand out senior associate in Khaitan and company and Anshul Prakash is head of a team of labour and employment law. 

Key Clients:

The clients of Khaitan and company are Apax Partners, Conduent, Match Group, Innogy, Gates corporation and Aditya Birla and retail corporation.

Top advice by Khaitan and company are:

• Provides assistance to Housing Development Finance Corporation for their employment issues such as code and conduct of employment issues.
• Review and drafting of employment policies and employment and consultancy agreements.
• Transfer of its employees from HR services to the new entity.
• Advised Aditya Birla corporation on the structuring of employees and employee provident funds across the various states including West Bengal, New Delhi, etc.
• Defended Merks in a case filed by ex-employees for recovery of terminal dues.

Publications of Khaitan and company in labour and employment law

• Publication by Khaitan and company in the general labour market and litigation trends.
• Publication on general practice and restrictive covenants.
• Discrimination protection.
• Protection against dismissal.
• Employees policy and statutory employment protection.

3. Kochhar and Company

Kochhar and Company offer various services to the clients advising clients on various employment laws and regulations, preparation of labour law compliances, individual and collective bargaining, employee handbook and policies of human resources. 

The firm also advises multinational corporations for their branches in India with the most suitable human resources policies. 

Debjani Aich advises in compliance with the prevention of sexual harassment laws, internal policy reforms and Vijay Ravi advises clients regularly on misconduct allegations, internal allegations, and wrongful restraint. 

Key Clients:

The clients of Kochhar and company include Standards and Poor Global, One Plus, DS Smith, Ely Lilly, Parexel, etc.

Top advice by Kochhar and company are:

• Preferred employment counsel to S & P global.
• Provides assistance with the various employment contracts including daycare service agreements, settlement agreements, and employment services.
• Handling of consultation and sensitive employment terminations, separation as a result of the police investigation.
• Retained by OnePlus China to conduct comprehensive pan India due diligence to ensure employment law compliance.

Publication by Kochhar and Company:

• Special allowance under the Employment Provident Fund Act, 1952 needs to be special.
• The doctrine of a single economic entity and corporate separateness.
• The fear of the unknown.
• Requirement of continuous services under Industrial Dispute Act, 1947.
• The legal issue of termination of employment of probationary employees.
• Applicability of anti-sexual harassment policies.
• Harassment of women at the workplace.

4. Nishith Desai and Associates

Nishith Desai and Associates specialize in employment and labour practice. In India, employment law is based on the law made by the federal state, administrative as well as judicial decisions. The labour and employment law at the firm is headed by Vikram Schroff for large scale downsizing clients, regulatory compliances and employee stock option plan structuring. 

Key Clients:

The clients of Nishith Desai and associates are Aditya Birla groups, Advent International, Agami System, and ITP publishing, etc.

Top deals by Nishith Desai and associates

• It made labour law compliances easier in Bangalore.
• The injunction of the High Court against its sector employees.
• Increment of wage ceiling.

Publications by Nishith Desai and Associates:

• Construction workers benefit from social security.
• The state government has the best safety for women in the technology sector.
• India’s law on child labour law needs to be addressed properly.
• Labour law compliance to be made easily in Bangalore.
• Pension and retirement benefit 2013 publication.
• Business transfer and employee rights.
• India’s new law on the prohibition of sexual harassment at the workplace.
• Social security agreements in international taxation.

5. Trilegal 

Trilegal is India’s most leading law firm. In their practice of labour and employment law, Atul Gupta brings huge expertise to a large scale retrenchment. The team handles tribunal disputes and internal investigation, concerning confidentiality breaches, breach of restrictive covenants. 

Swarnima is a leading voice in me too campaign and provides training to employers across the country. Negotiation with the non-unionized workers in the manufacturing sector is also practiced by Trilegal. 

Key Clients:

The clients of Trilegal include Google, Vice Media, Intercontinental exchange, PayPal, Spotify etc.

Top advice by Trilegal:

• Provided assistance to Bytedance in establishing its operation in India from HR and employment point of view.
• Advised Bank of Baroda for employment and human resource policy with the triplicate merger with Dena Bank and Vijaya bank.
• Advised Accenture for notification issued by the Karnataka government on minimum wage notifications.
• Provided assistance to Pfizer in its proposal to frame organisational HR policies. 

Publications by Trilegal

• Publication on the government to bring into force the payment of gratuity.
• Publication on the effective benefit of maternity benefit.
• Recent changes in employment laws.
• Maternity benefits closer to reality and in force publications.

6. ALMT Legal

ALMT Legal’s employment team helps in advising clients with all practical and legal issues occurring due to the engagement of employees, directors and independent directors contract. ALMT legal also solves the problem arising out of employee and employer relationship. The lawyers of the ALMT legal offers services to international employers and senior executive services across different sectors of industry. 

Due to a change in labour and employment practice with the foreign employer and employee issues, more consideration is required with the contractual workforce with employer and employee relationship.

Nowadays it is important for the employer to give employee stock option plans and other benefits and incentives to employees, the ALMT legal provides the solution to organizations with such issues. The firm advises the client to adopt internationally accepted policies and procedures for all these systems. The employment law and practice include employment and service contracts, employment litigation, non-competition, tax laws, etc. 

Aliff Fazelboy leads the labour and employment law, Ehtesham Tavern is recognized for providing legal advice to clients India as well as across the world. Recent advice by ALMT legal includes working hours for working employees in the organization, prevention of sexual harassment, conciliation proceedings, etc.

Top advice by ALMT legal:

• Advised the global tax structure and employee stock option plan.
• Advised on various aspects of Indian employment law generally, termination of employment, termination and service contract, drafting terms and tax structuring laws.
• Advised a large number of global banks with their human resource policy.
• Advised a US financial product to set up a call center services across 6 locations of India and issue regarding the employment of women in the workplace.
• Advised software multinational corporations with respect to their termination, appointment and disciplinary proceedings.

7. AZB and Partners

AZB and Partners try to work with unique solutions to the client applicable according to laws. The AZB and partners are involved in drafting and reviewing contracts including non compete and non-solicitation clauses. The firm also provides training to managers and other employees for recent regulations. The firm also reviews and provides a handbook for employees with important regulations. One of the common things of business is the termination of employees just either for any reason or either the scheme of business. 

The firm also offers services to the employees in case of termination which has been given to the employees who are offered protection under central laws. It also advises on employment issues in case of merger or acquisition by way of share sale or business transfer, specialized labour council for voluntary and retirement scheme provides assistance in an investigation relating to sexual harassment at the workplace, handling allegations for senior employees. 

AZB and partners handle the issue of multinational companies’ clients arising because of culture, language, etc. Nohit Noorezadan and Sunilla Awasthi regularly advise clients regarding the internal investigation as well as an internal investigation, sexual misconduct, etc.. The firm also advises protection data privacy that is related to cybercrime happening due to employees misconduct. The clients of AZB and partners include Amazon Seller Services, Thomson Reuters, etc.

Top advice by AZB and Partners:

• Advised large e-commerce companies on various employment issues including compensation restructuring, maternity benefits and proceeding for defence, etc.
• Advised multinational banks in regulation of the banking industry, unit closure, and unique banking industry policy.
• Provided assistance to European Technology with company manufacturing operation in India with the investigation into the unethical practice and investigation and proper procedure for investigation as well as termination.
• Provides assistance regarding the child sexual abuse and women’s sexual harassment policy, the provision benefits, maternity benefits etc.
• Provides mass media companies in relation to compliance laws including remuneration, exit strategy, and termination, etc.

Publications by AZB and Partners:

• Publication on Employees Compensation Act, 1923.
• Publication on Code on Security Rule 2019.
• Drafting code on wage rules.
• Drafting code on social security.
• Publication on diversity and equality law.

8. Jyoti Sagar and Associates

Jyoti Sagar and Associates have a team of experienced employment law specialists who work with clients from a wide range of sectors to tackle the problem of employment issues across India. 

Lawyers of the Jyoti Sagar and Associates have wide experience of handling the case in the practically sensible employment-related problem. The lawyers have an extensive and practically related sensitive problem. 

JSA also offers employer training that they are meeting with compliance obligations, policy matters and employer and employee relationship, policy matters, employee disputes, etc.

They advise on conducting background and checks that the client work in compliance with workplace laws, the issue with directors from executive and non-executive, assuring employment, and labour aspect deal to minimize associated risks and ensure legal compliance, advising compliance and investigation, programme and policy, obtaining license and registration under contract law labour statue, advising on procedure for disciplinary inquiry, hiring, remuneration, taxes, and termination of employees, conducting employee audits to evaluate legal compliances, designing documentation, reviewing and operating all types of benefits and plans, advising on international employment issues with subject to remuneration, social security benefits, taxation issue also the Indian law applicable. 

Jyoti Sagar and Associates have a strong regulatory aspect related to employment and labour practices, regularly designing and making compliance-related to the problem related to handling the investigation of employee misconduct. 

Key Clients:

The clients of Jyoti Sagar and Associates include Sistema Shyam and Technologies, Mercer India consulting.

Top advice by Jyoti Sagar and Associates 

• Advised Mercer India consulting on its acquisition of Induslynk training services.
• Advised Semiconductor and Software solutions for the transfer of employees due to acquisition.
• Advised research and advisory company for an internal investigation of employees misconduct.
• Assisted an online marketplace and hospitality provider services with formulating and advising in anti-discriminatory laws. 
• Provided assistance with sexual misconduct by a senior director in a weighing equipment company.

Publication by Jyoti Sagar and Associates:

• The impact of #MeToo in corporate companies.
• The legal implication of #MeToo.
• Dealing with employment laws in the modern workplace.

9. Majumdar and Partners

Majumdar and Partners employment law practice include advising and drafting employee agreements, designing of Human resource policies, giving advice on retrenchment and termination of employees, contract labour laws and establishment of shops under Shops and Establishment Act, 1953 structuring stock option and employee benefit agreements and counselling of Indian companies under employment law. 

The head of labour and employment law is N Raja Sujit and Neerav Merchant and their practice include reviewing and implementing internal maternity benefits, people and disability act, drafting of non compete and non-solicitation agreements advising on minimum pay requirements.

Key Clients:

The clients of Majumdar and partners include International financial institutions, manufacturer and technologies companies. The key clients of Majumdar and partners include MBB labs, CRU group, 1 FB support services, Gallagher service centre, Gallup, etc. 

Top advice given by Majumdar and Partners 

• Advised MBB labs, the subsidiary of May Bank, on the review and finalisation of the employee handbook, offer letter and employee agreements and also advised in issue relating to the transfer and termination of employees.
• Advising 1 FB support services on termination of employees resulting from an information leak.
• Advised Tyco fire and security India for the transfer of employees on the corporate merger.
• Advised Gallup India on employment issues as well as a retrenchment of the transfer.
• Advised Gallager service centre on mandatory compliance centre for disabled employees under Indian employment laws.
• Advised united retirement plan consultant in compliance with Indian employees laws to be incorporated in India.
• Advised Solmax international corporation pacific for termination of employees of senior-level employees.
• Advised Chep South Africa employees on its transfer to the Chep India pacific employees.
• Advised Rofu ltd in connection with Indian employees and their impact on foreign exchange and Income Tax Laws.
• Advised H and R block on its Income and Tax laws issue in relation to the grant of Employee Stock option Plan.

Publication of Majumdar and Partners

• Publication on inequality in India, Part 1 and Part 2.
• On account of India’s employment and labour and market problems.
• Publication on dissecting India’s organised sector.
• Publication on the growth of employment and earnings in the tertiary sector.
• Publication on the labour market, trade patterns, and workers living standard.
• Reforms and employment elasticity in the organised sector.

10. Shardul Amarchand and Mangaldas

The labour and employment team of Shardul Amarchand and Mangaldas works closely with the firm’s tax professionals to assist multinational clients with employment structure, merger and acquisition transaction and employee benefits. 

Pooja Ramchandani, assists the regulatory compliances pertaining to minimum wage, age of retirement and working age, internal investigation, retrenchment, and employee transfer. The practice also includes wrongful termination and wrongful allegations, the transition of employees, integration of benefits and compensation, employee stock option plans and other incentive benefit schemes, contract labour analysis, breach of secrecy, non compete and non-solicitation obligations, HR policies, and key employment contracts.

Top advice by Shardul Amarchand and Mangaldas

The advice is given by Pooja Ramchandani in Shardul Amarchand and Mangaldas in employment law are:

• Advised KL gates on a general overview of applicable labour laws in India, the employment contract with senior personnel and consultants and requirements of human resources manual.
• Advised DSP Inc on retrenchment of employees after closing in the Indian subsidiary.
• Advised space software technology private limited to check the issue of employment from employment.
• She advised Ge group in the transfer of employees, retrenchment of employees and social security and other benefits.
• Advised Park Ohio Industries on termination of service of director.
• Gave advice to a united technology corporation for the issue of transfer of employees.
• Gave advice to Clayton UTZ in relation to employee contract.
• Advised American Corporation Bank on the transfer of employees.
• Advised Intel in relation to the issue of principles of natural justice.

Publication By Pooja Ramchandi for the labour and employment law

• Publication on regulating India’s gig economy.
• Publication on the rule of provident fund as directed by employee provident fund organisation.
• About the administration of employee provident fund organisation on an issue related to employee provident fund.
• Publication on to compete or non compete clause under employee agreements.
• Publication on rights of person and disabilities Act, 1995 and the role of private employees.
• Obligation regarding outbound employees for social security benefits.

11. Cyril Amarchand and Mangaldas

The dedicated team practice of Cyril Amarchand and Mangaldas helps multinational companies as well as local clients for their workforce. The employment practice group gives advice to employer organisations in India as well as foreign countries. 

The employment law advice given by clients includes employee benefits, non-competent arrangement, data protection, and sexual harassment, etc. The employment law practice includes employment aspects related to business and commercial transactions such as merger and acquisition, restructuring, joint venture, etc.

Click Above

Rashmi Pradeep, Ankita Roy, and Kaushalay Madhavan, are the key people in the labour and employment team of Cyril Amarchand and Mangaldas. Rashmi Pradeep is recognized as a chamber practitioner in labour and employment practice. The key clients of Cyril Amarchand and Mangaldas include Air India, the Boston consulting group, People Interactive, Sky Power group, Thomson Reuters India etc.

Top advice by Cyril Amarchand and Mangaldas

• Advised ExxonMobil services and technology in relation to compliance with the latest maternity benefit amendment act.
• Advised Air India as per the instruction of Air India to conduct a review of the regulatory framework governing more than 6000 employees for strategic disinvestment.
• Represented People Interactive in a matter concerning the misappropriation of employees of confidentiality of information by employees.
• Advised Bank of America Merrill Lynch for LGBT community program for its LGBT Employees.
• Advised Boston Consulting Group on employment matters such as maternity benefit, compliance with sexual harassment laws and terminations.

Publication of Cyril Amarchand and Mangaldas in labour and employment practice

• The hiring structure of employees in India and their applicability to the law.
• Publication on rights of a person with disabilities acts in 2016.
• Publication on non disclosure agreement in employment contract.
• Publication on the scope of sexual harassment by Indian Courts.
• Model bill of shops and establishment 2016.
• Publication on the legal regime for employees stock option plan.
• Analysis of amendments to the bonus act.

12. HSA Advocates

HSA advises several of its clients, including multinational clients on labour and employment law-related matters in India. The service and advice include advice and assistance in settlements, negotiating an employment contract, advising labour issues in merger and acquisition, structuring etc. HSA also advises clients on employment, labour and industrial issues. 

The advice includes terms of appointment and condition of services, transfer, layoff, retrenchment, discharge or disposal of employees, minimum wages, gender equality and other developing regulations.

The key people in labour and employment include Bhara Sharma, Gaurav Sahay, Jivesh Chandrayan and Soumya Kanti de Mallik. The key clients of HSA advocates include Terms A/S, HH global, procurement and creative production solutions, SREI infrastructure finance, Acme solar Holding India, etc.

Top advice by HSA Advocates

• Provides assistance to Avantor Performance materials India with reviewing employment contract, ESOP policy, senior employees remuneration terms, and various human resource policy.
• Advised Acme solar Holding for its modification in the Employee stock option plan.
• Advised Walson services in compliance with the Minimum wages act.
• Helps in the establishment of HR policies for aerospace company Terma.
• Advised for the issue regarding the transfer from Info Biz India to the new entity as part of an asset transfer.

Top publication by HSA Advocates

• Publication on code on wages bill 2019.
• HSA advocates provide legal updates in labour and employment law.

13. Phoenix legal

Labour and employment are one of the key practice areas of Phoenix Legal. Apart from advising on labour and employment issues, firm advice on merger and acquisition, business transfer, reorganization transaction.

It advises clients in the preparation of legal issues, structuring of compensation wages, drafting of employment contracts, non compete and confidentiality agreements, termination notices to negotiating collective bargaining contracts, advising on termination, retrenchment, layoffs, and strikes and seeking various and registration under various labour employment-related laws and regulation. 

The firm provides assistance to manufacturing companies employing a large number of factory workers covered by various labour/ employment-related statues as well as companies in the service sector including software and BPO companies. The labour and employment practice at Phoenix legal offers advising services related to the policy audits, restructuring, internal investigation, regulatory compliance and drafting and reviewing of employment Contract. 

The firm’s corporate lawyer includes Manjula Chawla and Sawant Singh, Saket Shukla, Abhishek Saxena, etc. They advise on retrenchment issues and other employment issues arising out of merger and acquisition.

Top Advice by Phoenix Legal in Labour and employment law firm of India

• They advised Paypal India on conditions of employment for night employment shifts for women working in an office.
• They advised Deutsche Bank on the employment and labour issues resulting from the client selling to the global sales apex group for 170 billion dollars.
• They advised the Volaris group on the issue of transfer of employees when acquired by Nokia.
• Assisted Penumbra with the structuring of employees and consultancy agreements.
• Retained by Groupon to provide a range of employment advice such as overtime policy, immigration issues, POSH compliance, etc.

Top publication by Phoenix Legal

A code wage in the right direction.

14. Samvad and Partners

Samvad and Partners are concerned with the statutory compliance advice, structuring agreements including employment, termination, exit settlements agreements and appearing before courts and tribunals. The Samvad and Partners specialize in case of employee misconduct including harassment and differential treatment. The practice of employment and labour law firms is co-headed by Poornima Hatti with instruction involving stock option plan disputes, legislative developments, internal investigation and prevention of sexual harassment policy. Commercial partner Ashwini Vtallachar gives transactional advice. The key clients of Samvad and Partners are AnI technologies, GRNRM networks, JP Morgan, Dell global consumer products, etc.

Top advice by Samvad and Partners

• Advised terra blue corporation with the dispute between senior management and founder. 
• The issue regarding non competes for clause and other types of a clause in the employment contract.

Top publication by Samvad and Partners

• Publication on Anti sexual harassment policy.
• Sexual harassment policy and lunch of online complaint portal.
• Publication on Payment of Wages Act, 1936.
• Cost and fee allocation in civil procedure.
• Publication on Is sexual harassment at workplace preventing the growth of women.
• Publication on the recent amendment in employment provident scheme.

15. Singhania and Partners LLP

Singhania and Partner have a strong employment advisory which advises on workforce retrenchment and restructuring, C-suite level termination, internal investigation, HR policy review, corporate transactional suite, designing and implementing sexual harassment policy. The labour and employment team also advises on the issues facing the overseas and Indian companies regarding employment contracts. The employment lawyer team of Singhania and Partners represent the dispute between management and employment issues. They also advised on an issue related to sexual harassment policy laws, constitution, and management of internal complaint committee in an internal investigation. 

Key Clients

The clients of Singhania and partners include Standard and Poor Global, Pixel India, Semtech Advance India etc.

Top advice by Singhania and Partners

• Advised Standard and Poor Global with a full suite of employment mandates such as retrenchment, Human Resource policy, training for sexual harassment policy.
• Assisted the American Bureau of shipping with the preparation of their human resource policy, prevention of sexual harassment policy and employee handbook.
• Advised Value Momentum Software Services on termination, setting up and many more issues etc.
• Conducted training sessions of Thyme Software Services in compliance with the sexual harassment policy.

Top publication by Singhania and Partners LLP

• Contributions made by employees for social security schemes are not taxable.
• The supreme court forges to decide employee and employer relationship in Balwant rai vs Air India ltd case.
• Publication on acquisition transaction and labour laws in India.

16. LexCounsel, Law Offices

LexCounsel believes that India has the largest workforce available at salaries, the availability of talent in India gives encouragement to foreign investors to invest in India and gives employment to Indian educated at a lower cost. 

There has been a debate for harmonizing and rationalizing to improve foreign investment and business climate. For the benefit of cost, the advantage one has to be careful with the compliance laws in India. The lex counsel advises on employment retainer and consultancy contracts, settlement of employment dues, collective bargaining and trade unions, etc.  Dimpy Mohanti is the practice head for the labour and employment law team.

Top advice by Lex Counsel

• Provides full scope labour policy to CPA global India.
• Advised publisher Flaggates on large scale redundancy services.
• Advised Flesimmin hard with senior separation agreements.
• Advised Macmillan for various state laws specific.

17. Link legal

Link legal advice includes a full range of employment services across all sectors including aviation, manufacturing, infrastructure, real estate, oil, gas, etc. With depth knowledge about employment law, Link Legal gives advice to multinational corporations to different types of business across employment litigation, industrial settlement and industrial problem etc. Atul Sharma and Milanka Chaudhary are the key people here.

18. Singh and Associates

Manoj Kumar associates advised the number of clients with their matter for foreign employees entering into the Indian Workforce. The team also advises clients with the domestic Human Resource policy and employment contract. The key clients of Singh and associates include DWF, Microsoft, Clinic pace worldwide, etc.

Top advice by Singh and Associates

• Advised Russula automation and engineering for their Human Resource Policy.
• Advised ZTE telecom sector for the Indian employee’s workforce.

We would like to thank Abhishek Dubey for the research,

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The post Which are the Best Labour and Employment Law Firms in India appeared first on iPleaders.

This article is written by M Anulekha, a student from Damodaram Sanjivayya National Law University, pursuing B.A LLB. In this article, the author discusses the Intellectual Property Rights role in Economic Development and what’s the need for the protection of Intellectual Property Rights.

Introduction

Intellectual Property (IP) manages any fundamental development of human insight, for example, creative, scholarly, specialized or logical development. Intellectual Property Rights (IPR) gives the legitimate rights to the creator to verify their creation. These legitimate rights give a restrictive right on the creator/producer or its administrator who utilizes it’s his development/item for a constrained time frame.

As it were, we can say that the lawful rights deny all others from utilizing the Intellectual Property for business purposes without the earlier ascent of the IP rights holder. IP rights incorporate prized formulas, utility models, licenses, trademarks, geological signs, mechanical structure, format structure of coordinated circuits, copyright, and related rights, and new assortments of plants. It is very much settled that IP assumes a significant job in the cutting edge economy.

There are numerous kinds of licensed innovation assurance. A patent is an acknowledgment for a creation that fulfills the criteria of worldwide development, and mechanical application. IPR is fundamental for better distinguishing proof, arranging, commercialization, rendering, and along these lines the protection of developments or imagination. Every industry ought to build up its claim to fame dependent on its IPR approaches, the board style, methodologies, etc. As of now, the pharmaceutical business has a developing IPR procedure, which needs better concentration and standpoint in the coming time.

IPR is a solid instrument, to ensure the venture, time, cash, and exertion contributed by the innovator/maker of the IP, as it gives the designer/maker a selective ideal for a specific timeframe for the utilization of its development/creation. Subsequently, IPR influences the financial improvement of a nation by advancing solid challenges and empowering mechanical development and monetary development. The present audit introduces a concise depiction of IPR with specific accentuation on pharmaceuticals.

History of Intellectual Property Rights

Intellectual Property (IP) protection has a long history. For the United Kingdom, one can follow its impressions path back from the fourteenth century, the United States’ seventeenth Century and Japan’s eighteenth Century. 600 years back the leader of the UK perceived scholarly creation and its significance of assurance. Appropriately, we can likewise outline the monetary quality of these nations. All the majority of the created countries have clear licensed innovation law and a decent authorization framework to ensure the rights. Indeed, even these nations have separate courts to deal with IP related issues for speeding up change. China began late in IP. The principal patent was recorded in 1984 (according to our discoveries), however, they moved quickly. China and India both marked global IP bargains in a similar period. During the underlying days, the IP requirement was not viable in Mainland China. This was utilized beneficially by the neighborhood producers to build their monetary quality and for an extension.

Meaning of Intellectual Property Rights

Intellectual Property rights refer to the general term for the task of property rights through licenses, copyrights, and trademarks. These property rights permit the holder to practice a monopoly on the utilization of the thing for a predetermined period.

Licensed innovation can be characterized as creations of the brain, developments, scholarly and imaginative work, images, names and pictures utilized in business. The target of licensed innovation assurance is to support the imagination of the human mind to serve all and to guarantee that the advantages emerging from abusing a creation advantage the maker. This will empower imaginative action and give financial specialists a sensible profit for their interest in innovative work.

IP engages people, ventures, or different substances to prohibit others from the utilization of their manifestations. Protected innovation engages people, endeavors, or different substances to reject others from the utilization of their manifestations without their assent.

As per Article 2 of the WIPO (World Intellectual Property Organization)– Central Organization for the insurance of Intellectual Property Laws and the master association of the UN, “Intellectual Property will incorporate the rights identifying with abstract, creative and logical works, developments in all fields of human undertaking, logical disclosures, modern structures, trademarks, administration imprints, and business names and assignments, assurance against uncalled for rivalry, and the various rights coming about because of scholarly movement in the mechanical, logical, artistic or logical fields.”

Scope of Intellectual Property Rights

The extent of IP rights is wide; two arrangement modes are utilized to decide if IP is copyright or Industrial Property. Mechanical properties incorporate licenses or innovations, trademarks, trade names, biodiversity, plant breeding rights, and other business interests. A patent gives its holder the select option to utilize the Intellectual Property for the reasons for bringing in cash from the innovation.

Innovation is itself another creation, procedure, machine or production. Having copyright doesn’t give you the select right to thought, however, it secures the statement of thoughts that are not quite the same as a patent. Copyright covers numerous fields, from workmanship and writing to logical works and programming.

Indeed, even music and broad media works are secured by copyright laws. The span of copyright insurance exists 60 years after the passing of the maker. At the end of the day, a writer’s book is copyrighted for as long as he can remember and afterward 60 years after his passing. In contrast to patent laws, there is no prerequisite of the regulatory procedure in copyright laws.

A trademark is an identification of starting point. It is a particular sign used to make the wellspring of merchandise and enterprises open according to products and ventures and to recognize merchandise and ventures from different substances. This sets up a connection between the owner and the item. It depicts the nature and nature of an item. The fundamental capacity of a trademark is to show the starting point of the products to which it is joined or according to which it is utilized. It recognizes the item, ensures quality and promotes the item. The trademark is additionally the target image of altruism that a business has made.

Geographical Indication is a name or sign utilized on specific items that relate to a geographic area or birthplace of the item, the utilization of topographical area may go about as a confirmation that the item has certain characteristics according to the conventional technique. Darjeeling tea and basmati rice are a typical case of topographical signs. The connection among items and spot turns out to be so notable that any reference to that spot is suggestive of products beginning there and the other way around.

Industrial Design is considered to be one of the forms of IPRs.It comprises the making of highlights of shape, arrangement, example, ornamentation or organization of lines or hues applied to any article in a few-dimensional structure or blend of at least one highlights. Plan assurance manages the external appearance of an article, including design, lines, hues, shape, surface, and materials. It might comprise three-dimensional highlights, for example, hues, shapes, and state of an article or two-dimensional highlights, for example, shapes or surface surfaces or different mixes.

Another assortment of plant reproducers is secured by the State. To be qualified for plant decent variety assurance, assorted variety must be novel, unmistakable and like existing assortments and its fundamental attributes under the Plant Protection and Protection Act, 2001 ought to be uniform and stable.

What is the need for protection of Intellectual property rights?

There are a few purposes behind advancing and ensuring protected innovation. Some of them are: Progress and the benefit of mankind stay in the capacity to make and design new works in the field of innovation and culture. IP insurance supports production, dispersion, and divulgence of the creation to the general population, as opposed to staying quiet about it. Advancement and security of licensed innovation advance monetary advancement create new openings and businesses and improves personal satisfaction. Licensed innovation helps in adjusting between the pioneer’s advantages and open intrigue, giving a situation where advancement, imagination, and development can prosper and profit all.

Economic Benefits of Intellectual Property Rights

The subject of how Intellectual Property Rights influence the procedures of monetary improvement and its development is mind-blowing and dependent on different factors. In principle, more grounded frameworks for the insurance of licensed innovation could either improve or constrain monetary development. Eventually, the proof is rising that more grounded and increasingly certain licensed innovation law could well build the monetary development and cultivate advantageous change, along these lines improving formative possibilities, on the off chance that they are organized in a way that advances compelling and dynamic challenges.

As the worldwide assurance system reinforces because of Trade-Related Aspects of Intellectual Property Rights, various inquiries emerge about the effect on possibilities of financial development. For a ton of reasons, it is unimaginable to unhesitatingly say that the new system will raise monetary development and improve the advancement process. There are two significant reasons. First to start with, numerous factors influence the development of manners that can command the effect of TRIPS. Second, the monetary hypothesis brings up that licensed innovation rights could have a lot of consequences for development, some positive and some negative.

For any business to cut a specialty for itself, development has become the spine, particularly in the serious condition today. Development clears the way for the making of licensed innovation and utilizing this protected innovation gives your business a serious edge while additionally contributing enormously to its prosperity. Protected innovation is an important asset for every single business, particularly those contributing huge totals of cash towards innovative work so as to make one of a kind items and administrations.

To receive the financial rewards of IPR, organizations ought to proactively execute licensed innovation arrangements. This permits them to distinguish novel, one of a kind manifestations and furthermore increment their income. It is likewise essential to characterize the licensed innovation objectives plainly as it can assist organizations with accomplishing their business goals.

As business livelihoods develop, IP engineers can make techniques to ensure the special parts of their manifestations. Advancements can be additionally cultivated by investigating more up to date geologies. To accomplish this, organizations can go into authorizing bargains or potentially joint dares to produce novel arrangements that can fulfill the necessities of their objective clients.

Assessment of existing IPR

While talking about the business estimation of IPR, there is one thing that takes top-most need; organizations need to assess their current IP in order to decide if it coordinates their business destinations. At exactly that point would they be able to gather the financial advantages of licensed innovation rights.

Assessment of the current IPR assists organizations with distinguishing new methods for utilizing their scholarly properties through permitting open doors as referenced previously. Organizations can likewise search for new roads and fields to extend the items on offer, which further prompts an expansion in their business income. It can likewise enable a brand to invade more up to date showcases; both locally and globally. 

Protection of Intellectual Property Rights and Economic Growth

The impacts of IPRs security on financial development have been broken down by various hypothetical writing, however, blended outcomes have been found. Much relies upon the suspicions about the exercises of impression and advancement in the Developing Countries.

The results of defective IPRs security on specialized advancement and monetary development by expecting that development happens just in the Northern Countries and impersonation just happens in the Southern Countries. As per these creators, blemished IPRs security energizes impersonation movement in the South. Then again, solid IPRs security could decrease the pace of impersonation. Because of the expanded trouble to copy, the span of restraining infrastructure benefits of the northern pioneer is longer, and this imposing business model position keeps going. The productivity of southern imitators decreases and the country’s heap of data won’t be fortified. The beneficial outcome is that specialized advancement is animated to the degree that the northern firm enhances to make due under the weight of minimal effort southern imitators. The negative impact is because of the vanishing of the lease of the trend-setter from the minute the assortment of an item is imitated.

However, expecting conjunction of impersonation and innovation in developing countries, show that the financial impacts of IPRs security fluctuate as per the degree of monetary improvement. Intellectual property Rights protection helps to reduce the risk of infringement of the invention. These impacts rise and afterward decay with salary. Consequently, the connection between the less-built up nations’ IPRs insurance and financial improvement is U-molded. This suggests a nation’s eagerness to fortify its IPRs security first reductions and afterward increments with its pay.

Conclusion

Economic theory exhibits that IPR could play either a positive or negative job in cultivating development and improvement. The restricted proof accessible proposes that the relationship is certain, however reliant on different variables that help advance advantages from licensed innovation assurance. To sum things up, Intellectual Property Rights could be compelling and advertise based components for conquering issues that exist in business sectors for data creation and scattering. Be that as it may, their reality could present issues as far as their potential for costs and anticompetitive maltreatment.

As needs are, present-day Intellectual Property Rights frameworks are not adequate without anyone else to energize compelling innovation progress. Rather, they should frame some portion of an intelligent and wide arrangement of correlative approaches that boost the potential for IPRS to raise dynamic challenges. Such approaches incorporate fortifying human capital and aptitude procurement, advancing adaptability in a big business association, guaranteeing a solid level of rivalry on residential markets, and building up a straightforward, unbiased, and compelling challenge system. So for the development of countries and Economic growth, intellectual property rights play a vital role.

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This article is written by Amber Tickoo.

This article will contrast the burden of proof under Section 138 of the Negotiable Instruments Act in a cheque bounce case with the burden of proof under a civil recovery suit. In doing so, we will analyse case laws under both criminal and civil law categories. The primary focus in a cheque bounce case under criminal proceeding will be M.S. Narayana Menon v. State of Kerala and Anr. To analyse the burden of proof under civil recovery suits, two cases will be primarily looked at- Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal and Robert A. Heflin v. Revathi Ramachandran.

Burden of proof under Section 138 proceedings of criminal law

Under Section 139 of the Negotiable Instruments Act, it is presumed that the holder of the cheque received the same in discharge of any debt of liability, in whole or in part. Therefore, a prima facie reading of the section will reveal that a presumption in favour of the complainant is drawn. Even under Section 118(a), there is a presumption that every negotiable instrument made shall be presumed to be drawn for consideration. However, the presumptions drawn under both the provisions are rebuttable in nature. But the question to be asked is what would be the standard of proof for rebutting such a presumption and precedent says that what is needed is to raise a ‘probable defence’.

The court very clearly in M.S Narayana Menon has explained this to mean that the standard of proof for the defendant is preponderance of probabilities and that it is not necessary for the defendant to rely on direct evidence. Inference can be drawn from the materials on record, including the evidence adduced by the plaintiff and also by reference to the circumstances relied on. Therefore, the initial onus of proof to be discharged is that of the accused. But this also does not mean that he/she is required to disprove the case of the prosecution. While the initial burden is on the accused, after producing convincing rebuttal evidence, the presumption disappears and the burden shifts back to the complainant. 

The issue of bringing a civil case standard of proof in a criminal case was discussed in State (Delhi Admin.) v. Sanjay Gandhi where the court justified this logic by stating that whenever a statute raises a presumption of guilt then an accused has a right to rebut that presumption on a defence of preponderance of probabilities. Therefore, an accused under cheque bounce cases is not required to rebut the presumption under Section 139 read with Section 118(a) through the standard of beyond reasonable doubt. 

In M.S. Narayana Menon, the facts were that the accused used to carry out transactions in the Stock Exchange through the complainant and a sum was due to complainant in relation to the said transactions and the cheque issued was dishonoured due to insufficient funds. Court held that the accused was able to discharge the initial burden placed on him but the burden thereafter shifted to the complainant to prove the case. He failed to do so here as he did not produce his books of accounts which would have proved the transaction. Thus the adverse inference drawn against him. 

The standard of proof to rebut the statutory presumption under Section 139 has been reiterated in Rangappa v. Sri Mohan to be that of preponderance of probabilities. 

In the case of Vishnu Dutt Sharma v. Daya Sapra, the court while dealing with the question of whether a criminal proceeding under Section 138 will affect the civil recovery suit proceeding said that the standard of proof in both cases will be very different because in a criminal proceeding the principles of fairness applicable are different and hence statute will be construed strictly. It stated that an accused who discharges the burden of proof placed on him under a statute needs to examine himself. He can discharge the same by relying on the materials already brought on records.Court took note of the fact that the statute mandates raising of presumption but does not explain how the same should be rebutted. It further stated that “reverse burden introduced by Section 139 has to delicately balanced, which would depend on the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same.”

In the case of Kalyani Baskar v. M.S. Sampoornam, the facts were that the accused had made an application to send the cheque for expert opinion to ascertain the genuineness of the signature of the accused but the Magistrate dismissed the application. But the Supreme Court held that declining to send the cheque for examination by handwriting expert meant a denial of the opportunity to the accused to rebut the presumption under Section 139 which amounted to denying a right to a fair trial. 

Logic before M.S. Narayana Menon

However, before M.S. Narayana Menon, it was the logic of Hiten P. Dalal v. Bratindranath Banerjee that guided the courts in examining whether the accused had discharged the burden of proof in cheque bounce cases. This case relied on an earlier case to draw a distinction between ‘discretionary presumption’ and ‘mandatory presumption’ to state that the latter cannot be merely rebutted by showing that the explanation offered by the accused is a reasonable and probable one. What is additionally required to be shown is that the explanation is a true one by directly establishing its existence. Therefore, in the choice between a ‘bare explanation which is plausible’ v. direct evidence, the court chose the latter and was then being applied by the courts is assessing whether the burden of proof under Section 139 had been discharged. 

Lets see how this was applied by the courts: In Yogendra Bhagatram Sachdev v. State of Maharashtra and Anr, the facts were that it was agreed between the complainant and the accused that the complainant will transfer his shares to the accused and resign from the company and in consideration of the same, he should be paid the amount. The cheques of the said amount were issued and later dishonoured. The accused contended that there was no consideration as the shares of the company were in custody of financial institutions which had advanced financial assistance to the company. He produced letters on record to prove the same. The court here held that the accused had only relied on these letters to rebut the presumption under Section 139. He did not examine himself or any witnesses.It stated that the defendant had restricted his defence to the four documents (letters) to prove that the shares were not given to him by the complainant and the same were not in possession and were actually with the financial institutions.

The court held against defendant the fact that he did not lead any evidence apart from the letters and did not press for issuance of witness summons. It was deemed by the court that he gave up his defence. Hiten P. Dalal’s logic was used in the case to press for the need of establishing proof explanation. Therefore, a very strict requirement on the accused for discharging the burden under Section 139 was placed wherein preponderance of probabilities was not enough and direct evidence had to be lead. If this factual matrix had presented itself before the courts today in the post M.S. Narayanan era, the letters on record would have been enough for the accused to show on preponderance of probabilities that the cheque was not given for any consideration. Additionally examining witnesses or producing direct evidence would not have been essential. 

In another case decided by the Bombay High Court, the complainant had given a loan to the accused and cheques had been issued in order to repay the loan. Court held that one of the ways in which presumption under 138 could be rebutted was through cross-examination of the complainant in such a way that it would make it improbable that the cheque was issued in discharge of any debt or liability. The admissions that had been elicited in the cross-examination were considered sufficient to rebut the presumption, probablise his defence and prove the non-existence of a consideration.In this case, the complainant was not able to state in cross-examination when the sum was paid by him and whose money it was and he had been giving contradictory answers. 

Burden of proof under a civil recovery suit

A civil recovery suit is often initiated under Order 37 of the Civil Procedure Code. It deals with summary suits which is the best remedy in the hands of the plaintiff to who wants to institute a civil suit. There are mainly 2 classes of suits on which the order applies- 1) suits upon bills of exchange and promissory notes and (2) ‘suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest’, either in the form of a written contract or through an enactment. It has been well established through case law that a civil case is decided on balance of probabilities. While that remains the standard of proof for the second category of suits, the first category of recovery suits (upon BoE and promissory notes) will have a different standard of proof which will be governed by Section 118 of the Negotiable Instruments act. This is because such suits arise out of negotiable instruments and thus will be governed by the presumptions that are applicable to negotiable instruments under Section 118.  

Recovery suits arising out of Negotiable Instruments

Section 118 is quite similar to Section 139 which raises a statutory presumption regarding consideration in cheque dishonour cases. Section 118(a) states that ‘until anything to the contrary is proved, it shall be presumed that every negotiable instrument was drawn for consideration.’ 

In the case of Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal, the court held that this presumption under Section 118(a) is rebuttable in nature and and a probable defence can be raised to prove the non-existence of such consideration. It is adequate if the defence shows that the existence of such consideration is doubtful or improbable from the facts and circumstances of the case or the material on record. It does not need to lead direct evidence for rebutting such a presumption. This is the same as what was held by the court in M.S. Narayana Menon though under a criminal cheque-bounce case.

The facts in Bharat Barrel were that the parties had a transaction of import of steel drum sheets and the defendant agreed to import the same which the plaintiff accepted. It was conveyed to the defendant that unless a guarantee about timely delivery of goods could be made, a letter of credit would not be opened. Plaintiff then asked the defendant to execute a promissory note as collateral security to pay to the plaintiff in case he suffers due to any default on part of the defendant. The defendant had shown that there was no existence of consideration for the promissory note that he issued and thus was not enforceable on the defendant. But this did not convince the High Court. The court decided in favour of the plaintiff because it said that it was wrong on part of the High Court to first not accept the defendant’s evidence while disproving consideration of the promissory note but then at the same time shifted the onus of proof of legal presumption on the plaintiff.

Other recovery suits

When civil recovery suits are filed under Order 37 of the CPC then the burden is on the plaintiff to establish the case through preponderance of probabilities. In the case of Robert A. Heflin v. Revathi Ramachandran, the plaintiff and the defendant had entered into an agreement by which plaintiff would supply industrial diamond and the price would be paid by the defendants in a mutual open account. While some of the amount had been paid, a large amount remained and thus a civil suit for recovery of the outstanding amount was filed. The court said that the invoices relied on by the plaintiff which covered the transactions of the industrial diamond was not referred to in the plaint and were also not in the pre-suit notice and the replication statement Additionally, it was admitted by the plaintiff that there was no acknowledgement of the receipts of the diamonds by the defendants. The court also held that the truth of the invoices were required to be corroborated through some other evidence as well. 

To decide a civil suit on preponderance of probabilities, court has to take into account the pleadings and evidence on record of both sides.

Conclusion

The contrast and comparison between the above two scenarios can be briefly summarised as under. 

Criminal case of cheque bounce: 

• Initial burden- Defendant; standard- preponderance of probabilities.

Civil recovery suit: 

• Suits on negotiable instruments 

 Initial burden- Defendant; standard- preponderance of probabilities.

• Suits in discharge of debt or liquidated demand

Initial burden- Plaintiff; standard- preponderance of probabilities.

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This article is written by Prasam Jain, from Symbiosis Law School, Noida. This article deals with Protective Devices of Standard form Contract Under Indian Contract Act, 1872. 

Introduction

The liberalization policy initiated in 1991, has made trade and business much easier. More and more people are now involved in this process. As a result, to avoid inconvenience they are required to get involved in a contract. With the increased role of the secondary sector and tertiary sector like the insurance company, Railways, Highway authority, producer of various goods, etc. they have to enter into a large number of contacts with a large number of people. 

It becomes very difficult to negotiate with these many people with whom the contract was entered into. When it comes to the drafting of the contract, it becomes quite a tedious task to draft a contract for every individual. Therefore, to avoid this, the organizations keep printed forms of contract. These standardized contracts consist of a large number of terms and conditions in “fine print” which exempt liability under the contract.

Thus, it often becomes a contract where the parties have unequal bargaining powers. It becomes very tough for an individual to bargain with these organizations and the only option left with them is to accept the offer whether they like or dislike. This gives them a great opportunity to use their weakness and exclude their liability. When these abuses reach the Courts, the Court rules based on precedence established in L’Estrange v F Raucob Ltd.

Mrs L contracted with F Raucob Ltd. to buy a cigarette vending machine. She didn’t read the agreement and that agreement excluded all liability for any defects in the machine. The machine turned out to be a defective piece. The Court held that Mrs L was bound to read the contract and the defendant not bringing the exemption clause to the attention of the plaintiff doesn’t matter here as the contract was signed by the plaintiff in the absence of any fraud or misrepresentation.

Therefore, the individuals deserve to be protected against the possibility of exploitation immanent in the contracts. This is where the protective device comes into existence. They are as follows:-

• Reasonable Notice 
• The notice should be contemporaneous with contract
• Fundamental Breach of Contract 
• Liability in Tort 
• Unreasonable terms  
• Strict Construction 
• Liability towards the third party 

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Reasonable Notice

The person delivering a document must provide a reasonable notice mentioning requisite terms and conditions laid down in the contract to the acceptor. In any case, if not done, the terms would not be binding on the acceptor.

Let’s discuss a few cases to get a brighter look of this protective device. 

Henderson v. Stevenson

The plaintiff, in this case, bought a steamer ticket where on the front side, it was written: “Dublin to Whitehaven.” There were printed certain conditions on the backside of the card which left the company free from any liability concerning the loss, injury or delay to the passenger and his baggage on the steamer. The plaintiff didn’t put any effort to see the back part of the ticket as there was no mentioning of terms and conditions on the face regarding conditions on the backside.

The case was initiated when the plaintiff’s baggage was lost in the shipwreck due to the fault of servants. The House of Lords held that the plaintiff is entitled to recover the compensation in spite of the exemption clause. The Court finally stated that “Where a written document is presented to a party for acceptance, a sufficient notice shall be given of the presence of terms and conditions. Notice will be regarded as enough if it would have conveyed to the minds of people in general that the ticket contains conditions. “ 

Parker v. South Eastern Railway Company

In this case, the Southern Eastern Railway Station (SER), Parker paid and submitted his bag in the cloakroom. He received a ticket too. At the front side it was printed:” See Back, “and at the backside, there was a notice conveying that SER wouldn’t be held liable for any deposits valuing more than ten euros. The tickets received by Parker had the same message written on it clearly and distinctly on the backside.

The plaintiff bag was lost, and he claimed the full value of the bag, which was more than 10 euros. The Court held that even though the notice was explicitly mentioned on the ticket but a reasonable man can’t believe that notice contained conditions. The plaintiff thought that the ticket was merely a receipt of the money he paid. Therefore, he was awarded the full amount that he claimed.

Thornton v. Shoe Lane Parking Ltd.

In this case, Thornton went to a park in his car. The prices were displayed outside the car park. And a notice verbally expressed cars were parked at their owner’s jeopardy. Thornton parked his vehicle by vending a ticket. It was written in small writing that it was stated to be issued subject to conditions displayed on the premises. There was a pillar opposite to the machine where a notice said that the owners wouldn’t be held liable for any injury occurring on their premises.

Unfortunately, Thornton had an accident, and he claimed damages from Shoe Lane Parking. The Court held that the exclusion clause had not been included in the contract and SLP had not done enough to bring terms and conditions to his attention before the contract formation. Thornton accepted the initial offer when we drove in, but it was too late by then to incorporate further terms when he drove into the park. 

The notice should be contemporaneous with contract

 According to this doctrine, a party to a contract must give exemption from liability at the time of entering into a contract and not after that if it wants to do so. It also means that notice shall be given before or at the time entering into a contract. If there is no exemption clause mentioned in the contract then a subsequent notice regarding the exemption will come in action.

To understand this doctrine, let’s take a case.

Olley v. Marlborough Court Ltd.

Olley booked a room in the defendant’s hotel and paid in advance the charges for one week. She went to the room and saw a notice stating that the proprietors won’t be responsible for any items misplaced lost or stolen unless they have been given for safekeeping.

Before leaving the hotel, Olley locked her room and submitted her keys at the reception. When she came back, she saw that the key wasn’t there and many items were stolen from the room. Olley filed a suit against them for negligence and claimed damages. The Court ordered. Marlborough Court Ltd. to recover the damages caused to Olley. It was held that the exclusion clause was not included at the time of making the contract as the contract was concluded at reception. The notice claiming the exclusion of liability was not visible at the time the contract was concluded, but when the guest entered the bedroom.

Fundamental Breach of Contract

The doctrine of a fundamental breach of the contract states that when a person fails to perform the duty or delivers something else altogether that contract is then considered to not have been performed and puts an end to the contract in most cases. This doctrine is popularly used as a technique to control unfair exemption clauses. This doctrine has struck down several cases wherein a clause in the Contract limits or excludes the liability. For example- suppliers of goods and services. For a better understanding, let’s take a case illustration.

Alexander v. Railway Executive

The plaintiff deposited his baggage at the parcel office of a railway station and received a ticket after paying the ordinary charges. The ticket contained terms and conditions one of which exempted the Railway Executive from any liability arising from misdelivery or loss of any goods valuing more than five pounds unless a special charge was rewarded. The defendants permitted the friend of the defendant to take the luggage with him.

The plaintiff filed a suit against the defendants claiming reliance on exemption clause. The Court held that it was the duty of the executive to take care of the deposited goods and by permitting an unauthorized person to take the luggage away amounted to a fundamental breach of contract. Therefore, the exemption clause won’t protect them from liability.

Liability in Tort

Though an exemption clause is more than enough to exclude all kinds of liability but it may not exclude the liability of tort.

The doctrine can be understood with the help of a case.

White v. John Warrick and Company Ltd.

Tom white rented a cycle from John Warrick & Co. Ltd. The defendants agreed to maintain it in working order. There was a clause in the agreement which stated: “nothing in this agreement shall render the owners liable for any personal injuries”. While Tom was driving the cycle the saddle got tilted and he fell and got injured. The Court, in this case, held that John Warrick & Co. Ltd. can be exempted from their liability in the contract but can’t be exempted from liability in negligence.

Parties can also freely exclude liability for negligence by express words. In the case of Rutter v Palmer, the car was given to Palmer for sale under a contract which stated that while the cars are on a trial, the customer would drive at its own risk. There was an accident which took place while the car was on trial run. But the defendants were not held liable as they had already by express words shifted their liability to the customers.

Unreasonable terms

This is another protective device that aims to eliminate unreasonable terms from the contract. A term is considered as unreasonable if it opposes public policy or if it defeats the very purpose of the contract.

A case illustration would help us know more about this doctrine.

Lilly White vs R. Munuswami

Lilly White gave a new saree and a blouse to the defendant for dry cleaning. There was a condition mentioned in the laundry receipt that in case of loss of an article the customer would be qualified to claim only fifteen per cent of the market value. Unfortunately, the plaintiff’s saree vanished away. The plaintiff filed a suit against the defendants and the Court held that the terms are unenforceable as it opposes the public policy and violates the basic principles of contract.

Lord Denning justified the unenforceability in Lee(John) & Sons Ltd v Railway Executive by stating that “there is always the vigilance of the common law, which while allowing freedom of contract, watches to see that it is not abused.”

Strict Construction

While expressing exemption clauses, there should not be any ambiguity. If found any ambiguity, it will be resolved in favour of the weaker party i.e. the one who has wanted that clause to be added to the contract. Let’s look at a case illustration to understand this doctrine.

Hollier v Rambler Motors (AMC)

In five years, the plaintiff got its car repaired three to four times by Rambler Motors. Hollier signed a form that stated that the garage was free from any liability for damage caused in the premises due to fire, no less than two times. This time when he went to the garage for repairs, he had an oral agreement which consisted of what repairs were to be conducted. Hollier didn’t sign the form on this occasion. Consequently, his car got damaged by fire and he sued the defendants for negligence.

The Court held that three to four times in five years doesn’t mean that the exclusion clause had been imported into the oral agreement. And even if the clause was imported, the language was not so plain that it may free the defendants from liability. 

Liability towards the third party

The third-party has no rights or obligations and can’t suffer from any liability since it is not a party to a contract. This doctrine should also apply to standard form contracts. For example: In the case where the goods are supplied or services are rendered wherein the third party is injured by the utilization of them, the supplier is held liable in spite that he bought his exemption from the third party. 

Let’s have a look at a case illustration now.

Morris v CW Martin & Sons Ltd

Morris gave her fur garment to a furrier for cleaning. The furrier was not able to do the job and so he gave his garment to the defendant by taking the consent of the plaintiff. The garment was stolen by the defendant’s servant. As a result, the plaintiff sued the defendants. The case went to the Court and it was decided that the defendants are liable as exemption of any liability based on a mere agreement between parties doesn’t grant the third party exemption from liability.

Conclusion

The Standard Form Contracts are standardized contracts that contain an astronomically immense number of terms and conditions in fine print, which restrict and often omit liability under the contract. This gives a great opportunity to big organizations to exploit the impotence of the individual by imposing upon terms which often look akin to a kind of privacy legislation and even exempting the company from all liability under the contract. The battle against abuse has fallen to the Courts. The Courts have found it very arduous to come to the rescue of the more impotent party.

Due to this, the Courts have applied certain rules to bulwark the interest of the customer, as the case may be upon whom standard form contracts or exemption clauses are imposed like plausible notice should be given, notice should be contemporaneous with contract, theory of fundamental breach, contra proferentem interpretation of the contract, liability in tort, liability of the third parties, etc.

These modes, along with other Acts, avail the Courts in dealing with the quandary of Standard form Contract.

References

• https://www.lawteacher.net/cases/lestrange-v-graucob.php
• https://www.casemine.com/judgement/uk/5a8ff81c60d03e7f57eba3f7
• https://www.lawteacher.net/cases/parker-v-south-eastern-railway.php
• https://www.lawteacher.net/cases/thornton-v-shoe-lane.php
• https://www.lawteacher.net/cases/olley-v-marlborough-Court-hotel.php
• https://www.lawteacher.net/cases/alexander-v-north-eastern-railway.php
• https://www.lawteacher.net/cases/exclusion-clauses-cases.php
• https://www.lawteacher.net/cases/hollier-v-rambler-motors.php
• https://lawcasesummaries.com/knowledge-base/morris-v-cw-martin-sons-ltd-1966-1-qb-716

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This article is written by Shubhada Sonwalker.

Introduction 

Traditionally women in India were conditioned to stay at home, take care of the young while the men were considered the breadwinners. With access to education, better facilities, Increased literacy and the industrial revolution. Women all around the world left the boundaries of their homes and started working. Though women had been working always with their families on farms, as house help, even as babysitters from time immemorial. 

All these were considered secondary activities and were seldom recognised. Women worked without any rights and thus were frequently exploited.

The makers of the constitution recognised this problem and provided the right to equality to all. Irrespective of gender, caste, creed or social status. 

India’s Constitution aims at equality under Art.15 and provides for special laws to be made for the depressed classes and women. The status of women even today is not at par with their male counterparts. We certainly require laws which support women to take their rightful place in society. Gender specific laws in India are made to ensure equity between the genders. 

The Sexual Harassment of Women at Workplace Act, 2013 is a welcome addition amongst the class of such laws. It has received both widespread praise and flak in recent times. 

The research paper is aimed at analysing the effect that this law has had on society. 

It aims to seek answers to potent questions of whether the law has helped cement the place of women in society ? Have there been any ill Effects or not? 

Need 

In an emerging Indian Economy as more and more women started entering the workplace, the malady of sexual harassment has reared its ugly face into many fields. From police and the army to multinational companies to sports– it is regrettable that no field of human endeavour has been left untouched. There was a pressing need for legislation which could protect the rights of these working women. As has been the case with many laws the first time this was brought under the public eye was by judicial activism. 

Judicial Activism 

In the context of sexual harassment, judicial activism reached its pinnacle in Vishakha v. State of Rajasthan (Vishakha). The judgement was unprecedented for several reasons: the Supreme Court acknowledged and relied to a great extent on international treaties that had not been transformed into municipal law; the Supreme Court provided the first authoritative definition of ‘sexual harassment’ in India; and confronted with a statutory vacuum, it went creative and proposed the route of Judicial Legislation. 

Gang rape of Bhanwari Devi 

The incident that lead to a public interest litigation being (PIL) filed in respect of the Vishakha case was the gang rape of a social worker in Rajasthan. Bhanwari Devi was a satin, a grass-roots worker and activist, employed in the Women’s Development Project (WPD) of the government of Rajasthan. In 1992, the Rajasthan government launched a campaign against child marriages, in connection with which the WPD members persuaded villagers to abandon the practice, which is still rampant in Rajasthan. Bhanwari Devi made all possible efforts to prevent the marriage of a one year old girl, but in vain. What ensued for her was worse than a nightmare. There was a complete breakdown of institutional machinery in Rajasthan. The villagers harassed, threatened and socially boycotted Bhanwari Devi.

Then in September 1992, five villagers raped her in the presence of her husband. She sought justice, but faced innumerable hurdles from police authorities. The trial court even went ahead and acquitted the five accused.

This made five NGOs under the name ‘Vishakha’ to file PIL in the Supreme Court seeking detailed directions on how sexual harassment of women at workplace could be prevented using judicial activism.

Reference to international treaties while making the Vishakha Guidelines 

The Vishakha Guidelines served a great purpose as it immediately filled the void of lack of legislations in respect of Sexual Harassment of Women at Workplace. Till 2013 they were the only set of guidelines applicable across India that were specific to this issue. 

Due to them being passed by the Supreme Court and it acting as a court of record it was de facto applicable in the lower courts as well. But, to frame it was a task the three judge bench consisting of J.S Verma (then CJI), Sujata Manohar and B.N Kripal took cognisance of all the international treaties existing at that point. The Constitution of India does not have a precise stand on the value of international treaties that have been signed or ratified by the government, but not implemented via legislation. In ‘Vishakha, the court moved towards a more purposeful understanding of fundamental rights in tune with most of its recent interpretations by affirming that ‘any International Convention not inconsistent with the fundamental rights and in harmony with its spirit must be read into these provisions [The fundamental Rights] to promote the constitutional guarantee’.

Since there was no law relating to Sexual harassment at workplace, the court stated that it was free to rely on the Convention of Elimination of All Forms of Discrimination against Women (CEDAW– signed by India in 1980) in interpreting article-14,19 and 21 of the constitution. To justify the sources the court referred to several sources including the Beijing Statement of Principles of the Independence of Judiciary. A decision of the High Court of Australia and its own earlier decisions. Vishakha was also possibly the first instance in India where International Covenants had been applied to municipal and district level courts directly. Since Vishakha, The Supreme Court has started heavily relying on international Multilateral treaties, particularly those forming part of the Universal Declaration OF Human Rights (1948) and others forming part of International Bill of Rights due to legislative lethargy in spheres of public importance. Often filling legislative voids by exercise of Art 141. 

The Guidelines 

The Supreme Court issued a series of ‘guidelines’ (based on CEDAW) to protect women from sexual harassment at the workplace. These guidelines were to strictly observed in all workplaces (whether in the private or private sector) and would be binding and enforceable in law until suitable laws were made. 

The Supreme Court set out the following significant guidelines:

1. The employer and / or other responsible people in a workplace are duty-bound to prevent or deter sexual harassment and set up processes to resolve, settle or prosecute in such cases.
2. For the first time in India “sexual harassment was defined authoritatively”. The Supreme Court stated that it includes such unwelcome behaviour (whether directly or by implication) such as:physical contact and advances, a demand or request for sexual favours, sexually coloured remarks, showing pornography, and any other physical, verbal or non- verbal conduct of sexual nature. 
3. All employers or persons in charge of workplaces must strive to prevent sexual harassment and if any act amount to a specific offence under the Indian Penal Code 1860 or any other law, they must take appropriate action to punish the guilty.
4. Even if the act is not considered a legal offence or a breach of service rules, the employer should create appropriate mechanisms so that the complaint is addressed and redressed in a time bound manner.
5. This complaint mechanism must, if necessary, provide a complaints committee, a special counsellor or other support service, such as assured confidentiality. The complaints committee should be headed by a woman, at least half of the members should be women. Also, to pre-empt any undue influence from senior levels, the complaints committee must involve a third party (such as a NGO) familiar with the challenges of Sexual Harassment.
6. The employer must sensitise female employees to their rights and prominently notify the court’s guidelines.
7. Even if a third party is responsible for sexual harassment, the employer must take all steps necessary to support the victim.
8. The Central and State Governments should adopt suitable measures to ensure private sector employees implement these guidelines. 

Comparison with the Act 

Most of the guidelines have been adopted verbatim in the Prevention of Harassment of Women in workplace Act 2013.There have been no significant changes except for the clause of out of court settlement, but in this also there is no settlement in return of Money. This seems applicable on paper but its implementation is a big question. 

Also, In the Act, the woman has been allowed to take a leave from office for a period of 3 months from the date of the complaint being filed. While the Man has been asked to respond within the given timeframe while working in the office. The lady (presumably the victim) is allowed additional leave as and when she demands on top of the leaves that she was entitled to as the employee of the company that she is employed with. 

Developments After Vishakha 

A huge amount of cases have cropped up across high courts (and occasionally supreme court) with reference to the Vishakha Guidelines, these seek the establishment of complaints committees, dispute the constitution of complaints committees have already been in place, or challenge orders of dismissal based on the decisions of these committees. 

Apparel Export Promotion Council v A.K Chopra was the first case in 1999 where the supreme court found an opportunity to follow its judgement in Vishakha. The council Chairman was accused of sexually harassing the secretary; though he made repeated attempts. the chairman never actually molested her. On her complaint the employer was fired. On the basis of a writ petition filed by the employer the Delhi High Court took cognisance of the fact that he never actually molested her and did not make any actual physical contact. Thus concluding that he did not actually molest her. In an appeal filed by the council, the Supreme Court reversed the Delhi High Court Judgement, recognising that physical contact was not a prerequisite of Sexual Harassment, given the broad definition under Vishakha. It asserted that sexual harassment compromised the dignity of women and cannot be condoned. It asserted that sexual harassment compromised the dignity of women and cannot be condoned. In addition to the international sources referred in Vishakha, the court also cited the International Covenants on Economics, Social and Cultural Rights and the International Labour Organization’s seminar on combating sexual harassment at work.

The Supreme Court’s refreshingly progressive approach in Chopra marked a transition in the usual stance of Indian Courts. The apex court acknowledged that harassment transcends physical barriers and the effects of mental harassment can be equally damaging. And yet the court’s deep seated insensitivity to women’s issues does come up occasionally.

In DS Grewal v. Vimmi Joshi a colonel of the Indian Army made advances at and wrote inappropriate letters to the principal at an army school. The principal was apprehensive that if she objected to his conduct, he would create a hostile working environment and hinder her employment, including her promotion. Her fears did come true as her services were terminated. The Supreme Court ordered the school management to constitute a three- member complaints committee (as mandated by Vishakha Guidelines) to ascertain if there were any prima facie case against the army officer. If the committee found such a case, it would submit its reports to the army, which would then initiate disciplinary proceedings.

The court also affirmed that the school management was bound to bear the legal costs incurred by the principal (with counsel fee assessed at 50,000) for it had not complied with Vishakha Guidelines to begin with. In the absence of laws relating to sexual harassment Vishakha Guidelines were the only reliable source of action. It acted as a deterrent and ensured strict compliance was done with respect to its provisions. The mere idea of being prosecuted in such a grave issue invited much public ridicule. 

Courts emphasised on the strict compliance on the Vishakha Guidelines and have not viewed alternative mechanisms kindly. In a case where a public company appointed an advocate as an inquiry officer to investigate a complaint of sexual harassment, The Bombay High Court refused to accept the efficacy of the procedures followed and held that the complaints mechanism employed in Vishakha was mandatory.

The Vishakha Guidelines had been applied to almost all forms of formal employment even NGOs and Cooperative societies. As Kerala HC observed the ‘the quality of womanhood does not change by the place she works in be it public or private’.

In yet another shift of stance, The Madras HC held that even in the cases where the allegations of sexual harassment seemed baseless and seemed like an after thought, proper course would be to first refer the issue to the complaints committee. 

Vishakha was indeed the first legislation which defined harassment inclusively and covered all the behaviours which denied a person employment– related benefits due to rejection of sexual Demands (quid pro quo harassment) or creates a hostile work environment (without directly impacting on economic and other benefits).

Double Edged Sword: Instances of Use of the law as a means of Vengeance

Any measure which aims to protect the disadvantaged sections of the society or minorities is likely to be abused, and Vishakha is no different. In the case of Usha C.S v. Madras Refineries, The Madras High Court heard a complaint of sexual harassment made by the employee of Madras Refineries Ltd, a public sector undertaking. The employee alleged that she was denied her study leave with pay, salary and promotion because she rejected the advances of the general manager of her department. After examining the facts the court held that the employees allegations regarding her promotion and study–leave were baseless, as both decisions appeared to have been taken in accordance with the company policy. Further, the complaint committee had been properly constituted, but the employee had persistently delayed the inquiry, therefore, her allegations of sexual harassment were merely a weapon to bargain for a promotion and study leave and pay, contrary to company policy. Highlighting and condemning the misuse of the Supreme Court’s judgement in Vishakha, the court held:

“The employer, who is supposed to keep a vigilant eye on the victim and the delinquent, is not expected to allow the woman to use it as a shield so presented by the apex court as a means to seek vengeance. It is true that we are bound by the decisions of the apex court, but that does not mean that they can be allowed to interpret to suit the convenience of the woman like the petitioner, for personal gain.”

The court thereafter described Vishakha as a ‘double- edged weapon’. In keeping with other decisions on the subject, it affirmed that the court cannot assume that the court cannot assume that an allegation of harassment is correct unless it is first referred to a complaints committee. 

The bench urged the other courts to bear in mind the facts of each case individually, without assuming that the woman is a victim in each case. In fact in this particular case the appellant had a history of unwarranted leaves and absences. Such cases bring light to the anomaly of use of positive laws for harm to a person. Though a lot many researchers are of the view that since the false cases are only 4% or 5% of the whole of the cases filed according to NCRB data That these cases should be ignored and a bigger picture should be looked at. These laws indeed help the woman assert her position in society. 

But similar to Domestic Violence Cases and Dowry Harassment Laws there are a huge number of people who are threatened with false prosecution. Just like women find it difficult to accept and tell the people if she has experienced sexual assault. It is equally tough for a Man who has been falsely implicated to prove his innocence. 

As seen in the famous Rohtak Bravehearts Case, the media was quick to pounce on the story of two women mercilessly beating up their Molesters in a Haryana Intercity Bus, these Men were branded as Demons and were called all sorts of Names. They tried to assert their innocence but to no avail. They were portrayed as villains in the story. While the girls were catapulted to the status of Heroines even before the case went on trial. 

They (the Girls) were to be awarded by the Haryana Government for their bravery.

The case took two years to provide a conclusive judgement, the judgement shook everyone to the core in the judgement it was found that there was no harassment done by the three accused. All the evidence and witnesses said that the men had not given any inappropriate gestures or implications. After a thorough background check it was found that the family of the supposed victims (Aarti and Pooja) had the habit of borrowing money and then coercing the lenders to forgo the loans by threatening to file false complaints of Rape, Kidnapping and Molestation. 

While the matter was under trial the Boys (Kuldeep, Narayan, Mohit) had lost their chance to sit for the armed forces written exam as they were accused of such a controversial case. 

Two of them were forced to quit their education. Once the judgement came out all the boys demanded the court was to regain their respect.

Landmark Judgement

The Delhi High Court took cognisance of the false case of Sexual Harassment filed by women in one of its landmark judgements Anita Suresh v. Union of India in which Justice Midha granted exemplary damages to the respondent in the lieu of false Sexual harassment being filed against them. The court ordered the appellant Ms. Anita Suresh to pay 50,000 rupees to the respondents and the bar association of Delhi. 

This helped point out that being falsely implicated of such heinous crimes has a huge impact on the life of the accused as he may be innocent, but people start to consider him guilty beyond doubt. 

Changes in the sexual harassment of women at workplace (prevention prohibition and redressal) Act, 2013

The Act recognises the possibility of false prosecution and says that all the punishments which would have been applicable on the perpetrator had the accusation be proved would be conversely applicable on the plaintiff if she files a false case. 

Scope

The act is revolutionary in every sense but it has come under scrutiny because its narrow scope, exploitation of men though not a common practice in India. Is also not unheard of. 

But, One thing that the act definitely did was improve the status of the labour class or the housemaids whose rights were tough to protect even in the Vishakha guidelines, have been given proper redressal mechanisms so that their rights are also protected. 

Analysis

The implementation of the act has bought in both positive and negative changes in the society. First it has made workplaces more female friendly. People especially employers have become aware of their limits, duties and responsibility. In the corporate structure it has brought in a sense of security in the women. In the recent wave of METOO movements the people have become well aware of their boundaries. The act has provided women with a definitive forum for their issues to be heard.

However robust the act may seem there are still many women who are unaware of their rights. There are still many cases that are not registered due to shame or the undue influence of the perpetrator. Though out of court settlement does not permit the exchange of money against sexual harassment cases, many women who are vulnerable are still forced to accept the money and remain quiet. 

On the flip side are the women who have used the Act to meet their personal Vendetta and have changed the act from a shield to a sword. There are many cases where the accused has done no wrong but has to bear the brunt of the society due to a false case being filed. Men do not have any means to prove their innocence than to fight the case. But, the battle is half lost as the society considers him the culprit before the trial has even begun. And even if he is declared innocent the judgement arrives with relief which seems too little too late as the reputation of the family has already turned to ruins. 

Colin Kaepernick Effect

The false cases filed in the Act have been much publicised and have ruined the image of women in many workplaces. Also, with the onslaught of the METOO movement, each and every action is under scrutiny. According to many critics the normal balance of the workplace has been disrupted. One dire effect which this act might have is the non-hiring of capable and qualified women. 

As it is women’s participation across industries in negligible amounting to only 4% according to NCW data, women may find it difficult to get hired. As an employer may find it easier to hire a man with less expertise but also less complications. As in the case of a woman facing sexual harassment the employer has to bear the cost of the litigation as well as grant her leave up to three months in addition to the normal leave she was entitled to. All this adds to the cost.

Conclusion

We have certainly come a long way from having no mechanism for redressal available to a woman to a very potent and robust mechanism available for redressal. In depth view in the topic makes us realise that any law cannot be unidimensional. And a law as revolutionary as sexual Harassment of Women in Workplace has had huge social implications. What I feel is that this law is certainly a step in the right direction. What it requires is public awareness, sensitivity and robust implementation. I think when any incident happens people should not become judgemental against the woman or the man. The due process should be followed.

There should also be a Men’s Commission in place so that even men have the right to address their grievances in a systematic manner.

As the job of the Act is to bring equality not to suppress any gender. 

Bibliography

1. 10 Judgements that changed India
2.  Constitution Of India 
3. Avani Mehra Sood, PART 2 EQUALITY SOCIAL INCLUSION AND WOMENS RIGHTS: REDRESSING WOMENS RIGHTS VIOLATIONS THROUGH JUDICIARY. Jindal Global Law Review (vol.1)(2009)

Webliography

• SCC ONLINE 
• NCRB YEARLY REPORT 2016
• International Labor Organization Tripartite Regional Seminar on Combating Sexual harassment at work, Manila, November 1993 
• Rohtak Bravehearts the continuing story, Documentary by Deepika Narayan Bharadwaj 
• You tube/Rohtakbravehearts 
• Vox.com/ Colin Capernick / Nike

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This article has been written by Disha Mohanty of National Law University and Judicial Academy, Assam. State succession under Public International Law is one of the most interesting aspects of International Law and very relevant in the current world situation. This article attempts to explain the concept of state succession, the theories behind it and the repercussions of it.

Introduction 

State succession refers to the merging of two or more States. It is different from government succession in the sense that in government succession there’s a change of government whereas in State succession the State loses control over its partial or whole territory. Art 2(1)(b) of the Vienna Convention on the succession of States in respect of treaties in 1978 defines the term State succession as ‘the replacement of one State by another in the responsibility for the international relations of territory’.

In essence, it deals with the succession of one state with another and the transfer of rights and obligations. This concept has assumed greater importance since World War II owing to its effects on the legal obligations of the States. 

Circumstances of State Succession

State succession can arise in a number of defined circumstances, which mirror the ways in which political sovereignty may be acquired. They are: 

• Decolonization of all or part of an existing territorial unit: This refers to situations where the nation partially or completely overcomes itself from the holding of a superior nation.
• The dismemberment of an existing State: This refers to a situation when the territory of the predecessor State becomes the territory of two or more new States who take over it.
• Secession: This refers to a situation where a part of the State decides to withdraw from the existing State.
• Annexation: This refers to a situation where a State takes possession of another State.
• Merger: This refers to the fusion of two or more free States into a single free State.

Types of State Succession 

In each of these cases, a once-recognized entity disappears in whole or in part to be succeeded by some other authority, thus precipitating problems of transmission of rights and obligations. There are two types of State succession and they are discussed below:

Universal Succession

This is also referred to as Total Succession. When the entire identity of the parent State is destroyed and the old territory takes up the identity of the successor State, it is known as Universal Succession. This can happen in cases of:

• Merger
• Annexation 
• Subjugation

In certain cases of universal succession, the old State gets divided into multiple States. The dissolution of Czechoslovakia is an example of universal succession. The new States of the Czech Republic and Slovakia are both successor States. 

Partial Succession

Partial Succession occurs when a part of the territory of the State gets severed from the parent State. This severed part now becomes an independent State. This can occur when there is a civil war or a liberalization war. 

There are two important examples of partial succession.

• One is the separation of Pakistan from India.
• The other is the separation of Bangladesh from Pakistan.

The existing States continued with their legal obligations and duties while the new States got their own recognition and carried no rights or duties of the parent States.

Theories of State Succession

Universal Succession Theory

This is the oldest theory of succession propounded by Grotius, using the Roman analogy of succession on the death of any natural person. According to this theory, the rights and duties of the old State i.e., the predecessor State pass on to the new State i.e., the successor State upon succession without any exceptions and modifications. 

In fact, there are two justifications behind this theory. 

1. First that the State and the Sovereign gain all their power from God and a mere change in Government shouldn’t cause any change in the powers. 
2. Second, it is permanent and nothing can cause it to secede. 

The application of this theory can be seen in cases of fusion in the 20th century. The fusion of Syria and Egypt, Somali Land and Somalia, Tanganyika and Zanzibar are examples of this. However, this theory failed to get any attention from the majority of States from the world and has also been criticized by scholars from the world due to its Roman law analogy, a poor distinction between succession and internal change in governments, etc. 

Popular Continuity Theory

The Popular Continuity Theory can be described as another version of the Universal Succession theory that was propounded by Fiore and Fradier following the unification of the German and Italian nationals. According to this theory, the State has a 

• Political personality: It basically refers to the rights and obligations of the State towards the government. 
• Social personality: lt basically refers to the territory and the population of the State. 

Hence, upon succession, the political personality gets changed whereas the social personality remains intact. So, a State succession would not alter the rights and duties of the populace. 

However, this theory has not found its application in any country outside Europe and also has been criticised on the grounds that it functioned according to the municipal laws i.e, the local laws, which is why it was difficult to understand the effect of State succession using this theory. 

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Organic Substitution Theory

According to this theory, the rights and duties of the State continue even after succession by another State. Von Gierke had published a paper in 1882 regarding The execution of rights and obligations of a social body after its dissolution. It was from here that Max Huber derived his organic substitution theory. Huber drew the analogy that the problem of State succession was similar to that of dissolution of a social institution.

The factual element of the people and the territory have an organic bond i.e., the bond between the people and elements of State and upon succession by a new sovereign, the organic bond remains intact and only the juridical element changes. It offers a new explanation to the continuity of rights and duties i.e., the substitution of a successor State in the personality of its predecessor State. But, just like the other theories, this theory too has had no practical application and has been criticized for the same.

Self Abnegation Theory

This theory was propounded in 1900 by Jellinek and is another version of the universal theory of continuity. According to Jellinek, the successor State agrees to observe the rules of international law and performs the obligations towards other States created under them. Although, this theory considers that the performance of the international obligation, is merely ‘moral duty’ of the successor State, but at the same time it gives the right to the other States, to insist upon the successor State to perform the existing obligation. If the successor State refuses to accept, the other States may even withhold its recognition or make the recognition conditional upon the acceptance of the predecessor’s commitment towards them. 

Negative Theory

This theory was developed during the mid-19th and early 20th centuries. After World War II, the jurists of the Soviet Nations started emphasizing on the right of self-determination and on giving complete freedom to the States to maintain their international relations. According to this theory, the successor State doesn’t absorb the personality of the predecessor State in its political and economic interests. 

Upon succession, the new State is completely free of the obligations of the predecessor State. The successor State does not exercise its jurisdiction over the territory in virtue of a transfer of power from its predecessor but it has acquired the possibility of expanding its own sovereignty.

Communist Theory 

According to the Communist Theory of State Succession, a successor State is burdened by the economic and political commitments of the predecessor. Thus, this comes as something completely contrary to the Negative Theory of State Succession and unlike the Negative Theory, it doesn’t free the successor State from the obligations of the predecessor State. 

The Successor State is bound to adhere to the commitments of the predecessor State. Political commitments involve peace, war and territorial treaties and agreements while economic commitments include any amount of money borrowed or lent. All these have to be fulfilled by the new State.

Rights and Duties arising out of State Succession 

The laws regarding State succession are still in a very nascent stage and keeps evolving with the changing times. As seen above, along with the territorial and power transfers, there are transfers with regard to duties too. This section gives a brief idea about the transfer and non-transfer of political as well as non-political rights and duties.

Political Rights and Duties

• No succession takes place with regard to political rights and duties of the States. 
• The peace treaties or the treaties of neutrality entered into by the previous State aren’t binding on the new State. 
• But the only exception here is in case of human rights treaties since it would be desirable for the new State to adhere to such terms. 
• Other than this, the new State would have to enter into new political treaties of its own.

Rights of Natives or Local Rights

• Unlike the political rights and duties, the local rights of the people do not secede with the succession of the States. 
• These rights refer to the rights such as property rights, land rights or rights relating to railways, roads, water etc. 
• In cases like these, the succeeding States are bound by the duties, obligations and rights of the extinct State.  

Fiscal Debts (State or Public Debts)

• These refer to the financial obligations or debts of the predecessor State. The successor State is bound to pay back the debts of the predecessor State.
• This is because if the new State is enjoying the benefits of the loans, it becomes a moral obligation as well to pay back the money. 
• Next, if there is a split in the State then the entire debt amount gets divided between the predecessor and successor State in accordance with the territory and population of each. 

Effect of State Succession on Treaties

The law on State succession with regard to treaties has for a long time been dominated by two principles in general:

• One is the alleged principle of universal succession and 
• The other is the tabula rasa approach i.e., clean State doctrine not granting State succession to treaties. 

While the former principal keeps in mind, the interests of third States regarding upholding or not upholding treaties, the latter favours a rather strict understanding of sovereignty i.e., functions only according to the interests of the successor and predecessor State. Neither of the two principles can, however, offer a practical solution for various scenarios where State succession takes place. Accordingly, under customary international law more nuanced solutions have been developed in the past or, at the least, are in the process of being formed.

The Vienna Convention on State Succession provides that:

• In case of the border treaties, no such significant changes would be observed and the treaties would pass to the successor State.
• This is done keeping in mind the greater interests of the International Community. Similarly, other forms of local treaties related to land, territory, etc. would also pass on to the successor State upon succession. 
• Treaties relating to Human Rights are passed on to the successors with all their rights, duties and obligations. In the case of treaties relating to peace or neutrality, no succession takes place. 

Effect of State Succession on UN Membership 

When Pakistan was separated from India, it claimed itself to be a member of the United States since India was a member of the UN. The then Secretary-General of the UN had then brought up the following: 

• From the perspective of International Law, the circumstance is one in which part of the State breaks off from the original State.
• When Pakistan separated from India, there was no change in the status of India. India continued with all its treaties, rights and obligations.
• On the other hand, Pakistan didn’t have any of those rights or obligations and of course, had lost the UN Membership. 
• In International Law, the situation is similar to the separation of the Irish Free State from Britain, and Belgium from the Netherlands. In these cases, the portion which separated was considered a new State, and the remaining portion continued as an existing State with all the rights and duties which it had before. 

Thus, in the case of succession, the UN Membership doesn’t get transferred.

Conclusion

Given the current status of the law with regard to the idea of State succession, it can be very well inferred that the law needs a lot more evolution and clarity. Even though lately, it has been seen that there has been some consensus on certain levels and that succession doesn’t necessarily lead to disruption in all legal practices and methods there is a lot more work that needs to be done in this field.

References 

• https://shodhganga.inflibnet.ac.in/bitstream/10603/129013/14/07_chapter%202.pdf
• https://www.academia.edu/38091925/THE_State_SUCCESSION
• https://www.slideshare.net/KeshavChoudhary18/State-successionkinds-theories-consequences-of-State-succession
• https://lawnots.blogspot.com/2017/04/what-do-you-mean-by-state-succession.html
• https://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e1109
• https://legal.un.org/diplomaticconferences/1977_succession/
• http://www.legalserviceindia.com/articles/insu.htm
• https://legal.un.org/ilc/texts/instruments/english/conventions/3_2_1978.pdf

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This article is written by Abhinav Rana, from University School of Law and Legal Studies, GGSIPU Dwarka. This article deals with Credit Card Fraud.

Introduction

A credit card is a plastic card that represents the line of credit. It allows the cardholder to buy goods and services on credit based on the cardholder’s promise to pay back the money. Globalization and increased use of the internet for online shopping have led to excessive use of credit cards. It has a limit of a certain amount to the extent the owner can spend which is known as Credit Limit. At the end of the month, the owner can pay either the whole amount he owes or some proportion of the bill by the due date.

It allows you to buy anything of the high amount now and settle it later. It is a very flexible source of money. Also, it allows you to purchase even abroad without worrying about local currency as the credit cards are now spread worldwide. 

It is rightly said that something with a lot of benefits has its limitations too. Nowadays, credit card frauds are increasing rapidly. While many of us have never experienced credit card fraud, this happens every day. Credit card fraud means a transaction done with your account for which you didn’t authorize. It can be done when someone has stolen your credit card or also when that person has stolen your personal card details to make an unauthorized transaction without your card physically.

The person can also do so by installing a credit card skimmer to steal your account details. A credit card skimmer is a small tool that the person can install anywhere you swipe your card. So, preventive measures should be taken every time before using your card.

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Types of credit card fraud 

1. Application fraud

This type of fraud happens at the time of applying for a card. Some people issue cards in your name. They usually first steal your personal information and then use them as the supporting documents to open an account in your name. Banks can play a major role in minimizing this type of fraud by accepting the only original form of documents and ID proofs. They can also do so by confirming the identity of the owner through telephonic confirmation.

2. Electronic card imprints

The second kind of credit card fraud is done through stealing the card imprints. Someone skims the information placed on the credit card magnetic strip. Then this information is used to make fake cards.

3. CNP (card not present) fraud

If someone knows the details of your card they can easily commit CNP fraud against you. Details like account number and expiry date are enough to make international payments. Although most of the companies make it essential to enter the PIN of the card. But there are chances if a person knows your card number he/she might know your PIN too. 

 4. Counterfeit card fraud

Counterfeit card fraud is a form of fraud which is most commonly done through skimming. In this, a small fake magnetic tool holds up your card. Afterwards, this strip is used to make a fake card. It is an exact copy of your card which the fraudulent can swipe anywhere to purchase the goods. Prevention should be taken before putting your card in the machine. Always check the chip reader in which you insert your card, try to pull it outwards if it comes out directly report to the guard and the nearest police station. 

5. Lost and stolen card

This type of fraud is committed when your credit card is out of your possession i.e been stolen or lost. Now it is easy for frauds to make payments through your card. Although it will not be possible at machines as it requires a PIN number of the card. But online payments can be made through the cards without the requirement of a PIN number. 

6. Mail not receipt card fraud

It simply means “card never arrived fraud”. This means your card has never reached you after being dispatched from the bank. This can happen when you applied for a new credit card or replacement of an older one. Now the fraudulent can make use of your card for his own purposes. 

What to do if you’re a victim?

It’s important to monitor all your credit card accounts regularly, which will keep you updated because this type of fraud can happen even when your card is safely present in your wallet. In 2015, global credit, debit and prepaid card fraud amounted to $21.84 billion in losses, according to the Nilson report. Keeping the consumer informed about what they can do if they are stuck up in a situation is a crucial measure which has been evolved in this new era of cybercrime.

Always remember to keep a track on each and every transaction relating to your account and if any unauthorised transaction is seen or any transaction not done by you is done in your account report it to the bank and police immediately. 

1. Practice vigilance

First, you should try to protect yourself and safeguard your details from being scammed or at least set yourself up with the proper tools to detect a scam early on. Vigilance is key. Mark Hamrick said. “One painless strategy is to download your bank’s mobile apps that help us keep track of all credit and debit card transactions,” Hamrick said, adding that you should avoid third-party apps. Set up mobile alerts for your transactions. 

2. Inform the card issuer

Immediately inform the card issuer, the moment you come to know that a transaction has been made on your credit card. It is generally advisable that one should inform the bank maximum within 3 days. It is also essential that the victim should lodge a formal complaint with the bank and ask them to block the card so that further unauthorized transactions could be prevented. But, before filing a written complaint, one should have the following documents with him/her-

• Bank statement of the concerned bank. 
• Keep your ID and address proof as shown in the bank records.
• Make FIR under Section 154 Code of Criminal Procedure, 1973 and give a copy of FIR to the bank also. 

The banks and police both play an active role and immediately take action to track the unauthorised transaction and also, in America under the guidelines of federal trade commission you are not liable for the transactions you didn’t authorise. 

3. Change your passwords and PINs

To prevent fraudsters from doing any further damage, you can request the bank to allow you to change your password or PIN.

4. Closely monitor account activity

Next, you can keep an eye on the activities of the account and can check its status regularly. But if you notice some signs of fraud, you must notify the bank immediately.

5. Contact the credit bureaus and FTC

Creditcards.com recommends that if you are a victim of identity theft and someone is using your personal details as his own to commit fraud then you need to alert the credit bureaus and place a complaint as ‘Fraud Alert’, on your credit reports before informing the bank. “Fraud alerts will be very beneficial to you as it will prevent the fraud doer to open a new bank account in your name. 

How to prevent credit card fraud?

1. Read the account statement carefully

 When your account summary arrives at your place don’t just pay the amount stated in it. Instead, first, read and analyze the statement carefully and if any transaction is done which is not in your knowledge inform the bank instantly. Even better to always check your transactions online and don’t wait for the statement to arrive.

2. Always remember to log out 

Whenever you log in to your account, don’t leave your account open and remember to log out every time you use it.

3. Don’t fall for phone call scams

 You may receive calls from fraud people saying they are from your card provider and ask for your account details. Remember, the banks never ask for your account details.

4. Check your credit report

Always check your credit report which contains all the loans in your name. New loans may be taken by thieves in your name. If any new loan has been taken then contact your bank instantly.

5. Beware of a phishing scam

People may receive emails from thieves pretending themselves to be from television services, or any other internet site asking your account details for continuation of the services. Don’t fall for such scams they are run by hackers to steal your account information.

6. Report lost of card

If your card has been lost or stolen inform the bank immediately and also visit a nearby police station to make an FIR. After this, the bank will block your account and now the thief cannot make any transaction anymore.

7. Go paperless

Access your account statement online and stop receiving the paper statement. This will reduce the chances of thieves receiving the paper which contains your account details.

8. Check the encryption software 

Before entering your account details on a site, make sure you check the encryption software it uses.

9. Make a strong password

Keep your password strong and safe. Do not share it with anyone else.

Laws and Punishment 

Section 66C and 66D of IT ACT, 2000 and also the provision of section 468/471 IPC,1860 may be attracted to whoever tries to commit credit card fraud. 

Section 66C IT Act, 2000 

Section 66C says “Whoever tries to make use of any electronic password fraudulently or dishonestly shall be punished with imprisonment up to three years and a fine up to one lakh rupees.”

Section 66D IT Act, 2000 

Section 66D says “Whoever by any device tries to do cheating by personation shall be punished with imprisonment up to three years and a fine up to one lakh rupees”

Section 468 of IPC

Section 468 says “Whoever commits forgery for the purpose of cheating shall be punished with imprisonment up to seven years and shall also be liable to fine.”

Section 471

Section 471 says “Whoever  by fraudulently or dishonestly uses a document which he knows to be false shall be punished with the same punishment as if he has forged such document.”

 If anyone’s credit card has been lost/stolen and someone makes any transactions he’ll be liable under these sections. The person has to file an FIR in the nearby police station. The evidence, in this case, would be the account statement. Rest of the evidence like the IP address of the fraud doer will be collected by the police in its investigation. The bank has the log details of the credit card transactions which help the police in its investigation. Based on the log details (IP address), it would trace the criminals.

Conclusion

Credit card fraud is an act done with dishonest intention. In India, these frauds have become more prevalent from 2010. This is due to the reason that there’s a lack of awareness in some states and also, among some banks. But there are different measures for detecting and preventing credit card fraud, some of them are as follows-

• Expertise: The responsibilities on the members of the team of managing the infrastructure, handling the verification, analysing the transactions etc, have been increased and they are required to ensure that the technology is well managed or not.
• Collaboration: The whole industry is to work in collaboration so as to prevent fraud. 
• Biometrics: This is the most recent technology to prevent credit card frauds. It records unique characteristics of the cardholder like fingerprints, voice, signature and other biological components so that the computer can read it.

Hence, some anti-fraud strategies can be adopted by the banks to prevent the unauthorized use of credit cards and to avoid banks from great losses and reduce risk.

References

• https://devgan.in/ipc/chapter_18.php#s471
• https://indiankanoon.org/doc/1569253/
• https://economictimes.indiatimes.com/wealth/spend/how-to-report-a-net-banking-debit-or-credit-card-fraud/articleshow/66967421.cms?from=mdr
• https://economictimes.indiatimes.com/wealth/spend/how-to-report-a-net-banking-debit-or-credit-card-fraud/articleshow/66967421.cms?from=mdr
• https://newsroom.mastercard.com/asia-pacific/2014/10/28/8-different-types-card-fraud/
• https://brex.com/learn/fraud-security/who-is-liable-credit-card-fraud/
• https://www.nerdwallet.com/blog/credit-cards/credit-card-theft-fraud-serious-crime-penalty/
• https://www.creditcards.com/credit-card-news/privacy-security-suite-tips.php

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This article is written by Kunal Jain, pursuing BBA.LLB from Symbiosis Law School, Noida. This article deals with the difference between Damnum Sine Injuria and Injuria Sine Damnum.

Introduction

The law of torts is a collection of all the circumstances in which court gives a remedy by way of damages, for legally unjustified harm or injury done by one to another person. There are three elements which need to be proved before constituting a tort:-

1. There must be an act or omission on the part of the defendant.
2. That act or omission should be in violation of a legal right vested in the plaintiff.
3. The wrongful act or omission thus done by the defendant is of such a nature to give rise to a legal remedy.

Both the maxims are divided into three parts as follows:-

• Damnum/Damno means substantial harm, loss or damage with respect to the money, health, etc.
• Injuria means an infringement of a right given by the law to the plaintiff.
• Sine means without.

These 2 maxims fall under the category of qualified rights, & in the cases of qualified rights there is no presumption of damages and the violation of such rights is actionable only on the proof of damages.

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Damnum Sine Injuria

Damnum sine Injuria is a legal maxim which refers to as damages without injury or damages in which there is no infringement of any legal right which are vested with the plaintiff. Since no legal right has been infringed so no action lies in the cases of damnum sine injuria.  The general principle on which this maxim is based upon is that if one exercises his common or ordinary rights, within reasonable limits, and without infringing other’s legal right; such an exercise does not give rise to an action in tort in favour of that other person. Damages can be in any form either in the form of any substantial harm or loss suffered from respect to the money, comfort, health, etc. 

It is an implied principle in law that there are no remedies for any moral wrongs, unless and until any legal right has been infringed. Even if the act or omission such done by the defendant was intentional, the Court will not grant any damages to the plaintiff. As was cited in the case of Mayor & Co. of Bradford vs. Pickles (1895) in which the corporation of Bradford filed a suit against the defendant alleging that the act of defendant by digging a well in the adjoining land owned by the defendant has cut the underground supply of water in the corporation’s well hence causing them monetary losses since there was no adequate supply of water to discharge for the people living under the jurisdiction of the corporation. It was held that the defendant is not liable since they had not violated any legal right of the plaintiff. 

In another case of Gloucester Grammar School (1410) in which a schoolmaster, set-up a rival school to that of the plaintiff and since because of the competition the plaintiff had to reduce their fees from 40 pence to 12 pence per quarter. Thus claimed for compensation from the defendants for the losses suffered. It was held that the plaintiff had no remedy for the losses suffered, since the act though morally wrong has not violated any legal right of the plaintiff.

The court presumes in cases where the legal right has been infringed that damages have to be awarded,  but in cases where no legal right has been infringed, the maxim Damnum sine Injuria applies & no remedies are available for the same. So, it can be rightly said that an act which is lawfully or legally done, without negligence, & in the exercise of a legal right, such damages as comes to another thereby is damage without injury.

Injuria Sine Damno

Injuria sine damno is a violation of a legal right without causing any harm, loss or damage to the plaintiff and whenever any legal right is infringed, the person in whom the right is vested is entitled to bring an action. Every person has an absolute right to his property, to the immunity of his person, and to his liberty & infringement of this right is actionable per se. A person against whom the legal right has been infringed has a cause of action such that even a violation of any legal right knowingly brings the cause of action. The law even gives the liberty that if a person merely has a threat of infringement of a legal right even without the injury being completed, the person whose right has been threatened can bring a suit under the provisions of Specific Relief Act under Declaration and injunction.

For Example:- If a person is wrongfully detained against his will, he will have a claim for substantial damages for wrongful imprisonment even if no consequential loss was suffered pon the detention. 

As was cited in the case of Ashby Vs. White (1703) wherein the plaintiff was a qualified voter at the parliamentary elections which were held at that point of time. The defendant, a returning officer wrongfully refused to take the plaintiff’s vote. The plaintiff suffered no damage since the candidate which he wished to vote already won the elections but still, the defendants were held liable. It was concluded that damage is not merely pecuniary but injury imports a damage, so when a man is hindered of his rights he is entitled to remedies.

Injuria sine Damno is even applicable in the cases of trespass as was observed in the case of Sain Das Vs. Ujagar Singh (1940) that nominal damages are usually awarded and the principle of injuria sine damno is applicable to an immovable property when there has been an unjustifiable intrusion on the property in possession of another. It was also concluded that the rule cannot be extended to every case of attachment of property irrespective of the circumstances.

So in total, the maxim Injuria Sine Damno refers to the remedies which are provided in the form of damages or compensation in violation of any legal right such that if the legal right is violated then action lies even if there is no harm to another. In other words, it is an infringement of a right where no loss is suffered but it creates a cause of action.

Difference between Damnum Sine Injuria & Injuria Sine Damnum

Case Laws

The following case laws are provided for the better understanding of both the maxims:

Case law on Damnum Sine Injuria

Mogul steamship co. ltd vs. McGregor, Gow & co.

In the following case of Mogul steamship co. ltd vs. McGregor, Gow & co., the plaintiff was an independent ship-owner who used to send his cargo port to obtain cargo from China to England. An association of 4 ship-owners, also the defendants in the following case offered a special concession to customers to oust their rival, the plaintiff in this case. The plaintiff under these circumstances suffered loss and sued all four of them for compensation of the losses he suffered. Since, the general principle of Damnum Sine Injuria expresses that ‘if one exercises his common or ordinary rights, within reasonable limits, and without infringing other’s legal right; such an exercise does not give rise to an action in tort in favour of that other person.’

Thus, though morally wrong there are no legal obligations for the acts of the defendants. This case typically concerns the economic tort of conspiracy to injure the rights of the plaintiff. It was held that the combination of workmen and an agreement among them was a lawful act according to the common law and perhaps enforceable inter-se but not indictable. 

The court of appeal and the House of Lords held that defendants had done nothing unlawful. The House of Lords observed that the defendants have done so to extend their trade to increase their profits, although with the intention of injuring plaintiff. 

The court of appeal held by a majority that the action taken was all done within the terms of the law. It was held that the plaintiff in the case did not complain of any trespass, violence, force or any act which infringes the legal right of the plaintiff. Hence, the defendants have done nothing more against the plaintiff than to pursue the bitter end of competition waged in the interest of their own trade. Nor there is an element of illegality in the fact of combination among the defendants.

In this case, it was observed that the damages were done to the plaintiff morally but with legal perspective hence no legal injury was done to the plaintiff which follows the general principle of the maxim “damnum sine injuria” which states that no legal remedies are awarded for moral wrongs unless their legal rights are violated.

The plaintiff failed to prove that any legal injury was suffered by the acts of the defendants and hence in presence of no legal injury the defendants are not applicable for any damages suffered to the plaintiff since all the actions done by the defendants were morally wrong but all the acts were done in a lawful way.

Case law on Injuria sine Damnum

Bhim Singh Vs. State of Jammu & Kashmir

In the following case of Bhim Singh vs. State of Jammu & Kashmir, Mr Bhim Singh, an MLA of Jammu & Kashmir was arrested & detained in police custody & was deliberately prevented from attending the sessions of the legislative assembly to be held. There was also a voting session which was going to be held and since he was not allowed to go. At the assembly session where his vote was very important. Though the person to whom he wanted to vote won but his right to vote was infringed.

He was arrested and was not even presented before the court for four days and was kept in a hidden place. The case is all about the violation of personal liberty where the police though obtaining remand of the arrested person, not producing him before the magistrate within the requisite period. There was a gross violation of rights under Article 21 & Article 22.

It was held that there was an arrest with the mischievous & malicious intent & the plaintiff was entitled to the compensation of Rs. 50,000 since there was an arrest of a member of the legislative assembly while he was on his way to the legislative assembly which resulted in the deprivation of the right to attend the impending assembly session. In the particular cases of Injuria Sine Damnum, the court has the jurisdiction to compensate by awarding suitable monetary compensation.

It was concluded that the member of the legislative assembly was arrested while en route to the seat of assembly & in consequence of the member was deprived of his constitutional rights to attend the assembly session & responsibility for the arrest & hence is entitled to reasonable compensation.

Conclusion

The conclusion of the two maxims are such that one is a moral wrong for which the law gives no remedy even though they cause great loss or detriment to the plaintiff’s but on the other hand other one is a legal wrong for which the law does give a legal remedy though there be violation of a private right, without actual loss or detriment in that particular case.

The main aim of the maxim Damnum Sine Injuria is that no ground of action or no cause of action lies for a person who is acting within reasonable limits even though the other person is suffering losses on that account while the main aim of the maxim Injuria Sine damnum is that if the legal right of a person is violated then a cause of action arises and the person whose legal right has been infringed is entitled to bring a suit against the person who has done it. In these cases, a qualified right has been violated which is different from absolute rights.

References

• www.indiankanoon.com
• www.lexisnexis.com
• www.manupatrafast.com
• www.uniset.ca

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This article is written by Aarushi Gupta. 

The chink in Indian Animal Welfare laws armour is applicability of the regulations on stringent grounds. The ultimate consequence is that people don’t take cognizance or are oblivious of the laws. The articles sheds light on the spheres which are commonly not brought to the table by media or the functioning authorities. 

We need to au fait with the fact that the world is full of sorrows but individuals recognize the ones which are showcased and put forward to us. Against this backdrop, individuals commiserate or sympathize when incidents like physical harm on animals, hunting/ poaching, experimentation on animals, caging of animals, sacrificing of animals for religious purpose, etc. occur. However, majority of them fail to take under consideration that animals suffer torment and pang in many other situations which we don’t even fathom. Voluminous laws have been framed which take into account such cases. But stumbling block arises when such commandments are either not taken into deliberation or they are applicable at many incidents, yet laws have not been interpreted in such a manner. 

Broadly five spheres are covered that is slaughter houses, dairy animals, pet animals, street animals, use of animals in religious rituals. These are the realms where laws are often violated and people come in interaction with animals. This is the brief glimpse,  how in daily walk of life, individuals end up violating laws, land/apartment owners cannot ban their tenants dwellers to keep a pet at home; mandatory following of stunning procedure in slaughterhouses; how throwing garbage on road not only does it violate cleanliness laws but also attracts animals laws; the practise of using horse in the marriage, etc.

Slaughter house

People propense that under Prevention of Cruelty to Animals (Slaughter House) Rules, 2001 destruction of any animal for the purpose of food is permissible and under section 28 of Prevention to Cruelty Act, 1960 (PCA), to kill any animal in a manner required by the religion of any community is not an offence. However, to shed some light at one more instance, people turn their back when it comes to the end number of laws, acts that have been constituted to protect animals going through agony and throb, before they are slaughtered.

According to Bharatiya Cattle Resource Development Foundation, New Delhi against 3,600 legal slaughterhouses in the country there are 32,000 illegal ones. The heart of the fuss behind this is that when these illegal slaughterhouses do not have license, they don’t have any legal permissions like NOC for waste management, pollution management etc. Moreover, common illegal practices include cramming animals into severely crowded trucks–which routinely causes suffocation and broken bones – marching animals to the place of sacrifice, and breaking their tails and beating them to keep them moving. It is jarring to note that according to the recent report of Food Safety and Standards Authority (FSSAI) of India, 40% of registered slaughterhouses failed in compliance with the slaughterhouse rules. 

These reports are further corroborated by the Centre Pollution Control Board which highlighted that “Most of the slaughter houses in the country are very old and still in primitive condition. These units operate with inadequate basic amenities such as proper flooring, water supply etc.”. This paves to reach the conclusion that how animals are being kept in suffocated, unhygienic conditions and they have to go through unnecessary pain or suffering which is in violation of Section 11 of the PCA (which deals with the cruelty imposed on animals).

The health and condition of the animal is also very important. Animals that are pregnant, has an offspring less than three months old, is under the age of three months, has not been certified by a veterinary doctor that it is in a fit condition to be slaughtered are ineligible for slaughtering.

Another issue which merits scrutiny is the mental trauma, pain which livestock go through because slaughterhouses hunker down the legal procedure which needs to be followed before and during the process of killing. According to Food Safety and Standards Regulations, 2010-Part IV, it is mandatory that no animal is slaughtered before the process of stunning and the system is well in place and effectively functional. Stunning can be affected through asphyxiating the animals with carbon dioxide, shooting them with a gun or a captive bolt pistol, or shocking them with electric current to make them unconscious. This is done in order to reduce pain, anxiety, fear amongst the animals. Addition to this there should be a separate space for the same and slaughtering of one animal cannot be done in front of another.

Even well-established slaughterhouses are ignorant or unacquainted with this procedure. In August 2016, a scrutiny of the Ghazipur slaughterhouse– which is said to be one of India’s largest run by a municipal corporation– was conducted by Satya Sharma, the Mayor of the East Delhi Municipal Corporation (EDMC) and it reported that stunning procedures are not being followed and they were being treated in inhumane manner. Animals are slaughtered by untrained workers who slit their throats with dull knives. 

These are hardly some reports which are brought to the table. It can be easily contemplated that if such wretched, pitiful conditions are present in registered slaughterhouses (which are a minuscule percentage) then what would be the environment in unregistered slaughterhouses. The laws were formulated with a bang but resulted in a whimper.

Religious ritual of horse/elephant riding 

There is a presence of blatant estrangement between the pleasure of a person and an animal. The prevalent religious rituals where horses and in some cases, elephants are rented for wedding barat has entrenched fissures for these naïve creatures. They are seethed with an unbearable pain. 

Their miserable journey sets on right from the morning where they have to walk for 20-50kms for the venue. By the time they reach the venue, they are exhausted but then they are dressed. The saddle which is placed is a heavy throne and the groom along with his nephew sits on the horse. The music and the band are played at high decibel levels (animals are sensitive to sounds). The horse handler uses spoked bites which are made of iron chain and this rips apart the tongue and makes the gum bleed. According to the inspection done by Delhi Police and animal protection institution named PETA,  as many as 50 spoked bites were stumbled upon.

The parlous situation which they have to endure where they are beaten, kept in unhygienic, small shed, over-loaded comes in for a special attention. According to a report by the National Research Centre on Equines (NREC) a lot of horses that were used in marriage ceremonies are infected with Glanders, a fatal equine disease. The reason behind this was the abysmal conditions in which they were kept. The diesease spread through the swelling below the jaws, infectious diseases from wounds. 

Under Section 11(1) of the Prevention of Cruelty to Animals Act, no person for any purpose can use any spiked stick or bit, harness or yoke with spikes, knobs or-projections or any other sharp tackle or equipment which causes or is likely to cause bruises, swellings, abrasions or severe pain to the animal. Even in the landmark judgment Animal Welfare Board of India v. A. Nagaraja and Ors 2014 laid down that every species has the right to be treated with compassion and dignity, free from unnecessary pain and suffering. It recognised five fundamental principles of animal welfare– (1) freedom from hunger, thirst and malnutrition; (2) freedom from fear and distress; (3) freedom from physical pain and discomfort; (4) freedom from pain, injury and disease; and (5) freedom to express normal patterns of behaviour.

Through sporadic efforts, courts have targeted their guns at this instance. In Mumbai a Public Interest Litigation (PIL) was filed by Animal and Birds Charitable Trust (ABCT) in 2011, and a verdict was passed where horse-driven carriages/victorias chariots were banned. The agrarian distress which these animal goes through cannot be fathomed and there need to be the strict following to the rules and regulations laid down.

Pet Animals

The viability of a pet being contented and exultant is quite bleak in India. Majority of the pet owners have two different strands of thought before and after their purchase. Pets have been always suited to the whims and fancies of humans. The discussion will be based on two broad arenas which is dogs, cats and birds as these are the major part of pet world. Primarily, let’s have a cursory look on dogs and cats. All animals in a puppy mills suffer however the parent dogs normally called ‘breeding stock’ endure cruelty all their lives. The females are repeatedly forced to mate and after 8 years when they can no longer breed, they are abandoned. The females suffer from several illness such as distended vaginas, clogged teats, etc.

To hunker down such diseases Section 5(3) of Prevention-of-Cruelty-to-Animals-Dog-Breeding-and-Marketing-Rules-2017(PCADM) states that no female dog should be exploited to produce litters in two consecutive seasons. They are kept in filthy and unhygienic conditions and are confined in small cages. The puppies are separated from their mothers at a very young age (20-40) days and as a result they have weak immunity. Females are also forced to mate to those who they are related, which means their brother or even children which is referred as inbreeding or incest breeding and it is in violation to the Section 6(3) of PCADM. All such gross incidents are taking place overtly. Recently Animal rights body PETA India on alleged that online portals OLX and Quikr are selling puppies under eight weeks old which is in violation of Section 8(a) of PCADM.

Most of the dog breeders are in the dark and inconsiderate of the fact that to ensure a smooth life for pets they sell,  under Section8(g)(5) of PCADM it’s the breeder’s responsibility to keep track of all the pets sold and check their progress rate at least once in a year. People get swoon away and end up in buying a pet without realising the responsibilities which they have to hold. They are kept in close confinement, most of the time leashed, isolated, fails to provide sufficient food, water. According to report by Times of India, 90% of the people are not kind to animals and over 60% of these animals die. Under Section 11(g) and Section11(h) of the Prevention of Cruelty to Animals Act a person cannot keep his pet tethered or chained upon an unreasonably short cord or chain for unreasonably long time. Moreover, they should be provided with sufficient basic amenities. 

These pet owners act as proverbial villains when they abandon them for irrational and irreconcilable reasons. To cite an instance, where a three-year-old Pomeranian was found abandoned with a letter attached to its collar in Thiruvananthapuram. In the note, the owner said that they are fed up with the pet’s “illicit relationship” with a dog in the neighbourhood and they have no option other than abandoning it. Such are the vague reasons presented. 

On one hand there is an exponential upsurge in the number of customers purchasing pets and on other hand there is an equal upswing of pet owners shredding the life of their dogs and cats. In fact, a report by Times of India states that Mumbai saw a double fold increase in pet abandonment. And According to Abhinav Srihan, Fauna Police member and animal rights activist, says at least one pedigreed dog is abandoned in the Capital every day. Under Section 11(i) of the Prevention of Cruelty to Animals Act, a person without reasonable clause cannot abandon any animal which tender it likely that it will suffer in pain by reason of starvation or thirst.

Furthermore, many people prefer to keep birds as pets as it proves out to be less expensive. The Wildlife Protection Act, 1972, prohibits the birds that are listed in Schedule IV of the Act and keeping them as pets can invite a jail term of up to six years or a fine of over Rs 5,000.

Notwithstanding of these laws,  300 species of birds are openly sold in markets which includes mynhas, parrots, peacocks and parakeets. Parrots comprise of 50% birds trade in India. According to a report by Times of India parrots mostly include Indian hanging parrot(lorikeet) and the rose ringed parakeet which are not allowed to be kept as pets according to the Schedule IV list number 39 and 50 respectively. As per statistics provided by Forest Department in 2018,  more than 2,000 birds were rescued form Coimbatore in last 3 years.

These are the glimpse of some landmark cases which turned the sad pages of birds history. In the case of People for Animals v. M D Mohazzim & Anr, held that: birds have fundamental right to live and they cannot be subjected to human cruelty by keeping them in cages. In Muhammadbhai Jalalbhai Serasiya v. State of Gujarat, held that to keep birds in cages would tantamount to illegal confinement of the birds which is in violation of right of the birds to live in free air/sky.

Street Animals

Ominous clouds have gathered over our street animals which are casting shadows of malady and sorrow. Individuals nit-pick when some wayward people hit street animals, burst crackers, or perform any explicit reckless behaviour. Though all these actions are unlawful (under Section 428 of Indian penal code, whoever commits mischief by killing, poisoning, maiming or rendering useless any animals or animal of the value of the ten rupees or upwards, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both) and gain sympathy of public in large, however we often neglect other aspects of viciousness behaviour to street animals.

Majority of the general public offer food to cows, dogs, etc. in polythene or similar material. Along with the food they also consume the polythene which is toxic to them and does not bode well for their body. Cows which ingest plastic are not able to eat proper food after that. Moreover, according to the report by The Hindu, main reason behind increase in stray dog numbers in Kerala is the careless waste disposal methods, frequently dumped in sacks by poultry traders and meat shops. This could result in fatal diseases and disorders such as anorexia, starvation, constipation, and may be finally death,  According to the report of Blue Cross India 90% of the cows in Chennai have plastic waste in their guts. What is more to add here is that when people litter around the garbage,  on which street animals feed poses far reaching deadly health consequences. In the last five years, magistrates caught 87,784 people found littering in Delhi– on the spot. Statistics show that in five years, challans were issued to 55,929 people for throwing solid waste in drains. In India, 80 % of total plastic consumption is discarded as waste and official statistics say the country generates 25, 940 tonnes of plastic waste daily. At least 40% of this waste is uncollected. 

Not only does littering in itself is a punishable offence under sections 269 (Negligent act likely to spread infection of disease dangerous to life) and 270 (Malignant act likely to spread infection of disease dangerous to life) of the IPC but also this deed attracts some more violation of legal provisions. Feeding an animal in this manner or littering around paves way to consumption of toxic, harmful food substances by these creatures. Such kind of food acts as a slow poison. It is a kind of injury: when such food material is provided then it paves for end number of diseases as mentioned above and they are tortured as they have to endure unnecessary pain. Thus, a person can be charged under Section 11(a) for unnecessary suffering or pain to the animals according to Prevention of Cruelty to Animals Act, 1960. 

Dairy Animals

Across the length and breadth of the country, livestock or pre-dominantly dairy animals are seethed with agrarian distress and unbearable pain. In India, many individuals deploy the ammunition that killing of animals for food is torturous but this line of reasoning will begin to crumble, when the mayhem situations which dairy animals go through will be covered in this article. Though the pervasive illegal use of chemical Oxytocin has been frequently brought to the table which is injected for production of more milk and causes hormonal imbalances, cancer, etc., however other arenas are not looked upon.

At the outset, animals are impregnated repeatedly at least once in a year. People commit heinous offence when they separate the calf as soon as after birth or even after just 3-4 days. These calves are offered limited suckling and substitute of milk constituents and such practises are unlawful under Section 14(i) Prevention of Cruelty to Animals (Regulation of livestock market) Rules 2016[PCAR]. Moreover, their mothers agitatedly call them and they suffer mental trauma. Calves are tied with the short ropes and their mouth is tied so that they cannot cry. 

The former chairperson of Amul admitted that each year in Mumbai 80,000 calves are put to death. According to a report by PETA,  buffaloes in metropolitan cities like Delhi and Mumbai are kept in unhygienic condition lying around their excreta, suffering from skin infections,  etc. When such developed cities have such miserable conditions then it could be easily estimated the state of other places. Keeping animals tethered on a short rope for unreasonable period, under thirst or starvation, inadequate ventilation is in violation of Section 15 of PCAR.

Furthermore, these animals are poorly fed and, on many instances, they are left on streets, leading to an unhealthy diet. Section 19 of PCAR describes that animal should be provided with adequate and wholesome amount of food, water after each cycle of 6 hours. Individuals are completely oblivious of the recent laws where painting horns, decorating animals through objects and ornaments, tying ropes around penis,  casting animals on hard ground without adequate bedding (during farriery), nose-cutting or ear slitting or cutting by knife or hot iron marking for identification purposes other than by veterinarian, tying nose bags as feeding troughs is in violation of the PCAR act under Section 14.

Conclusion

Although, on one hand India has one of the finest animal welfare laws but on other hand the fauna of our country is highly prone to cruelty and harassment. In recent years, certain arenas have been addressed but many other issues are neglected upon. This article aimed to put forward such derelict occurrences. Furthermore, statistics, figures have been mentioned to conclude that how in large scale such instances are taking place and yet no action has taken place.

Besides that, the penalty and punishment which is imposed is far less than the offences which are committed. Such lacunas need to be filled to reduce such offences.

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This article is written by Indrasish Majumder, a student of National Law University Odisha. 

The resolution is in line with the aim of the government to ponder on stake sale in government institutions, shore up finances thereby allowing the PSUs to generate resources. Disinvestment for FY21 by the government has been marked at Rs. 2.11 lakh Crore. 

For the FY20 a target of Rs. 1.05 lakh crore has been decided by the Government. The process relating to the disinvestment of Air India has already been commenced, and bids for a 100 percent stake in the Air line has been requested from potential buyers.

Meaning of Disinvestment 

The selling or liquidation of assets by the Central and State Public Sector Enterprises, projects or any other fixed assets is referred to as disinvestment. Disinvestments are undertaken by the Indian Government for several purposes from aiming to lessen burden on the exchequer, gather money for specific purposes so as to reduce shortfall in revenue collection from other regular sectors of the economy. However, in certain situations disinvestment may be undertaken by the government for privatization of assets as well. It would however be incorrect to assume all disinvestments as privatization. Disinvestments are often initiated by the government to aid country’s growth in the long term; additionally, it also aids the government and the concerned companies to reduce their debt ratio. The capital market of India is strengthened and advanced as Disinvestment brings forth a significant share of PSU ownership in the market.

Merits and demerits associated of Disinvestment 

Disinvestment allows the utilization of large proportions of public resources in non-strategic public sector subdivisions for employment in arenas located on a much higher pedestal in the social priority namely: health, family, philanthropy. Disinvestments additionally aids in the easing of the sizable public sector debt in the International arena. Some benefits of disinvestment can be as follows:

Privatization would help in reduction of the outflow of sparse public resources, assisting the “non strategic public sector units, consequently.

Transference of commercial risks wherein the money of the taxpayers locked up in the public sector is left vulnerable to the private sector whenever a company steps in is facilitated by the process of privatization.

The release of tangible and intangible assets would be ensured in the process of Privatization, e.g. significant manpower stuck in the management of PSU’s and ensure the reallocation of such assets in sectors of greater priority.

Private companies would become more self-sufficient upon being subjected to the plethora of market disciplines in the process of Disinvestment.

Greater wealth distribution would be ensured in the process of Disinvestment by presenting shares of privatized companies to interested small scale investors and workers.

The exposition of the public sector to investment from the private sector shall ensure a holistic augmentation of economic activities, employment opportunities and greater tax returns in the long run.

Privatization because of the competitive nature of companies shall ensure greater choices and increased product quality for customers.

However, the amount earned by means of disinvestment per year from 1990-2004 amounted to 2056 crore, which is inadequate considering the debt ratio of the Indian Government. Furthermore, the process of disinvestment lacks transparency as how the money earned from disinvestment is being utilized is never publicized.

Despite the benefits of Disinvestment for the economy and companies, the disinvestment of profit earning public sectors will snatch away from the government significant monetary returns. There is additionally no reason behind the department of disinvestment retaining equity in disinvested PSU’s e.g. Modern Foods (26%), if it is ultimately governed by the ulterior motif of skimming commercial risks.

The unavailability of sufficient manpower never hinders the growth rate of the social sector, therefore the same reason should not be cited by the government to justify Disinvesting.

Only the government can best ensure the market system is adequately regulated and make sure, the private companies are not purely profit motivated and take care of the customers’ interest.

It would be incorrect to assume that Privatization is influenced by the public selling of shares. There have been instances wherein the sale of shares between 1991-1996 has attracted only a limited number of employees, and were not very affable to small investors and employees. 

Monopolies can never bring forth any good, fair and healthy completion is what can benefit the customers the most. Perceiving from this angle, disinvestment might not be the most effective of options.

It has been explicitly mentioned by Hindustan levers that it harbors no plans for amalgamating with Modern Food Industries for capital infusion on January 2002.The party in support of this disinvestment had via this private sector investment the taxpayer’s money would be secured.

Therefore, as can be perceived disinvestment has competing effects, and it should be left unto time to ascertain the effectiveness of the current Disinvestment policy.

Explaining the Rationale behind the LIC Disinvestment policy 

The government in clarifying the rationale behind the LIC stake sells policy comments, the categorization of companies on the stock exchange in addition to regulating a company allows access to markets (financial) and determines its value. Retail investors are also in process allowed an opportunity to get a share in the wealth created. The government has agreed to auction a part of tis holding to the to LIC by IPO (Initial Public Offering). However, with regards to the IPO there are a few things that needs to clarified and borne in mind:

Firstly, the LIC is owned 100 percent by the Government and even if there is a disinvestment of shares it is not likely to exceed 10% of the shares to the public sector insurance firm. It needs to be taken into consideration LIC is governed by the LIC act, so before the IPO is executed the act needs to be amended accordingly.

As mentioned above the Modi government for the FY20 has set a disinvestment target of 2.1 lakh crores and the disinvestment of LIC is supposed to fetch 70-80 thousand crore. The listing shall make the IPO one of India’s largest in terms of “market capitalization”. It is being contemplated by experts the IPO shall attract foreign investors as well.

LIC has consecutively been ranked as the country’s biggest insurer, with a share of 76.28%. LIC has a plethora of subsidies e.g. IDBI Bank. NPAs for LIC increased to 6.10 for the initial six months of 2019-2020. Insurers have successfully doubled the Gross NPAs in the last five years. Therefore, perceiving the initiative from a holistic perspective entails certain pros to it as well.

Adverse Employee reaction to the Disinvestment 

In reaction to recent disinvestment plan Employee unions however have carried out demonstrations opposing the IPO alleging the move to be in opposition to national interest.” The general contention of the employee union asserts LIC has contributed significantly to the economic augmentation of the country and dissolution of the government’s power hold would jeopardize the country’s fiscal and financial autonomy. The statement has been issued while posing threats that the LIC employee unions would go on an indefinite protest to the plan of the government.

The plan of disinvestment has been proposed by the government in lines with the “maximum governance, minimum government” policy but straightforwardly the government is not entitled to authorized or impede the machinations of a business by being in the business mantras and increasing its fiscal revenues. As commented by the BSP MP Danish Ali “Congress is also against this step of the government. The employees are against the disinvestment and say that this is against the national interest. It will endanger the economic sovereignty of the people and will put the savings of crores of policyholders at stake.”

Although nothing conclusive can be inferred from the immediate public reaction, there has been deliberations on the policy from both factions of those in support of the policy and those who oppose it, commenting on the initiative to be in refutation of the interests of the public and terms it a “family jewel being sold out”. However, on the other side of picture the government assures the decision has been arrived at only after taking the interest of the public in consideration and that in the long run greater transparency shall be ensured and increased public participation be allowed.

Ways to disinvestment 

For the purpose of attaining the various goals and objectives related to disinvestment, a plethora of methods of disinvestment has been suggested and implemented e.g. Public offer, refers to the distribution of shares of the public sector at a predetermined price, via a general prospectus. The offer is reached out to the public via known market intermediaries. The disinvestment of LIC can be brought in the purview of this category of disinvestment.

Equity sale refers to the selling of equity via auction of shares between pre-determined clients, which can extend to large numbers. Merchant bankers can aid in the determination of price for PSE’s.

Offer for sale refers to a definitive price for selling of public enterprise, attracting bidders and allowing the tender to the highest bidder.

In cross holding disinvestments, the government sells a part of its shares to one or more PSU’s.

The Golden share manner of disinvestments ensures the government retains a 26% share in the PSU, thereby ensuring the government status as the majority shareholder.

In Warehousing manner of disinvestment, financial institutions which are government subsidiaries are expected to purchase the shares from the government in select PSU’s and keep it until a third buyer agrees to purchase it.

Finally, there is the strategic sale manner of disinvestment, wherein the government sells the major portion of shares (51%) and also bestows the power of management to a strategic purchaser. The PSU’s share shall be domineered by the department of investment and the price of disinvestment shall be based on the market prices and is not prefixed.

What is IPO?

IPO or Initial Public offering refers to the procedure via which a private company is made public by the selling of its shares and stocks to the public. The company that agrees to be listed on exchange and go public in process can be either a newly incorporated start up or old company. By disinvestment the company can acquire “equity capital”, either in manner of issuing new shares to the public or by selling existing shares without trying to acquire any new capital. The company offering to sell shares is termed the ‘issuer’ and the aim of the company is furthered with the help of investment banks. The shares of the company post IPO are bartered in the open market and can be sold further in manner of “secondary market trading” by investors.

Conclusion 

It can in the end be concluded it is too soon to reach make any deductions relating to the disinvestment of LIC. The government in the FY20 has projected an enterprising disinvestment target. The disinvestment policy of LIC, is a humongous initiative and a significant “leap of faith” in furtherance of the same aim. An improvement at the operational level of state insurer might be hopefully witnessed in due course. The decision shall ensure LIC does not go in the direction that was followed by BSNL and lose out on its share of markets in future. The IPO shall strive towards making the company more competitive and vigorous. However as has been mentioned above and exemplified in the contention of majority employees the dissolution of the government shares might in the long run threaten the financial sovereignty of India.

The effectiveness of the policy can only be adjudged in the long run. However undoubtedly the government has ensued a valiant step by incorporating LIC in the category of Public Listing Disinvestment list of the budget 2020. There are pros and cons to the plan, but the effectiveness of the plan shall gain prominence, only after the negative reactions to the policy (protest of the LIC employees) change has been addressed, the concerns assured, additionally the legal hurdles related to the plan needs to be exonerated in due course. If the same concerns are addressed and the hurdles removed the disinvestment plan of LIC can even out or reduce the budget deficit that has been multiplying over the years, while at the same time ensuring a humongous leap in the price of per incremental disinvestment.

Bibliography

1. https://economictimes.indiatimes.com/markets/ipos/fpos/government-to-disinvest-lic-partially/articleshow/73835117.cms
2. https://www.financialexpress.com/what-is/disinvestment-meaning/1762574/
3. https://economictimes.indiatimes.com/news/politics-and-nation/mps-curious-about-government-roadmap-for-lic-listing/articleshow/73973909.cms
4. https://psuwatch.com/heres-all-you-wanted-to-know-about-lic-disinvestment/
5. https://www.thehindu.com/business/budget/budget-2020-unions-protest-lic-stake-divestment-move/article30715821.ece
6. http://iasmaker.com/contents/display/methods-of-disinvestment-in-india/
7. https://economictimes.indiatimes.com/definition/ipo
8. https://www.business-standard.com/budget/article/divesting-stake-in-lic-a-leap-of-faith-i-t-structure-now-more-complicated-120020101067_1.html

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This article is written by Shreya Srivastava and Ankit Chaturbedy, students from Amity University, Kolkata.

Abstract

Today, the Indian subcontinent and the Line of Control (LOC) in Kashmir is the most dangerous place in the world. Kashmir being praised as “the paradise on earth” remains the longest. Unsettled and the most debatable dispute in the world emerges as a nuclear stalemate (flashpoint) between the two rival nations of South-East Asia- India and Pakistan. The scenic beauty of Kashmir is described as being surrounded by the mountains which are considered as the guardian angel and knight in a shining armour of the people of the region and paved way for various religions and culture to settle down in the Kashmir valley.

The stalemate in Kashmir region continues ever since the partition in 1947. A number of fights have been engaged in by the two nuclear powers over the ‘valley beautiful and bloody’. However, the majority of Kashmiris have been fighting for the right of self-determination; the beauty of Kashmir has been exposed to a great many violence. Ultimately straining the relations between the two nemesis countries. The Kashmir conflict is also an outcome of a process of neglect, discrimination, the suppression of Kashmiri identity and the pre-eminence of the power centric approach held by the seriate regimes of India and Pakistan. The Kashmir dispute has an immense economical and political impact India and Pakistan and also Kashmir.

This research paper reveals the constitutional problems of the Kashmir conflict and draws attention towards the solutions to the Kashmir imbroglio. It depicts the wants of Kashmiri and how decade long conflicts have affected them; from the point of view of Kashmiri. The paper also traces the history and genesis of the conflict since the formation of Kashmir, various milestone the socio-political structure of the state, the revolt against the Dogra rule and insurgency that ultimately led to the once known ‘Happy Valley” depicting tolerance and peace to ultimately become the symbol of violence, ethno-nationalist assertions and political struggles; which ultimately resulted in havoc and the abrogation of Article 370 and Article 35-A through a dramatic overhaul of the Government of India towards resolving the deadlock in Kashmir with an expectation to improve – Indo-Pak relations in the future.

Introduction

Was it, Sir Zafrullah Khan’s superb oratory skills in United Nations, or Pandit Nehru’s incompetent political fantasy to fight egoic war over Sardar, or Dogra clan’s aristocratic failure to take people in confidence that led to the dismay of hundreds and thousands of innocent masses of Jammu and Kashmir. As General A.G.L McNaughton stated, “So long as the dispute over Kashmir continues it is a serious drain on the military, economic and above all, on the spiritual drain of these two great countries”, we find that from the very beginning of the two-nation theory, Kashmir issue made India and Pakistan invest billions of dollars, to defend and aggres the might of the beautifully bloomed valley. However, the once peace-loving fraternity of the state has suffered the burns of terrorism, invasion, aggression, poverty, social alienation and discrimination and there is no solution either form any stakeholder- India, Pakistan, Hurriyat (as accepted by many notable stakeholders and UNHRC) or the mediator- United Nations and allied nations of both sides who keep pumping fuel cunningly to satisfy their own financial benefits. 

The discrepancy is neither party who is claiming authority over the state takes consent and consideration from general mass of Jammu and Kashmir. It’s hard for any government to kill its people, but our heads bow down in shame to accept the horrific scenario, which both Delhi-defending the “Sawmpoorna Kashmir” and Islamabad-propagating the “Jihad” have been committing through ages. Recently the Indian Government stirred the whole political scenario of Indian Subcontinent by abrogating the ‘Special Status’ of the state of Jammu and Kashmir, and dividing Ladakh from Jammu and Kashmir and creating both Union Territories, directly governed by the Union Government at Delhi. Pakistan on the other hand couldn’t add any value in the POK (Pakistan Occupied Kashmir) except terrorism and China’s CPEC (China-Pakistan Economic Corridor) program which would ultimately be the OBOR (One Belt One Road) fantasy of China alike the creation of artificial islands in the South China sea, at the opportunity cost of brotherhood between people, socio-ethnic integration and peace. 

Every day at prime time and breaking news telecasted in both India and Pakistan, shows ceasefire violations, brutal protest of kashmiris living on either side of the LOC (Line of Control), massive crackdown by governments of Delhi and Islamabad, and all information which creates a sense of fear, aggression, anger, hate, avoidance of the people of both the nation, towards the people of the region who never got their fundamental rights, yet are demarcated with glossy names such as, ‘Sampoorna Kashmir’, IOK (India Occupied Kashmir), POK or AJK (Azad Jammu and Kashmir), etc. 

Chaos in the origin and claims by india and pakistan

The 84,471 square miles state of Jammu and Kashmir was even larger than Hyderabad at the time of partition, and handling the thinly spread 4 million population became the biggest failure of India and Pakistan. Jammu and Kashmir was ruled by Maharaja Hari Singh, who ascended to the throne in 1925, which their dynasty forefathers (Dogra Rajputs) established in late 1830s and expanding during 1840s to form the Jammu and Kashmir as a whole. Alike other Indian princes Hari Singh contributed most of his time at racecourses of Bombay and Calcutta, and lavishly spent time on hunting campaigns in his lush green province. As Hari Singh’s fourth and youngest queen complained, “he never meets the people”- and that was the penultimate problem. The king enjoyed his throne with courtiers and favourites from British high ranked officers and other Indian aristocratic lobby and knew nothing about the outside world and the condition of his kingdom. The great heterogeneity of Kashmiri population was offended by their king and his policies.

Unlike other disputed princely states such as Junagadh and Hyderabad; Jammu and Kashmir was contagious with both India and Pakistan. The king wanted an independent kingdom and denied to join either of the democracies even where the sentiments of the people were not considered. Even if his finances were low, he still found that Kashmir would stand to its paramount power with allying with any power in this world, not excluding Russia. The Indian efforts to make Hari Singh sign the instrument of accession was not feasible due to the Union controlled by Congress, which was not in favour of lavish lives of Indian princes and a socialist approach made the king more annoyed, only to decline requests made by Chacha Nehru, Bapu Gandhi, Sardar Patel and Lord Mountbatten. On the other hand, Quaid-i-Azam Jinnah married a Parsi and Prime Minister Liaqat Ali Khan married a Christian, were administrators of Pakistan, and for them it was governing a totally unknown place away from their homes left in Indian Union. 

The term ‘Muhajirs’ which we still hear at our daily lives were people who migrated to Pakistan from India during the partition, and its ironical from the Pakistani claims, of acceptance of the people of Kashmir as their near brothers seems fake as they are still actively mocking the migrated Muslims as “Muhajirs”. Similar was the case with the Governor-General of Pakistan and their Prime Minister to whom the essence of Kashmir-that familiar piece of land standing vulnerable and disputed, was the mark of their past which they want to incorporate in their new present and ultimately in future. It was all the faults of Maharaja Hari Singh, who ignored the harsh economic reality and his subjects, stayed aloof from joining any of the unions which later created a power struggle among both the newly born nations- India and Pakistan.

A master degree holder from Aligarh Muslim University was denied from his deserved government job in Kashmir and the control of Dogra Hindus on administration, and to be held as “….ill treatment of Muslims was an outcome of religious prejudice”. Yes, that degree holder later became the visionary of Kashmiri ideology and arch rival of Hari Singh, a witty and compelling orator, a son of Shawl merchant– Sheikh Abdullah. Abdullah, who was gathering groups of people and was leading a delegation of Muslims, hoped for recognition from the Maharaja, met with ill fate as an activist Abdul Qadir was arrested and an clash between the delegation and maharaja’s forces killed twenty one.

In the next year, 1932, All-Jammu Kashmir Muslim Conference was formed by Sheikh Abdullah and Ghulam Abbas, a lawyer from Jammu, to fight for the deprived rights of Muslims. However, six years later Abdullah turned the organization into “National Conference”, which would include Hindus and Sikhs of the kingdom and propagate form a common Kashmiri goal, excluding his dearest companion Abbas who looked to organize Kashmiri Muslims independently. 

Coming back to the past struggle during 1946, we find Sheikh Abdullah instigating a movement against the Dogra Dynasty to ‘quit Kashmir’ which resulted in imposition of martial law by the Maharaja, death of more than twenty people, a sentence of three years imprisonment for ‘Sedition’. Another dynamic leader Pandit Nehru, who particularly considered Abdullah to be his friend rushed for his friend’s rescue only to be stopped at the border and getting back to British India. Now the Maharaja who loathed Congress could not join Indian Union and on the other hand joining Pakistan would seal ill fate for his Hindu dynasty. However, Hari Singh’s old acquaintance Lord Mountbatten reached Kashmir on the 3rd week of June 1947, after the decision to divide the nations was finalized, to convince the king to join the Indian Union. The Maharaja however averted the embarrassing encounter by a ruse of colic attack, and neither efforts of Nehru from Delhi, Mountbatten and later Gandhi ji who visited Kashmir could convince Maharaja Hari Singh and on 15th August, 1947, Kashmir neither acceded to India nor Pakistan.

Pakistan signed a “Standstill Agreement” offered by Kashmir which allowed free flow of goods and people across borders but India remained aloof to wait and watch the situation. Much to Indian anticipation, by mid of September 1947 the rail service between Sialkot in West Punjab and Jammu was suspended, and logistic services were blocked by Pakistan. Although Nehru was adamant to acquire Kashmir, Sardar Vallabhbhai Patel was inclined to let Kashmir join Pakistan. However, this scenario changed when Pakistan accepted the accession of a Hindu majority state with Muslim ruler– Junagadh.

For “if Jinnah could take hold of a Hindu-majority State with Muslim ruler, why should the Sardar not be interested in a Muslim-majority State with a Hindu ruler?” Thus the religious colours which had already inked Punjab and Bengal black, splashed upon the beauty of Kashmir for once and forever till present date. On 29th September, Sheikh Abdullah was released and his speech in Hazratbal mosque was a key in the Indo-Pak dispute, where he demanded a complete transfer of power to the people and let them decide which Union would they join. Although the National Conference was pro-Congress the people of Kashmir were not biased about either India or Pakistan. Maharaja Hari Singh still had high hopes for an Independent Kashmir and stated, “….the only thing that changes our mind is if one side or the other decides to use force against us” and he wanted Kashmir to be Switzerland – a state completely neutral. 

On 22nd October, just two weeks after the statement of Hari Singh mentioned above, few thousand men with arms, lorries, logistics, training and support from Pakistani Army invaded Kashmir, separated North-West Frontier Province and so called “Tribal Invasion” was blamed by each nation India and Pakistan as propaganda to acquire Kashmir by threat. Pakistan blamed the Indian Govt. to aid Pathan Muslims in valley to disrupt and destroy the Kashmiri Muslims and the sudden uprising of Muslim community at Poonch on 1936s due to the atrocities of the Maharaja gave Pakistan a cause to blame India. 

On 14th August many shops were closed in Poonch and people were found celebrating with Pakistani flags along with frequent clashes with Dogra troops. Pakistan with its ever-cunning nature in the name of Jihad started supplying rifles and ammunition to the Poonch rebels. A rebel base in Pakistani soil in the town of Murree was set up with the acknowledgement of Prime Minister Liaqat Ali Khan and Senior Punjab Muslim League leader Mian Iftikharuddin, who approved for more supplies to the rebels. To enforce an evil intention and provoking violence in the state of Kashmir, Colonel Akbar Khan supplied 4000 rifles to the rebels and named himself ‘General Tariq’, after a medieval Moorish warrior who had fought the Christians in Spain. 

The insurgents moved faster down Jhelum and captured Muzaffarabad, where Jammu and Kashmir Light Infantry, having a large number of Muslims from Pooch refrained from attacking the invaders. Later, Brigadier Rajinder Singh’s defenses fell and Uri and Mathua Power station was captured by the rebels and whole Srinagar plunged into darkness, with no power supply. The invasion of Kashmir was thoroughly encouraged by the Prime Minister of then North-West Frontier Provinces, and as Jinnah’s American biographer Stanley Wolpert referred that, “trucks, petrol and drivers were hardly standard tribal equipment, and British officers as well as the Pakistani officials all along the northern Pakistan route they traversed knew and supported, even if they did not actually organize and instigate, the violent October operation by which Pakistan seems to have hoped to trigger the integration of Kashmir into the nation” Pakistan’s efforts are always of violence and the tendency of colourable religious war, in the name of ‘Allah’ and ‘Jihad’. 

Alastair Lamb, the famous historian on Kashmir dispute, commented on the tribal attacks as, “what might be expected from warriors engaged on what they saw as a jihad, a holy war”. The greed of these tribesmen triumphed over any basic humanity and religious identity, as they looted, burned, massacred the Hindus, Sikhs and Kashmiri Muslims, and a pallour of rapine continued with rapes of Kashmiri women. ‘Shrieks of terror and agony of those girls resounded across the town of Baramula’ Pakistani stand was never for the benefit of Kashmir and it is evident from the malafide intentions of invading Kashmir, when people were left free to decide their fate and the popularist view of Sheikh Abdullah was moving towards a peaceful solution and accession to Indian Union. But the Pakistani religious tactics continued and is still continuing in form of terror attacks and terror funding and lobbying, just that the people during the partition seemed more reasonable and logical than of current generations, who opt to stone-pelting, providing access to Pakistani militants and the once common cause for the unified of Kashmir seems fragmented by the evil propaganda of Pakistan and their well-wishers. 

Whether Abdullah was India’s man still remains a question, but surely, he was not Pakistan’s man, and according to Abdullah, ‘Pakistan would swallow us up. They have tried it once. They would do it again’.

The Kashmiri Muslim’s alienation was an apparent outcome of the policies of the Indian state. Since 1953 the various developments in the Kashmir politics viz. Patronage politics, missing relics, playing with autonomy, etc. all lead to tensions and havoc in the valley of Kashmir which further has led to insurgency in the region. The insurgency or uprising marked the agitation of the community which was exposed to discrimination, deprivation and threatened their very identity, leading then on the path of violence. The ethno-nationalist politics serves as a link between the ethnic identity of the entire community of the region and political movements. It is believed that the very insight of oppression, perceptions of having intruders, enemies, invaders, etc. gives rise to national consciousness. “Ethnic groups are born and arise because of the perception of oppression; if there were no perception of oppression, real or imagined, there would be no ethnic self-determination.” Thus, it was the perception of oppression that substantiated the dawn of insurrection in the Kashmir valley.

In the year 1988, a number of secessionist leaders crossed the border entering into the Pak controlled Azad Kashmir, trained themselves of weapons and returned to the valley preparing to initiate political insurgency. Majority of youth among them who crossed border were originally supporters of Muslim United Front. It was during this time that people began losing faith in democracy and thus became more tolerant to extremists. Thus, the journey which was supposed to begin from a ballot box unfortunately was led by bullets. In due course, the vale was caught up by militancy, strikes, bomb blasts, firing, etc. The JKLF (Jammu and Kashmir Liberation Front) was the first secular militant organisation with a demand of independent Kashmir and leading to a beginning of a secessionist movement on the grounds of ethnicity lea by its chief Yaseen Malik. 

The organisation in 1988 first struck Srinagar by exploding a bomb and emerged as the first group to furnish momentum to the movement and the whole valley went into the euphoria of ‘Azadi’. In 1990, the situation of Kashmir was a violent turn that manifested in senseless killing, abduction and arson. Mercenaries like Hizbul Mujahideen critically backed by various agencies and interest were increasing their hold in different parts of the state, marking the second phase of the movement. Jihad was justified by Hizbul as a means of validating political violence in the name of Islam and Islam emerged as an instrument religion having a great impact influence on people’s ethno-religious sentiments that left imperishable mark on the Kashmiri society. These sentiments provided for an emotional upper hand which made people willing to die or kill in the name of religion. 

Thus, hijacking the secular belief of the Kashmiri identity. It was then the community of minority Kashmiri Pandits targeted and terrifying aura was created by the militants in the valley. Many Kashmiri pandits were forced to leave their homes and were called upon to live under the Islamic laws or go away. “Kashmir meh rehna hoga, Allah-Hu-Akbar kehna hoga” had psychologically shattered the Hindu minority community. Selective killing of the Kashmiri pandits and eventuating into the mass exodus was the result of the movement of Islamization of once a peace-loving secular state. Hence, depicting the entire struggle to be exclusively of the Muslims, for the Muslims and by the Muslims. 

With the entry of Afghani terrorists and Pakistani infiltrators, the year 1993 marked the beginning of the third militancy phase wherein groups ‘Harkat-ul-Ansar’, ‘Harkat-ul-Jehad-Islami’, ‘Harkat-ul-Mujahideen’, ‘Jamial-ul-Mujhaideen’ and ‘Lashkar-i-Taiba’ took shelter under one blanket – Jihad Islam. This phase had a negative impact on the masses and marked the beginning of the turnaround. The shift from Kashmiri Islamic Identity to Jihadi Islam was one reason for the decline in the movement. Also, involvement of foreign terrorists who identified the Kashmiri Muslims as Muslims and not Kashmiris, marked the second reason for the downfall. Popular resistance towards militancy, efforts to regain Kashmiri control and political avenues explode for the purpose of negotiation highlighted the fourth and fifth phase of the militant movement. It was then the All Party Hurriyat Conference came into existence to launch the freedom struggle from Kashmir. In 1995, the Kashmir’s most revered saint Nund Rishi/ Sheikh Noor Uddin’s shrine Charar-i-Sharif was destroyed by the militants. 

The roots of the Kashmiri uprising, driven by multiple intersecting sources (also including policy failures of New Delhi, political and social situation and meddling by Pakistan) was referred to as the most complex rebellion. “Islamic identity moved in to fill the vacuum created by failed elite”. 

The State Assembly elections in Jammu and Kashmir in the year 1996, created hopes in the minds of people of a return to normalcy in the situation. The elections which were held under the massive presence of the Indian army were boycotted by the separatist groups, won by Farooq Abdullah did not do much for the restoration of people’s trust on the democratic process. Infiltrators were sent by Pakistan in the year 1999 in the Kargil region, thus increasing the volatility of Kashmir and threatening the peace in the region. Steps were initiated by the Indian army to retrieve the areas seized by Pakistani troops and infiltrators and a result of which is the battle of Kashmir. Kashmir: the fourth war between India and Pakistan, which was immensely criticized at world forums.

99 acres of land in Kashmir were decided to be given to the governing board of the Hindu Amarnath Shrine in the year 2008. This ignited the ethno-nationalist movement of Kashmir. The land controversy of Amarnath led to several demonstration in equal numbers and with equal intensity. Slogans of Azadi: “Hum Kya Chahtey? Azadi!” (We want freedom) and “Jeevey Jeevey Pakistan” (Long live Pakistan), echoed in the valley surrounded by oceans of green flags which made impossible the doubting of the deep-rooted fervour. The cancellation of land transfer decision to Amarnath was highly opposed by Hindu population of Jammu who in turn protested against the politicisation of their religious identity (Amarnath Issue). This led to agitation and wide-spread demand of Azadi – based on their religious beliefs. “Ethno-Nationalist leaders are more successful in mobilising sentiments for Azadi when Kashmiri Muslims perceive that the state is acting in their economic interests or sufficiently protecting their distinct religious identity”.

In June 2011, a fresh spring of mass agitation sparked and violence erupted all over the valley, symbols of government authorities targeted and the valley of Kashmir was paralysed with numerous strikes and lock-outs. The continuous violence and massacre of people set fire to the anger that developed among the people, who had lost their faith in the mainstream leaders. According to Balraj Puri, “Young people with their faces covered, told the media that they were illusioned by the current separatist leadership. It seems the mutual rivalries between groups, and the attitude of the Pakistan Government that patronised one group after the other, has eroded their support”.

A conclusion through the lenses of history

Whether Abdullah was India’s man still remains a question, but surely, he was not Pakistan’s man, and according to Abdullah, ‘Pakistan would swallow us up. They have tried it once. They would do it again’. The Indian stand has always been defending the territories of Kashmir and much to his dismay, Pandit Nehru’s regretted his decisions to approach United Nations for mediation which made the Kashmir issue an India-Pakistan issue, only to ignite the problems of peace loving kashmiris. What Indian government has been trying to do is not solving a problem but keeping it aside to avoid embarrassing global scenarios, for the past 70 years. But the current government (NDA– with its supreme ambassador Narendra Modi) has taken a very strong step to abrogate Article 370 and 35 A which provided the special statue to the state of Jammu and Kashmir. 

Although the Muslim world media such as Dawn and Al Jazeera, along with prominent foreign media houses like New York Times and BBC, have criticised New Delhi for imposing Hindutva over Kashmiri Muslims, causing immense pain and sufferings, has not taken into consideration that Kashmir is no state in India. The state of Jammu and Kashmir has Buddhists, Hindus, Sikhs and Muslims, where the Muslim population is residing only in the 15% area of the total Jammu and Kashmir. The problem such that the 15% land has 53% of the population and that land has created a situation of horror throughout the state. The Government did exactly correct by division of Jammu and Kashmir and Ladakh, and making the partly safer areas for human cohabitation more secure.

Moreover, the abolition of local form of governments and applying Central Laws by transformation of the State into Union Territory, has given ultimate authoritative powers on the Union Government. And as we have seen that the current NDA government, who was rejoiced the massive victory in General Elections, 2019, has shown its strong decisive actions on implication of GST (Goods and Services Tax)– a dynamic law reform, URI Surgical Strikes– a new face of India which enters and kills its enemies, Balakot Air Strikes– a hunt of terror through instigation of terror in the minds of Terrorism and Terrorist appeasers, Demonetization– a blow on Black Money and Parallel Economy, and NRC (National Registrar for Citizens)– India don’t want to add the burden of immigrants anymore, etc.

Even if the Leftist Media and Opposition parties have criticised the actions of the government the Narendra Modi government has the backing of Indian masses, as they find the greater good and strong leadership in it. Pakistan on the other hand is continuing with the same tactics of proxy wars, terrorist infiltrations, spreading the ideas of hate and misguiding the Kashmiri youth, and much to the apathy of logical thinking of the current generations of youngsters who are openly supporting terrorist activities, need to understand that Pakistan has never been theirs and won’t ever be. The POK region faces the worst forms of human right violations and commoners are tortured to the gravest extent. The Pakistani army and ISI– a counterpart of RAW in India, are still aiding, training, and nurturing the terrorists to hurt India every day. 

The 2018 Global Terror Index shows 8.181 ratings of Pakistan, which is only after Iraq, Afghanistan, Nigeria and Syria, the literacy rate is 58% as of 2018, and Pakistan jumped from 132nd rank to 153rd rank from 2008-2019, in terms of Peace, the current Pakistan Prime Minister Imran Khan stated the presence 30000-40000 terrorist in his country, and their decision to join USA and train Al-Qaeda, to breakdown Soviet Union a massive failure. Yet, we find Pakistani ceasefire violations daily, operations of terrorists, terror launchpads, provocative speeches from Pakistani Ministers and Prime Minister to put oil on fire, and a fire which they have aired since ages in Kashmir.

The Hurriyat has done what? They didn’t bring any solutions and peace in the scenario either, instead they have provoked the Kashmiri masses for Jihad against Indian government. The great deal of poverty and economic backwardness in the State of Jammu and Kashmir are the effects of the strikes and agitation created by the leaders of Hurriyat Conference– who enjoy lavish lives, protection from Indian Government, with their children studying and residing in foreign lands, and their provocation has led to massive unrest in the region and Indian government forced to use force to maintain law and order. Yes, military action is not what can bring trust and faith in the minds of people, but martial law is only applied in such sensitive areas where some miscreants are trying to instigate violence. 

Kashmir is a part of India and the best solution for the people is to consider and understand that it is India who has progressed in the ranks of world and is aiming for a 5 Trillion economy in future, and not Pakistan which as in the verge of getting Blacklisted by the FATF (Financial Action Task Force), for its aiding habits in creation of terror and terrorists in the Asian region. It’s not that we Indians don’t love Kashmiris or we appreciate the State to be in a political mess, instead we love Kashmir and its culture and would be better improving the economy and representation of Kashmir as the pride of India. The proud Kashmiris have suffered a lot and it is evident enough from the layers of history that aggression has never reached to an ultimate peace and religious aggression and brainwash brought only destruction to the lives of those propagating and acting on it, and also on the people avoiding and ignoring such intentions. It is well understandable that using pellet guns and imposing martial law cannot bring the faith, but when you have been misguided and misguided because of your own actions and inactions, you need to give the government some time to bring back normalcy!

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