This article has been written by Diva Rai, a student of Symbiosis Law School, Noida.

What is Waste Trafficking?

Illegal exports of waste are known as trafficking in waste and, when engaged, have a significant adverse effect on sustainable resource management and effectiveness in recycling, as well as on the environment and human health. In addition, exporting waste for unhealthy and unacceptable therapy overseas rather than complying with the laws generates an uneven playing field that impairs sound market processes.

Developed and developing nations are becoming increasingly involved in waste trafficking. Some studies have already pointed out the effects of this type of activity on the environment, financial and social. Nevertheless, the nations that cross the obstacle between developing and advanced status are dealing with a significant problem.

Waste management is a demanding and difficult endeavor in all European nations, with significant consequences for human health and well-being, conservation of the environment, sustainability and economy. There are comprehensive legal frameworks that govern waste management, established primarily on the grounds of environmental criteria. Compliance with these regulations has resulted in important advancement; however, concerns stay about the potential health effects of waste circulation, management and disposal, particularly with regard to casual procedures and outdated techniques.

Introduction

Illegal exports of waste are known as waste trafficking and, as shown above, have a major adverse effect on sustainable resource management and effectiveness in recycling, as well as on the environment and human health. In addition, exporting waste for unhealthy and unacceptable therapy overseas rather than complying with the laws generates an uneven playing field that impairs sound market processes. Finally, unsuccessful waste handling will undoubtedly adversely affect the waste management sector’s reputation and credibility.

The implementation of waste trafficking is organizationally complicated and suffers from the absence of adequate information and the difficulty in determining whether a waste shipment is to be defined as illegal or not but it is very essential to discover methods to deal effectively with waste trafficking.

Handling puts recyclers and citizens residing near the locations at risk for their health. In addition, by contaminating land, water and ecosystems, incorrect handling also leads damage to people residing further away from the locations and the environment. In relation to the imminent threats to the environment and human health mentioned above, bad waste management, particularly the use of inadequate recycling and retrieval techniques, implies bad management of resources and the loss of precious resources, which will certainly add to the depletion of the natural resources of our planet.

In addition, exporting waste for unhealthy and unacceptable therapy overseas rather than complying with the laws generates an uneven playing field that impairs sound market processes. This provides an unfair economic advantage over soundly based and environmentally conscientious waste manufacturers and waste executives to irresponsible waste manufacturers and questionable waste brokers and processors. It is very probable that the skewed market processes will delay or hinder the establishment of equipment and infrastructure required for adequate solid waste management worldwide.

Impact

The worldwide recycling markets are helping to restore enormous amounts of products. However, recycling and restoration operations are carried out in most developing nations by low-end means such as crude recycling at relatively low returns in the backyard. Such treatment often leads severe damage to the environment, human health, society and the economy.

To avoid the undesirable impacts on the environment, human health and legislation has been introduced on a global as well as regional and national level. On a global level, the Basel Convention on the Control of Transboundary Movements and Disposal of Hazardous Wastes (EU 1993) and the OECD Council Decision on the Control of Transboundary Movements of Waste Destined for Recovery Operations (OECD 1992) govern transboundary waste movements.

Exports of waste from the European Union are controlled by the Regulation on the Supervision and Control of Waste Shipments within, within and outside the European Community (259/93/EEC) (EU 1993a), often referred to as the ‘ European Waste Shipments Regulation, and regulations on the import and export of dangerous waste can be discovered in Resource Conservation and Recovery Act.

A study by IMPEL (the European Union Network for the Implementation and Enforcement of Environmental Law) proposed that up to 85% of non-hazardous waste imported from the European Union should be delivered illegally or in non-compliance with legislation. Irregularities include, but are not limited to, the use of inaccurate classification, false classification of waste products or unchecked items as reusable products, and other types of fraudulent declarations of delivery (IMPEL 2005).

Irregularities include, but are not limited to, the use of inaccurate classification, false classification of waste products or unchecked items as reusable products and other types of fraudulent declarations of delivery (IMPEL 2005).

In addition, Greenpeace (2010) revealed that 94 attempted or real instances of illegal exports of a total of 10 million tonnes of hazardous waste were recognized between 1988 and 1994, and Massari and Monzini (2004) reported illegal exports of hazardous waste from Italy to Romania, the Black Sea region, Lebanon and several African nations, including Somalia and Mozambique.

The organization of anti-waste trafficking enforcement measures differs extensively from nation to nation. Various administrative structures in different states can explain the differences to a large extent and thus vary competencies and jurisdictional scope for the organizations involved. However, it is generally possible to identify three kinds of organizations or officials engaged in enforcing transboundary waste shipments (IMPEL 2006). These are:

• Environmental Inspectorates, mostly organized within the Ministry of Environment
• Police Departments, mostly organized within the Ministry of Internal Affairs
• Customs, mostly organized within the Ministry of Finance.

The division of competencies and duties between these three kinds of organization varies from nation to nation. The primary responsibility for enforcement can be put in any of the organizational classifications and distinct agreements exist in distinct nations in practice. The degree of accountability sharing and effectiveness among skilled officials varies from nation to country (IMPEL 2006).

There are also variations in the degree of centralization. Some nations and authority forms are highly centralized, while others demonstrate a high degree of decentralization with significant independence and decision-making powers delegated to regional and local authorities. Cooperation between the concerned organizations, either on a case-by-case basis or through more official contracts such as memoranda of comprehension, takes place willingly in most nations.

Challenges

IMPEL reports (2005, 2006) highlight several obstacles to efficient enforcement of the laws.

Today, most enforcement operations are reactive in nature and depend on collaboration in a number of nations between environmental organizations, customs and police networks. Such collaboration still appears to be partially restricted in some of the organizations due to absence of priority, interest or ability. In addition, it is discovered that efficient data and intelligence collection, use and exchange are crucial for better and more efficient enforcement.

Because it requires transnational and cross-organizational collaboration, delivering the intelligence material required is an enormous challenge. All in all, it is necessary to involve a big amount of performers, most likely with distinct opinions of an intelligence organization, the use of intelligence material, secrecy and other problems linked to intelligence organizations. Finally, IMPEL (2006) recognized the absence of adequate coordination and resource allocation among various domestic officials as one of the primary bottlenecks for effective and efficient enforcement of the transboundary shipment of waste laws.

In relation to these organizational difficulties outlined in order to perform a successful inspection and to be able to conclude whether a certain shipment is illegal or not, inspectors must be able to determine whether: the shipped material must be categorized as a waste or as a product, a classification that is particularly difficult to achieve when it comes to distinguishing between end-of-life products.

The ISWA Position on Waste Trafficking

The International Solid Waste Association (ISWA) is an global non-profit organization operating in the public interest with the primary goal of promoting and developing professional waste management globally for a sustainable society and since the organization has no legislative or law enforcement authorities and its members are registered to contribute to the voluntary organization ISWA generated a waste trafficking position paper (ISWA 2011).

The position article indicated that ISWA views waste trafficking as a truly global criminal action that harms human health and the environment as well as society, both through the impacts directly linked to unsuccessful waste processing, but also by impairing sound market processes that hinder the establishment of the infrastructure required for sound waste management. Moreover, waste trafficking seriously damages the waste management sector’s reputation and credibility and hinders the growth of a worldwide network of resource management.

ISWA therefore considers the battle against waste trafficking to be essential and needs to be fully integrated as a main element in establishing a sound, worldwide resource and solid waste management system.

Measures to be taken

Ideally, the most efficient way to decrease the hazards associated with waste trafficking in the long term is to simultaneously decrease the likelihood of unsuccessful waste handling and guarantee financially and environmentally sound resource use in the recipient nations. To accomplish this, it is necessary to strengthen the environmental laws and enforcement capabilities in the receiving nations.

In addition, extra investments must be made in and growth of waste management infrastructure, primarily in the form of suitable treatment and recycling equipment, and know-how in the management of domestic waste.

However, such capacity construction is time consuming and as long as the infrastructure, laws and enforcement capacities in the recipient nations have not achieved the level that offers the means needed to ensure sound handling and treatment, responsibility for ensuring sound and eco friendly waste processing and for stopping waste trafficking must be laid down The effective strategy to this assignment is to follow two parallel lines of operations that are supposed to decrease the incidence and the impacts of waste trafficking operations concurrently.

It is thought that a vast majority of all waste manufacturers behave in good faith, but they are faced with complexity in determining what should be the most suitable way to fulfill their commitments. Criminals and criminal organizations are therefore willing to take benefit of this complexity and the absence of understanding or care of manufacturers. Furthermore, the complexity of the current legislation and regulations, as well as complex environmental and customs administrative processes, could lead to unintended illegal waste processing and export.

Finally, it can be difficult to differentiate between a severe waste handler or broker and a questionable one engaged in illegal operations for a waste producer. Knowledgeable and vigilant waste manufacturers with a strong knowledge of the legislation and administrative processes in place that require adequate handling of their waste and can readily differentiate between severe and questionable waste managers are less likely to put their waste in the hands of criminal organizations than less knowledgeable and knowledgeable manufacturers. Enabling waste manufacturers is therefore a significant step in decreasing the quantity of waste illegally exported by making it simpler to do the correct thing.

Despite the reality that nearly all waste manufacturers are acting in good faith, there are still deliberately involved criminals and criminal organizations engaged in and benefiting from operations linked to waste trafficking and waste trafficking. Basically, making it more difficult to do wrong is the same as making their work simpler for enforcement organizations.

Conclusion

It is obvious that there are possibilities as well as threats to worldwide trade and waste motion. If treated properly, it is possible to recover and reintroduce big quantities of precious secondary raw materials into industrial resource flows. If not, there may be risk to the environment and human health and the loss of precious assets. Since most OECD countries have the ability to manage their waste in a sustainable manner, the primary challenge is the waste that is either produced or exported to developing nations, where inadequate legislative and physical environmental infrastructure results in crude handling and low-yielding recycling processes.

Long-term hazards associated with waste handling in developing nations can be decreased by enhancing environmental regulations and enforcement capabilities as well as creating the infrastructure for physical waste management in these nations. Such procedures, however, take time. Meanwhile, the responsibility to secure worldwide sound and eco friendly exports of reusable products, secondary raw materials and other kinds of waste must be assigned to the exporting nations in collaboration with the appropriate global bodies.

The implementation of global legislation such as the Basel Convention and regional legislation such as the European Waste Shipments Regulation has already recognized such an obligation. Despite the laws in place, however, big quantities of waste are illegally exported to developing nations from OECD nations. Some of the violations may be clarified by unintentionally violating the law by waste transporters, but a big percentage of illegal exports are thought to be the consequence of deliberately and continually committed waste trafficking.

Since waste trafficking is a genuinely global problem, efficient preventive measures must be based on global collaboration, based on intelligence, cross-organizational and cross-functional collaboration. The good strategy to achieving this mission is to follow two parallel lines of operations that are supposed to decrease the incidence as well as the impacts of waste trafficking operations at the same moment: making it easy to do what is correct and making it difficult to do wrong at the same moment. Together with environmental agencies and law enforcement organizations, the waste management sector has a significant role to play in this process.

Finally, it is essential to identify once and for all that waste trafficking is a criminal action and that people and organizations engaged in the activity of waste trafficking are criminals and should therefore be treated as such.

Ideally, the deepest way to decrease the hazards associated with waste trafficking in the long term is to simultaneously decrease the likelihood of unsuitable waste handling and guarantee financially and environmentally sound use of resources in the recipient nations. Such capacity building, however, is time consuming and, in the meantime, the responsibility to ensure sound and eco friendly waste handling and to prevent waste trafficking must be placed on the exporting nations in cooperation with the appropriate global bodies.

The effective strategy to this assignment is to simultaneously follow two parallel lines of operations that are supposed to decrease the incidence as well as the impacts of waste trafficking operations; make it easier to do the correct thing while making it more difficult to do the wrong thing.

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This article is written by M.S. Sri Sai Kamalini, a fourth-year student currently pursuing B.A.LLB (Hons) in School of law, SASTRA. This is an exhaustive article which deals with the various provisions related to appointment and transfer of Judges.

Introduction

Judiciary in our country is the main pillar of democracy which helps in the smooth functioning of democracy. Judges are the main aspects of the judiciary. It is mandatory that the judges have to be efficient in order for the judiciary to be successful. There are many famous judges in our country who have brought out a lot of changes through their judgments which led to the overall development of this country. Judges are respected in our country and people have lots of faith and hopes on them, thus it is necessary to make sure that the appointment of judges is proper and not biased. Various provisions of our Indian Constitution deals with the appointment of Judges which has to be followed in every aspect of appointment.

Appointment of Judges in the District Courts

Qualifications

Article 233 of the Indian Constitution deals with the appointment of District Judges. According to this article, there are certain qualifications for a person to be appointed as a District Judge, they are:

• The person has to be in practice as an advocate or pleader for seven years or more;
• The person should not be in working in any other services of the Union or the State;
• The person has to be recommended by the High Court for employment.

Procedure for appointment

There are various procedures to be followed before the appointment of District Judges. According to Article 233, the appointment can be done only after consulting the Governor of the State and also the Judges of the High Court that is exercising jurisdiction in the State. Article 235 of the Indian Constitution provides powers to the High Courts to have control over the persons in the judicial service in the district court and other subordinate courts. Article 233-A validates the appointment of Judges in the district court that was made before the commencement of the Constitution (Twentieth Amendment) Act, 1966 and they are held to be valid even though they are not in accordance with the provisions of Article 233 and Article 235.

Appointment of Judges in the High Courts

Qualifications

There are certain qualifications which have to be fulfilled in order to appoint a person as a judge in the High Courts. The qualifications regarding the appointment are provided in Article 217. According to the Article,

• The person appointed must be a citizen of India;
• The person appointed should have held a judicial office in the territory of India for at least ten years;
• The person appointed should have been an advocate in the High Court for at least ten years.

Procedure

Article 217 of the Indian Constitution provides the procedure regarding the appointment of judges in the High Courts. According to this Article,

• The judges of the High Courts can be appointed only by the warrant of the President and his seal;
• The appointment can be done only after consulting the Chief Justice of India and the Governor of the State;
• The appointment of Judges other than the Chief Justice can be done after consulting the Chief Justice of the High Court;
• The provisions under this article must be followed even while appointing the Additional Judges according to Article 224.
• The person can hold the office as a judge until he is sixty-two years old;
• The consultation must be very effective, that is all the necessary information about the person being recommended must be revealed and no information should be hidden in order to facilitate the appointment;
• The Judges appointed must take an oath before the Governor of the State according to Article 219. The oath must be according to the form that is provided for the purpose in the Third Schedule.

Salary for the Judges appointed

Article 221 of the Indian Constitution provides various provisions regarding the salaries of High Court Judges. The salaries shall be determined by the Parliament by law and until the provision on the behalf is made, the salaries provided in the Second schedule must be followed. The article also says that the judges are entitled to receive pension and allowances which is decided by the Parliament and it varies from time to time.

Procedure for appointment of additional and acting judges

The appointment of additional judges is governed by Article 224 of the Indian Constitution. The President has the power to appoint additional judges. The State Government should obtain the permission and sanction of Central Government in order to create a post for additional judges and for appointing additional judges. Article 224 also deals with the appointment of acting judges. They are appointed for a period of three months. The members of the bar are not preferred for the appointment.

Appointment of Judges in the Supreme Court

Procedure

There are various procedures for the appointment of Judges in the Supreme Court. The appointment is governed by various provisions in the Indian Constitution. Article 124 of the Indian Constitution deals with the appointment of Chief Justice and Judges of the Supreme Court. The collegium system is still followed for the appointment of the Judges. Article 124 of the Constitution says only seven judges can be appointed in the Supreme Court and the appointment can be increased when the Parliament deems it to be necessary. The President has the power to appoint Judges after consulting the Chief Justice of India, the other Judges of the Supreme Court and also in certain cases other judges of the High Court. The Judges can hold office until they attain 65 years of age. Article 127 of the Indian Constitution deals with the appointment of ad-hoc judges in the Supreme Court. 

Qualification

Article 124 of the Indian Constitution provides various qualifications which have to be satisfied for the appointment. The person who satisfies all these necessary qualifications is only recommended. They are:

• The recommended person must be a citizen of India;
• They should not be above 65 years of age;
• They must have been a judge of one or more High courts continuously for five years;
• They must have been an advocate in the high court for at least ten years;
• The recommended person must be a distinguished jurist in the opinion of the President.

Salary

The salaries of the Supreme Court judges is determined according to Article 125 of the Indian Constitution. The salary provided to the Supreme Court judges is high compared to the High Courts. The salary is determined by the Parliament by law and if provisions are not made clear the salary mentioned in the second schedule must be provided.

Appointment of acting Chief Justice and Ad Hoc judges

Article 126 of the Indian Constitution deals with the appointment of acting Chief Justice. The President can appoint other judges of this court as acting Chief Justice when the office of Chief Justice is vacant or they are unable to perform their duties due to various issues like health issues. Article 127 deals with the appointment of Ad Hoc judges. According to this Article, Ad Hoc judges can be appointed in various situations like when the quorum of the Judges of the Supreme Court are not available to hold or continue any session of the Court, then it is the duty of the Chief Justice to appoint Ad hoc judges with the consent of the President of India. 

Transfer of Judges

Transfer of Judges in the High Court

Article 222 of the Indian Constitution provides the transfer of Judges from one High Court to another. The same procedure is also followed even for the transfer of Chief Justice. The President has the power to transfer the Judges from one High Court to another. This transfer must be made only after consulting the Chief Justice. There is also a provision for providing a compensatory allowance to the Judges who are transferred in addition to their salary.

Landmark Judgments 

S.P Gupta v Union of India

Several writ petitions were filed in the various High Courts regarding the appointment of High Court Judges as well as the Supreme Court judges in the form of public interest litigation. These petitions were transferred to the Supreme Court using suo moto cognizance. The main issue was to decide whose opinion in the collegium should be given primary importance while appointing the judges. The majority opinion was that “the opinions of Chief Justice of India and opinions of the Chief Justice of High Court were merely consultative and that power of appointment solely resides in the Central Government ”. 

The meaning of the word consultation was also discussed in the case. The word consultation mentioned in Article 124 and Article 217 in relation to all consultees and final decision in the matter was left to the Central executive. The majority took an extremely literal and positivistic view of Article 217. The central government even after this judgment followed the old practice and no judge was appointed without the name being cleared by the Chief Justice of India.

Supreme Court Advocates on record association v. Union of India

This case was a landmark judgment which constituted a bench of nine judges. This case is popularly known as the Second Judges case. The main question that was decided was whether the independence of the judiciary is the basic feature of the constitution. The Supreme Court Advocates-on-Record Association and Senior Advocates filed writ petitions before the Supreme Court which questioned the constitutionality of the 99th Amendment and the NJAC Act. The petitions accused that the NJAC violated the basic structure of the Constitution by compromising the judiciary’s independence. The majority verdict the Chief Justice has the power to appoint and transfer Judges. The Chief Justice of India needs to consult only two senior-most judges during the time of appointment.

The first major issue which was in question was the meaning of the term “consultation” which is present in Article 124. The majority came to a conclusion that it means an “integrated, participatory and consultative process”. This leads to complete discharge of constitutional obligations on the part of constitutional functionaries. Various methods have been used by the Judges in the case to establish that “consultation” means occurrence or primacy notably among which are” The Chief Justice of India as a ‘PaterFamilias’ would be competent enough and has the best qualities to judge and differentiating the Indian constitution with other constitutions, our constitution does not vest absolute discretion in the hands of the executive. Hence, the Chief Justice of India cannot be considered as an inferior position.

In re Special Reference 1 of 1998

This is another famous case which decided various regarding the appointment of Judges. The main issue that was to be decided was whether the expression “consultation with the Chief Justice of India” which are mentioned in articles 217(1) and 222(1) requires consultation with a many Judges when the opinion of the Chief Justice of India is formed or does the single individual opinion of the Chief Justice of India constitute a valid consultation that comes under the meaning of the term “consultation” which is mentioned in the above said articles. The case also decided various other issues like whether any recommendations made by the Chief Justice of India without following the rules and the process of consultation are binding upon the Government of India.

It was held in the case that the expression “consultation with the Chief justice of India” in Articles 217(1) and 222(1) of the Constitution of India requires consultation with a majority of Judges in the formation of the opinion of the Chief Justice of India. The individual and personal opinion of the Chief Justice of India do not constitute a valid “consultation” which comes under the meaning of the term in the said Articles.

Conclusion

Judges are the most important part of the judiciary. It is important to ensure that the Judges are competent enough to handle various issues that arise every day. The appointment of Judges must be done properly and a lot of effort must be carried out while selecting the Judges. The Judges should not be transferred unnecessarily and the transfer must be done only when there is a proper reason. Judges should not be transferred for personal and political reasons. Thus the government and the judiciary must consider the appointment of Judges as a very important process and a lot of care must be taken.

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This article is written by Shristi Suman, a second-year student of Symbiosis Law School, Hyderabad. In this article, the importance of the right to self-determination has been discussed.

Introduction

The right to self-determination refers to the right of an individual to determine his own destiny. The right allows people to choose their own political status and to determine their own form of economic, cultural and social development. Exercise of this right can result in a variety of different outcomes ranging from political independence to full integration within a state. The importance of the right lies in the right of people to make a choice. In practice, however, the possible outcome of the exercise of self-determination often determines the attitude of governments towards the actual claim by a person or nation. Nevertheless, the right to self-determination is a right that is recognized in international law as a right of the process belonging to people and not to states or governments.

What is Self-determination in International Law?

Article I of the Charter of the United Nations explains the principle of self-determination. The principle was first incorporated under the 1941 Atlantic Charter and the Dumbarton Oaks proposals which subsequently evolved into the United Nations Charter. Its inclusion in the United Nations Charter marks the universal recognition of the principle of self-determination as a fundamental to the maintenance of friendly relations and peace among the states. It is a right which is recognized in the first article common to the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights which both entered into force in 1976. Paragraph 1 of this Article provides that every person has the right to self-determination. By virtue of the said right, people can freely determine their own political status and freely pursue their economic, social and cultural development.

Criteria for the right to self-determination

It can be said that an individual has realized his right to self-determination when he either:

(1) establishes a sovereign and independent state; 

(2) freely associates with another state; or

(3) have freely integrated with another state after expressing their will to do so. 

The definition of realization of self-determination was confirmed in the Declaration of Friendly Relations.

Instruments protecting the right to self-determination

The right to self-determination of the people is also recognized under other international and regional instruments. The Declaration of Principles of International Law Concerning Friendly Relations and Co-operation among States adopted by the United Nations General Assembly in 1970, the Helsinki Final Act adopted by the Conference on Security and Co-operation in Europe in the year 1975, the African Charter of Human and Peoples Rights of 1981, the CSCE Charter of Paris for a New Europe adopted in the year 1990, and the Vienna Declaration and Programme of Action of 1993 also includes the concept of the right to self-determination. Furthermore, the scope and content of the right to self-determination have been elaborately explained by the United Nations Human Rights Committee.

The right to self-determination which has been included in the International Covenants on Human Rights and in the Vienna Declaration and Programme of Action emphasizes that the right to self-determination is an integral part of human rights law and it has a universal application. At the same time, the right of self-determination can be said to be a fundamental right which is necessary for the enjoyment of other human rights and fundamental freedoms which include their civil, political, economic, social and cultural rights.

Impact of Self-Determination Claims on Other Human Rights

Whenever self-determination is involved, a confusion between political goals and basic human rights norms, humanitarian issues evolve. There is also a potential impact of self-determination that it claims to encourage violent conflict. Although it is a truism, it also needs to be reiterated that more human rights are violated during the time of wars than at any other time. If the policymakers do not come to a better understanding of how to respond to the claims for self-determination, then such claims are likely to increase. It is also possible that the number of violent conflicts increases, and if the conflicts will increase then it will have a direct impact on the entire gamut of international human rights. At the same time, if human rights alone are concentrated upon then it is possible that all the human rights that we want to protect can be protected and violence can be curbed. By doing so it is not possible that the disputes over self-determination will disappear, but they can be resolved by the countries. 

If one creates a genuinely democratic rights-respecting regime, it is less likely that people will want to leave it. If, however, they do leave it, it is also more likely that any separation will occur peacefully. This approach suggests that even when self-determination is purportedly the issue, it is better to try to address denials of human rights before trying to address the denial of so-called self-determination. As a practical matter, a nongovernmental organization or human rights activist is more likely to be able to influence a government by focusing on respect for human rights than by entering the quagmire of self-determination and secession. I think that one is also more likely to protect what we would all agree are human rights – for example, physical integrity, use of language, and protection of culture without confusing those rights with political goals. Even if we may share some of the latter goals, it is essential to keep them distinct from the universally recognized and legally articulated provisions of international human rights law.

The right to self-determination and the anti-colonial struggle

By the virtue of Universal Declaration of Human Rights, any person can freely determine his/her political status and can pursue social, cultural and economic development. There was not much controversy when this principle was applied for the nations struggling for liberation at the time of colonial rule. After the post-war period, colonial rule had lost its morality, ethics and political legitimacy. Colonial rule handed over the independence to the colonies after violent or nonviolent protests and struggles made by the people living in the colonies for their right of self-determination. Till the time the colonial rule was in operation, the right of self-determination was synonymous with independence. In some countries, ethnic consciousness, inequitable growth, the concentration of political power or some other grievances of the people has encouraged them to seek for the right of self-determination. But after decolonization, the right of self-determination became controversial either through constitutional or non- constitutional means or through the support of a foreign power. In the contexts of decolonization and anti-racism movements in the twentieth century, the common aspect of human rights was the right to self-determination. 

The right to self-determination in relation to economic development

Article 1(2) of both covenants on Human Rights (1966) states that all people may freely dispose of their wealth for the benefit of International economic cooperation which is based on mutual benefit and International Law. People cannot be deprived of their own basis of profit. Every individual has a right to economic independence. Article 1 was drafted at that time when colonial rule was prevalent and people were struggling for independence. When people became independent they realized that only political independence is not enough and economic independence is also necessary for their growth and development. Without economic independence, political independence is of no use. Every individual has the right to exist in the real world. The right to self-determination is provided to the citizens in developing countries to achieve economic independence. The right to economic self-determination opened the gates for the national and international transformation of the developing countries both economically and socially. Every person is entitled to have the right to economic self-determination and political self-determination. If both these self-determination rights are not given to people, then once more the colonial rule will become prevalent in the country. The economic self-determination provides the ability to the people to have the mineral resources and usage of those minerals in their hands. This right has been dominated by other rights of self-determination for years. Economic self-determination is now also recognized as discourse on democratization, anti-colonialism, and liberalization. 

The right to self-determination in relation to cultural development 

Self-determination consists mainly of two components i.e. participation, and identity. Both Self-determination and cultural rights are exercised simultaneously. The most neglected human rights are cultural rights in the world. It is announced by the International Court of Justice that the right to people’s self-determination is an obligation to the entire community. Cultural rights came into existence primarily for the vulnerable groups, colonized and native people. It is for the groups whose right to self-determination is denied and suppressed by the world for several years. Any interpretation of the right to self-determination can be understood by referring to the Covenant of the League of Nations according to the peace treaties signed by the countries prior to the First World War. There was legal protection of cultural rights by the international community. The concept was moved only when the right to self-determination of cultural rights was being treated more than a political conception and human rights had not yet entered the public domain. The provisions made were not applicable for the entire world but it only covered Central and East Europe, and German and Ottoman territories. The International Commission of Jurists found the common object between the right to self-determination and protection of minorities. When the Cold War ended in 1989, then the exercise of the right to self-determination and the advantages of the minority population was reconsidered. Since several new States became a part of the international community by 1989, ICJ for the first time recognized the ‘right to self-determination beyond colonialism’. In the UN Minority Declaration, it is mentioned that self-determination is also for the people who belong to the minority in order to preserve and develop their group identity. UN Minority Declaration confirms non- discrimination and effective participation of people in both public and political life. It is also mentioned in the declaration that the aim of the right is to provide equal distribution of resources to minorities to achieve the aims of the development of their culture, language, religion, traditions, and customs. The declaration has taken certain measures to protect the cultural rights of minorities. 

Conclusion 

Self-determination is the ultimate safeguard protection of the identity of particular groups and the cultural rights of their members. The right to self-determination is a powerful tool in making human rights available in all mineral-rich countries. The right to self-determination faded during the 1960s and 1970s because of anti-colonialism movements but now it has been again established in democratic countries and should continue to survive as it is one of the most important tools for the progress of a democratic nation. The right to self-determination is a fundamental tool for understanding human rights. The attitude towards the right to self-determination changed rapidly after the Cold War between countries. The right to self-determination has the ability to implement and provide basic fundamental human rights to people and it also protects the natural resources of the country. It is also contended that if there would be a violation of the right to self-determination, it will also have adverse effects on other human rights and will in return diminish the people’s ability to enjoy the other basic human rights. Even after knowing the importance of the right to self-determination in one’s life, this right has still not taken its rightful place in the converse of human rights. The right to self-determination provides alternative theoretical justifications of using the minerals of the country in which there would be very less exploitation of minerals with maximum profits. The right to self-determination has the power to take legal action against governments or international sectors who are exploiting the resources of the countries in unreasonable ways. The right to self-determination paves the way for human rights which should not befall at the curb. The right to self-determination covers mainly three concepts: self-rule, anti-colonialism, and fulfillment of all human rights and also, the right to self-determination correct all the inequalities established at the time of colonialism. 

References

• https://nyujilp.org/wp-content/uploads/2013/02/39.2-Farmer.pdf
• https://www.researchgate.net/publication/329153669_The_basis_of_right_to_Self_determination
• https://www.peacepalacelibrary.nl/ebooks/files/335882129

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This article is written by Rajeev Awasthi, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Lawsikho.com. Here he discusses  “Acquihire transactions – instances where it is beneficial and key considerations for deal structuring”.

What is an acquihire transaction?

There has been a hiring spree in start-ups recently. Some of them follow the more conventional route of hiring through campus placement while some reach out to hiring agencies or head hunters for talent acquisition. Of late a majority have started adopting a more non-conventional route to gain access to talent via the acquihiring process. 

John F Coyle’s and Gregg D Polsky’s 2013 research paper published in the Duke Journal indicates how Tech giants like Alphabet and Facebook are engaged in acquiring start-up companies at a brisk pace.

Why would acquirers wish to pursue the route of acquihiring?

When one company acquires another to gain access to its talent rather than for its services, products or earning streams, the process is called as Acquihiring. In this one of its kind of acquisition, the target company’s products and services may or may not be of interest to the acquiring company. Evident as it is, the business of the acquired company, in this case, is shut down. More often than not, acquihiring occurs in companies that are either under stress or might go under stress. Typically, new employees are brought under the management of the new company and the assets are purchased. The company as a whole is not purchased nor is the corporate structure of the company to stay out of any liability. Some major benefits of acquiring such involve the preservation of dynamic capabilities, prevention of knowledge leaks and protection of innovation potential.

One major view behind acquihiring could be that these start-ups are founded by the younger generation of people in our society who are in their late 20’s or early 30’s. A majority of them are engineers who have brought in some disruptive technology into the business. So, the idea is to purchase a team of smart people who have worked together successfully hoping that they would augment and diversify the buyer’s business capabilities. Estonia or the Silicon Valley of Europe boasts of its many innovative start-ups which are supported and funded by their government.

Has acquihiring route been pursued by Indian firms?

In India some of the major e-commerce giants like Snapdeal, Flipkart and Jabong choose the route of acquihiring to strengthen their technical capabilities, workforce and integrating workforces to offer more innovative and end to end capabilities. Some of acquihiring we’ve seen in the Indian Industry includes:

Difference Acquiring and Acquihiring

• When you value the talent and wish to stay in the top of the game competing against your competitors and in a world where time is money. You would wish to pursue the route of Acquihire. To save going through a round of interview and hire a talent pool who have proven their skills and capabilities already and additionally work as a unit.
• When the acquirer values both: the business and the team as well as the associated business the process is called Acquiring. In case of Acquisition, the acquired firm’s liabilities are also taken up along with the workforce.

Industries vide popularity of Acquihiring

Quoting from John F Coyle’s and Gregg D Polsky’s 2013 research paper published in the Duke Journal. “Facebook, Google, and other leading technology companies in Silicon Valley have been buying start-up companies at a brisk pace. In many of these transactions, the buyer has little interest in acquiring the startup’s projects or assets. Instead, the buyer’s primary motivation is to hire some or all of the startup’s software engineers. After the transaction, the buyer redeploys the newly hired talent onto its existing projects and jettisons the startup’s projects. These acquisitions are known in the tech world as “acqui-hires.”

The Acquihiring process is a novel and the increasingly common way by which some of the most successful technology companies satisfy their intense demand for engineering talent at a much lower cost and faster pace. Mostly the startups that are in more nascent stages of seed funding are bought by larger players in the business. These startups fall prey to the larger players in the business as their business model is lucrative enough and mature to cater to their ambitions with sound capabilities in their workforce.

Let us look into the most recent acquihiring which has taken place in the recent past and learn from the perspectives shared by the decision-makers themselves who were involved in making these business decisions:

Shailesh Kumar Davey, vice president of Zoho Corporation which acquihired ePoise Systems was co-founded by Sachin Agrawal and Bishan Singh in 2013 says, “While making an acquisition, we look for the cultural fit as well as the product and technology fit.  Zoho offers Zoho Recruit and Zoho People, products in the HR space. ePoise technology may get used in these products.” ePoise was a Bengaluru based startup offering niche services such as automated hiring software products along with candidate background verification, screening and automated interview services to mass recruiting companies.

Sanjeev Tyagi, Head of Ericsson R&D Bengaluru told PTI that Ericsson started India wing of Global Artificial Intelligence Accelerator (GAIA) in 2018 to create an open-source solution for modernizing telecom network, using machine learning and Artificial Intelligence. “We are looking at both organic hiring, one by one through recruitment of the market, as well as what you might call as inorganic, which is more through acquisitions and acquihires (acquiring only talents). One such company that we have acquired is Niche AI.” Mr. Tyagi further ads that harmonizing features like AI, ML and IoT is the way forward in the telecom and entertainment industry. He also stresses upon self-organizing, self-healing and self-governing networks can be achieved through AI and ML. Without disclosing many details Mr. Tyagi says that some avenues which the board does look into while evaluating a company for acquihiring are size of the company, capabilities offered, the core competence of the company, cultural fitness and above everything else the engineering team. 

Finally, as Ravi Gururaj who is the chair for Nasscom Product Council puts it, More often than not Technology is leveraged but often it is as well discarded. What actually catalyzes the deal is the talent and not just the underlying innovative technology or the products themselves.

The Deal structure that is followed

The acquihire arrangement is a clubbed version of an Employment Agreement, an  Intellectual Property Agreement and an Asset Transfer Agreement:

• Mostly the settlements with investors are done in cash. 
• The route of ESOP’s and near-term cashout or a mix of both is agreed with the employees who are acquihired. There may also be some form of bonus or earnouts as a retention mechanism. The clause in Employment Agreements should have provisions for share vesting and the minimum retention period of such employees in the company in lieu of availing such benefits.
• Investors of an acquihired company usually receive depressed returns.
• Yet it is most imperative for the acquirer to assess the integration cost in advance.
• Although not necessary that this arrangement will be entered and chiefly depends upon the acquirer’s discretion of purchasing specific assets of acquirer’s interest in the arrangement.
• The work produced by the team is covered under the Intellectual property Agreement. This becomes imperative along with a non-compete clause if the work performed by the upcoming team will be in similar technologies or some more disruptive new technologies.

If the acquired company is privately listed company, it is not essential for the acquirer to acquire its shares. However, this largely depends on any stamp duty or tax benefit for the companies involved.

The target company should not have any outstanding debts or they should be paid by the time it is getting acquired. If not repaid for any reason it should be brought to acquirer’s knowledge. In such cases either the acquirer should agree to repay such outstanding debts or the promoters should ensure to repay them. 

In some scenarios, the technology from the acquired company can be roped in based on acquirer’s decision and the arrangement so entered. This can be done by entering into a simple assignment contract which might or might not require board members and shareholders’ approval. This depends on what is covered in the Shareholders Agreement and the AoA of the company.

Conclusion

Some very basic due-diligence provisions should always be followed about the culture, business structure, financials, reputation of the company and other supporting documents. The most mandatory check though is to go through existing employment agreements and AoA of the target company. When we assess the cost-benefit analysis we find this type of transaction is most economical and beneficial to get into as we are acquiring a workforce which has proven its skills and capability so the training cost is saved enormously and since they’ve all worked together it also serves as a positive factor to help them transition into the new work environment and culture. Although it always does not happen to be merry as in some cases the new venture and its goals could not lie in ambitions of some people and they might have a different career map and trajectory that they wish to achieve. The due diligence should also involve that the acquiring organization management does keep this in mind and do their part of due diligence and pick these red flags in advance. The employment terms and agreements should cover all possible threats such as non compete and other important clauses which we discussed above. All in all the Acquihiring process is a most efficient way to organize their goals for bigger MNC’s and though it did not get much appreciation earlier we do see it getting the required meritorious attention now because of the possibilities it provides and the win-win for all the parties involved.

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

The post Acquihire transactions – Instances where it is beneficial and key considerations for Deal Structuring appeared first on iPleaders.

This article is written by Rajeev Awasthi, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Lawsikho.com. Here he discusses “Indigo dispute: How can shareholders agreement clauses create a rift between founders?”.

Introduction

As per the IATA data, Aviation in India is broadly divided into civil and military aviation and is the fastest-growing aviation market in the world. One such airline carrier in the civil aviation space is Indigo airlines which through its cheap carrier cost is the most loved airline in India. The aviation industry data testifies to the fact that Indigo commands almost half of India’s domestic market especially after the Jet airways saga and with which most customers forego their jet miles program Indigo became their most preferable option both because of the rates on offer and complemented by its services.

Indigo Airlines was founded by Mr. Rahul Bhatia, the Promoter and a Non-Executive Director of Indigo and also the Group Managing Director of InterGlobe Enterprises along with Mr. Rakesh Gangwal, Promoter and Non-Executive Director of Indigo.

Shareholders’ Agreement

For the non-lawyers like me and who have had no experience getting into one such arrangement:

What exactly is a shareholder’s agreement (“SHA”)?

SHA is an arrangement in which a company’s shareholders get into prior to the inception of the business. It sketches out and outlines the way their day to day business should be operated and outlines shareholders‘ rights and obligations. It is the SHA which ensures that shareholders are treated fairly and that their rights are protected. However, it is of utmost importance that the parties getting into this arrangement or any such Agreement for that matter take legal opinion and make an able decision as an Agreement becomes a Legal obligation which is binding upon you. Further down we’ll see how the terms covered under the SHA entered between the two partners who started Indigo Airlines became a bone of contention and soured a long time-tested relationship.

“Multiple promoters in an enterprise may have structural dissonance built into their gene”

According to Harvard Business School professor and author of The Founder’s Dilemma Noam Wasserman, data suggests that there is a 65% chance of failure of high-potential startups due to co-founders falling out. 

This could be due to a plethora of reasons which range from business strategy, differences over money, and leadership style. There is a good probability of such differences to get compounded by the very nature of such partnerships. As stated above while getting into such partnership arrangements it is imperative that we understand clearly the very construct of the agreement and if any terms and conditions or clauses confer upon any special rights to any parties involved within the arrangement even if both parties hold same control over the underlying company or security. This could well sow the seeds of future discord.

It is a story which we’ve seen so often in the past. The recent first of its kind hostile takeover of Mindtree Ltd by L&T in India is an area we witnessed this dilemma. Café Coffee Day founder Late V.G. Siddhartha, who invested $8 million in Mindtree Ltd as an investment venue when the company was formed in 1999. A happily invested promoter and minding his own business he let other promoters call the shots. The Mindtree board and promoters never in their worst nightmares envisaged a scenario where one of their own would bail out on them. Ignorant about what the future held they never provisioned for the kind of share structure that would have enabled them to save their company.

Companies being run by siblings as partners are no exception to such fierce internecine ‘Game of Thrones’. The Singh brothers of Ranbaxy are a mishap most close to thoughts. Why leave alone the most messed up tussle between Raymond’s founder Mr. Vijaypat Singhania and his son the group chairman Gautam Singhania. The above incidents lament that a blood relationship leaves no guarantee when it comes to assessing the reins and control of the business. Even in Yes Bank, even though the two founding partners Late Yash Kapoor and Rana Kapoor who had family ties, yet upon the former’s tragic death the feud over the board seat is a memory not lost.

The above examples indicate that enterprises with multiple promoters may have structural dissonance built into their framework.

Like any other relationship, constant working upon, trust and constant communication fuels the dynamics between the co-founder’s relationship. There needs to be a clear definition of the roles of each of the co-founders and the decision-making must rest with the one who’s been given that responsibility. Which is why a shareholders’ agreement laying down the ground rules of this relationship must govern the responsibilities and liabilities of individual partners, along with a mechanism for dispute resolution in case of discord needs to be agreed upon by both the parties upfront.

The beginning

In 2006 Mr Bhatia and Mr Gangwal, two highly savvy gentlemen each a pioneer in their Industry decide to embark upon a journey together in the Indian aviation Industry. This is when IndiGo, a low-cost carrier, which is India’s largest airline today with a fleet of 225 aircraft is born.

An arrangement is reached with each holding around 37 per cent in the company. Interglobe Aviation (“IGE”) in its statement said that the arrangement between the IGE Group and Mr Gangwal has been transparent right from its inception. The agreement was that IGE Group would be taking financial risk considering its history of having a positive approach to undertake riskier transaction which emanates through its entrepreneurial DNA. However, both Mr. Gangwal and IGE would share equal ownership structure in the company.

Fast forward, the company saw a period of more ups than downs and decided to go public launching its IPO in 2015. With this decision to go public a new shareholders’ agreement was entered into between Rakesh Gangwal and Rahul Bhatia which was to remain valid for four years until 2019. 

The recipe is the clauses within the Agreement

The agreement so entered in 2015 conferred on the founders:

• Right of First Refusal (RoFR) for each other’s shares in case one of them wanted to sell- The RoFR confers upon the non-selling shareholders the right to accept or refuse an offer by a selling shareholder with a third party buyer. Both the selling and the non-selling shareholders receive the same terms from the third-party buyer. The right also allows the non-selling shareholders to control the process of adding a new shareholder.
• The agreement also contained a ‘tag-along’ clause for the parties in the transaction- This clause provides a provision to the minor shareholders in the arrangement to ‘tag along‘ with a larger shareholder or group of shareholders if they find a buyer of their shares under the same offer price and arrangements as the major shareholder. The main aim of this provision is to ensure that the minor shareholders are not left behind if a major shareholder decides to exit the venture.
• Above everything else the SHA grants IGE power to appoint three out of the six directors of IndiGo:

1. appoint a managing director, 
2. chief executive and also 
3. to nominate a chairman as they see fit. 

• The agreement also binds Gangwal and his affiliates to vote with the IGE Group on the appointment of directors.

Like every other agreement, the Shareholding Agreement entered in this case between Mr. Gangwal and Mr. Bhatia too had an expiry date which was due to expire on the fourth anniversary of the (company’s IPO) launch i.e., in 2019. 

It is worth mentioning here that the provisions of ‘tag-along’ and RoFR clauses are also enshrined in the company’s constitutional document which is the Articles of Association (AoA). The binding terms within the SHA will cease in 2019 however, the clauses which provide the controlling rights in the operations of the business won’t as they are a part of the AoA. Under such circumstances, the AoA will override the SHA once it expires and the terms in the AoA will bind the two parties to the terms so entered unless they’re amended or have an expiry right in the AoA. Under the terms in the AoA the exiting promoter is obliged to notify the shareholders about a sale. The non-selling shareholders will have to exercise the ‘tag-along’ or the RoFR right within three business days of the receipt of the transfer notice.

The only way out here from providing such undue advantages to a party in the contract is to amend the constitutional document upon the expiry of the Agreement or, the AoA should specify such terms that upon the expiry of the SHA some of the provisions covered under AoA and SHA will be revised if required in the presence and agreement of all the parties who are part of the agreement. However, the articles can only be amended by a vote of shareholders who hold more than 75% shares.

The fiasco

Multiple contentious issues between the promoters, majorly pertaining to the growth strategy of the airline carrier have gradually built up over a span of time. Albeit, it was Bhatia’s last nail into the coffin decision to overrule Gangwal’s objections to around 600 engines purchased from CFM International, a French-US engine maker, which drew a line.

These differences unearthed to the public when Mr. Gangwal wrote to the Securities and Exchange Board of India (SEBI), raising concerns over corporate governance issues at Inter-globe Aviation (“IGA”) and related-party transactions (hereinafter, “RPT”) between the company and Mr. Bhatia owned Inter-globe Enterprise (“IGE”). 

The allegations made by Mr. Gangwal to SEBI in July, 2019 was followed by a written complain stating that the agreement between him and IGA and Mr. Bhatia is highly skewed towards Mr. Bhatia and it confers upon him the power to choose and appointment the chairman, most board directors and the top management executives.

The ministry U/s 206 (4) of the Companies Act, 2013 is evaluating whether the special privileges that is conferred upon Bhatia’s InterGlobe Enterprises Pvt. Ltd (IGE) through the terms under the shareholder agreement has ever led to any kind of deviation from corporate governance standards, especially on the independence of the audit committee. Section 26 provides powers for the ministry to call for information to inspect books and conduct inquiries. The MCA has ordered IGA for its comments on the charges of corporate governance lapse as indicated in Gangwal’s allegations to SEBI. The Registrar of Companies (RoC) which is in charge of Companies Act compliance wants to probe if the allegations of governance failure are true. Moreover, if such allegations are made by a major shareholder in the company it can’t be neglected by the regulatory authorities.

The allegations have been two-sided just like in any other bad-blood. Mr. Bhatia’s IGE claim that Mr. Gangwal’s only intent is to dilute the controlling rights of Mr. Bhatia through the baseless allegations. IGE further adds that raising the issues of RPT and corporate governance at the airline now is mere ‘smokescreen’ to hide his real intent.

Neither of the promoters intends to sell their stakes in the company as they foresee a substantial growth potential in a developing economy. IGA, however, have alleged that there is a possibility that Mr. Gangwal wants to dilute Mr. Bhatia’s controlling rights as that would help him fetch better value at a later date whence he wants to monetize his shareholding. The current holding pattern suggests that Mr. Bhatia and IGE together hold 38.23% stake in the company while, Mr. Gangwal along with his wife and a trust hold 36.65%.

Mr. Gangwal’s Allegations

Amongst many others the key concerns raised by Mr. Rakesh Gangwal are: 

1. The RPT between InterGlobe and Bhatia group entities which he sees as providing undue favours. The best-fit way to define it is as a corruption allegation. These entities in question offer a variety of services from ticketing to simulation training and crew accommodation to name a few. The value of these related-party transactions has increased from Rs 31 crore in FY2010 to almost 10 times in FY18, citing the company’s annual reports.
2. Unusual rights that give Bhatia control over the board and that have led to governance failures.

Gangwal alleges that a plethora of reasons for this corporate governance failure which includes but is not limited to providing retrospective approvals to contracts in some cases, lack to audit committee’s independence and lack of competitive bidding to procure suppliers for competitive pricing. 

The IGA board Chairman, M Damodaran, consulted EY for commissioning a review of RPTs. Gangwal has further questioned the scope of the review performed by EY and its independence and thoroughness. He also questioned why the EY report was not shared with the rest of the board but stayed only with the Chairman. Gangwal further claims EY found procedural irregularities in the RPTs which includes: 

1. RPTs which might have not been approved by the audit committee;
2. RPTs which might have been extended without audit committee approval;
3. RPTs that might have been executed before audit committee approval.

Gangwal’s letter to SEBI mentions that his group had proposed a different EGM resolution — which mandated the board to adopt new protocols for related party transactions. However, Mr. Bhatia’s group (InterGlobe Enterprises or IGE Group) countered that such resolution would have to be a special resolution requiring a 3/4th per cent vote to pass. Bhatia’s groups which hold 38 per cent shareholding could have blocked such a resolution.

Hence Gangwal is proposing that shareholders recommend to the board to adopt certain new protocols for RPTS.

The company’s Code of Conduct is enforceable upon all directors and senior management who need to adhere to it. IGA’s code states, among other things, that they should avoid transacting business with relatives or related parties and under circumstances that such business is unavoidable then it should be done with proper and full disclosure.

Mr. Bhatia’s Responses to Allegations

In response to Mr. Gangwal’s allegation addressing the board Mr. Bhatia said:

(i) Mr. Gangwal was generously allotted 50% equity 14 years ago and has since enjoyed full opportunity and advantaged from the situation;

(ii) He did not mind that the IGE Group was taking the entire economic risk, which at peak exposure (between redeemable preference shares, unsecured loans, and personal guarantees) was in excess of Rs 1,100 crore (almost six ) times the IGE Group’s contractual obligation of Rs 200 crore in the agreement with Mr. Gangwal);

(iii) Gangwal readily agreed to the fundamental proposition that the IGE Group will have control and make pragmatic risk-based decisions;

(iv) Gangwal further obliged himself to support the IGE Group in controlling the group through a voting rights agreement embedded in the AoA and SHA and of the Company which Gangwal was fully aware of the moment he signed the agreement;

(v) Overjoyed and opportunistically Mr. Gangwal (since he was aware of the business model and knew that he was going to make a ton of money) he actively participated in the IPO. In this stage he once again agreed that the IGE Group would retain control – a disclosure made in the prospectus;

(vi) Preferred to stay silent about any RPT issues for the past 13 years;

(vii) Did not raise any objections while signing and approving annual accounts;

(vii) now is when he chooses to dismiss the controlling rights and position of IGE group which were a part of agreement and company’s constitutional documents, terming them as “unusual”;

(viii) shied away from taking a position on the Board of a start-up being scared of liability in a highly regulated sector;

(ix) He then now claims to be a guardian of corporate governance.

Mr. Bhatia further clarified that the SHA was negotiated in 2006 and amended twice in 2015 as a precursor to the IPO to comply with statutory requirements. The IGE issued a statement in response to the allegations made by Mr. Gangwal stressing that he has failed to evidence a single instance where there was misuse of any rights in the SHA. IGE dismissed his allegations on accounts that they’re based on “whistleblowers who chose not to use the whistleblower mechanisms and procedures established by IndiGo”.

Settlement

CEO of IGA, Mr. Ronojoy Dutta through his email addressing the Indigo employees on September 2, expressed relief that the long-standing feud between Indigo promoters Rahul Bhatia and Rakesh Gangwal has been “satisfactorily sorted out” and the procedural changes were made to the policy to regulate the RPT, which has been approved unanimously by the board.

Reportedly, the issue was resolved at the Annual General Meeting held on August 27, which was followed by a subsequent board meeting on August 30. 

In the AGM it was also decided to expand the board to 10 members with four of its directors independent including a woman director.

Now then the Investors and market has its sigh of relief and we all expect the two promoters to show sagacity in ensuring the airline’s interests are protected.

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

The post Indigo dispute: How can shareholders’ agreement clauses create a rift between founders? appeared first on iPleaders.

This article is written by Rajeev Awasthi, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Lawsikho.com. Here he discusses ”First hostile takeover tussle in the Information Technology Industry in India”.

Introduction

Ever wondered what Anheuser Busch InBev and SABMiller, Arcelor and Mittal, Melrose and GKN, Vodafone and Mannesmann, Kraft (now, Mondelez) and Cadbury, RBS and Natwest have in common. Well, you guessed that right, these have all been time tested and formed due to the acquirer reaching out to the shareholders’ of the acquiree company directly and acquiring greater than or equal to fifty-one per cent stake or voting rights in the board of the acquired company. The channel of reaching out to the shareholders directly with the proposal of an open offer when the proposal is not accepted by the acquired companies board is termed as the ‘infamous’ hostile takeover. 

Since India’s economic liberalization in 1991, the Indian market has not witnessed many such hostile takeover attempts by listed companies. The term ‘hostile’ is associated with this type of takeover route as the bidders making tender offers opt to by-pass the negotiation channel with the target company’s board in order to seek control. Thus, this route carries with itself the threats of destabilizing the normal operations of the target company at any time, it also threatens the shareholders of the target company as well as the management. Hence, the need to regulate market control in the field of takeover is relatively high.

The Indian economy has witnessed several mergers and Acquisitions post Independence period. The Indian economy witnessed only a handful of M&A Takeovers prior to 1990s. The government devised ways to limit the concentration of economic power through the introduction of policies on balanced economic development and the introduction of Industrial Development and Regulation Act of 1951, Monopolistic and Restrictive Trade Practices, “MRTP” Act of 1969, Foreign Exchange Regulation, “FERA” Act of 1973 etc. The policies were stringent enough for the Indian economy to witness any hostile takeover of its kind. However, after liberalization in 1991 and with policies on decontrol and liberalization and the globalizing economy, the corporate sector witnessed a severe domestic and global competition. The period of recession saw a lot of corporate restructuring happening through M&A more so because of the fact that the organizations wanted to divest those areas of businesses which were not yielding profit and concentrate on the areas of business which yielded a profit. The M&A activity in India has seen some major mergers, acquisitions and/or, amalgamations in the past like Vodafone’s $11.1 bn acquisition of Hutchison Essar, India’s fourth-largest telecom operator. Tata Steel’s $13.2 bn acquisition of European steelmaker Corus was another major acquisition activity of 2007.

Regulatory Provisions in India to comply with during M&A

Adherence to compliance needs to be maintained with respect to the below regulations that have the statutory force of law and are equipped with penalty provisions for violation of any of them:

1. “Takeover Code” under the provisions of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Corporate Restructuring may be done by M&A, Spin-Off, Leveraged buyouts or through Hostile Takeover.
2. Code of Civil Procedure, 1908
3. Indian Trusts Act, 1882
4. SEBI (Prohibition of Insider Tradings) Regulation, 1992
5. Partnership Act, 1932

Behind the scene picture: David versus Goliath

(How pieces added up for the Indian IT Industry’s very first Hostile Takeover bid)

Understanding the David “Target” of the battle: Mindtree

• Date of Incorporation 05-Aug-1999
• Date of Listing 07-Mar-2007
• Listing Public (NSE, BSE)
• Headquarter Bengaluru, India
• Board Members and Directors

1. Krishnakumar Natarajan Executive Chairman
2. NS Parthasarathy Executive Vice Chairman
3. Akshaya Bhargava Independent Director
4. Manisha Girotra Independent Director
5. Apurva Purohit Independent Director
6. Pankaj Chandra Independent Director
7. Milind Sarwate Independent Director
8. Rostow Ravanan Managing Director & CEO
9. V G Siddhartha Non-Executive Director
10. Subroto Bagchi Non-Executive Director

• Founders:

1. Ashok Soota
2. Subroto Bagchi
3. Krishnakumar Natarajan
4. Parthasarathy NS
5. Scott Staples

• Revenue US$846.8 Million (FY 2017–18)
• Operating income US$107 Million (FY 2015–16)
• Net income US$62 Million (FY 2016–17)
• Number of employees 20,000 (FY 2018–19)
• Services:

IT, Business consulting and outsourcing in fields of e-commerce, mobile applications, cloud computing, digital transformation, data analytics, enterprise application integration and enterprise resource planning, with more than 339 active clients and 43 offices in over 17 countries, as of 31 July 2018.

(Source: Wiki Mindtree)

Understanding the Goliath “Acquirer” of the battle: L&T

Incorporated in 7-Feb-1946

Listing Public (NSE, BSE), GDR’s listed in LSE, LUX

Headquarter Mumbai, India

Board Members and Directors

1. 1. A.M. Naik Group Chairman
   2. S.N. Subrahmanyan MD & CEO
   3. R Shankar Raman CFO
   4. N Hariharan Company Secretary

Founders:

1. Henning Holck-Larsen,
2. Søren Kristian Toubro

Revenue US$17 billion (2017)

Operating income US$12 billion

Total Assets US$32 billion (2016)

Number of employees 307,053 (March 2018)

Services:

Real estate, Construction, Financial services, IT Services

Intent and Route

During a takeover, if the acquirer organization owns 25% of the target organization, it can make an offer to gain control. However, L&T is making a move for a hostile takeover of Mindtree by exploiting a loophole in section 3, clause 1 and section 4 of the Takeover Code of the SEBI and thereby announcing an open offer. 

According to the process laid out in the above section:

1. Those with more than or equal to 25% stake cannot take over a company unless they make an open offer to acquire the shares and make a public announcement.
2. Irrespective one holds or does not hold shares or voting rights, they can only take control of the company once a public announcement of an open offer is made to acquire those shares.

Using the above sections the takeover code permits L&T to make an open offer, without having to own 25% ownership in Mindtree.

Mindtree Current Shareholding Pattern: Click here (Dec 31, 2018)

Structuring the Deal

The way in which the deal has been structured is in itself very interesting as it involves complete takeover through:

1. share purchase agreement (20.32%)
2. Market purchases through the stockbroker (15%)
3. Open offer (31%)
4. L&T decided to not make a voluntary offer after having acquired VG Siddhartha’s stake. It instead decided to go ahead with the mandatory offer route through channelling additional purchases.

The above table shows the current shareholding pattern of Mindtree. On March 19 2019, L&T signed a deal to purchase 20.39% stake from VG Siddhartha the owner of Cafe Coffee Day at Rs. 980 per share and has also placed an order with its broker for the additional purchase of up to 15% of share capital in the market at Rs 980 per share. The share purchase agreement couple with the order L&T placed with the broker breached the 25% threshold and hence, L&T was mandated to make an open offer as prescribed in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation (3(1) and 4), 2011. Thus L&T additionally announced an open offer to the public shareholders of Mindtree to raise an additional 31% of the outstanding shares pricing them at Rs 980 per share and the deal amount to $1.6 bn. If this gamble from L&T works it will hold a majority of nearly 66% stake in Mindtree whilst the promoters of Mindtree together will hold 13.32%. Other institutional investors viz. Amansa Holdings, Nalanda India Fund, and Vanguard cumulatively hold 50.57%.

The bone of contention to the Board Members of Mindtree & the way forward

It’s now a battle to reach more than 51% holding and beyond to exercise a de jure control…

If we assess the entire scenario, it is evident that the root of the hostile takeover upsprung was due to the fact that the promoters kept a small chunk of the share and eventually VG Siddhartha accumulated a greater portion of the share capital. The board members of Mindtree met on March 20 to discuss if a buyback proposal of all paid equity shares could be considered to fend off the hostile takeover bid from L&T. The independent directors will be bound to think about all the stakeholders and not just the promoters who are averse to this takeover. This ain’t as easy as it sounds as this would require the shareholder approval via a special resolution that is two-thirds of the votes as an open offer has been announced. Siddhartha’s share purchase agreement with L&T will motivate him to vote against the buyback. The Companies Act allows a company to buy back a maximum of 10% of its capital. In case the special resolution passes the proposal, then they can buy up to 25%.

As per the existing norms and regulation that in case the promoter purchases more than 5% or any other buyer purchases more than 25% stake in any listed firm, an open offer is triggered. As such, to purchase another 26% stake the only channel is through an open offer. 

Since we are discussing the distribution of the number of shares held and L&T’s motive of achieving the golden figures of 25% and thereafter by open offer achieve 66% stake in Mindtree. It is worth noting the low percentage of shares held by the promoters 13.32% which may be sufficient to thwart a hostile bid.

The regulation requires the target to constitute a committee of independent directors since the promoters and management are always conflicting in the matters of takeovers. Such independent director committee will advise in the best interest of both the parties by weighing in the overall interest of the situation. The independent directors will reach out to the financial advisor to understand if the price offered by the acquirer to the shareholders of the target is fair and reasonable. The advice of the independent directors will only be advisory in nature and not binding but in the best interest of all.

The fiduciary duties laid out in Section 166 of the Companies Act will also be binding on the Directors (including members of the independent committee) of the target. Section 166(2) explicitly states that the independent directors should base their decision not only in the interest of the shareholders but also the other stakeholders which include the creditors, employees and customers. They should weigh in if the takeover is allowed to succeed, it should be beneficial in the long term interest of the company especially in this case where we have seen Mindtree has had a good client base across the globe and is a moral example of good corporate governance.

In case the board of directors in good faith have adopted a view that the hostile takeover offer is not beneficial for the shareholders, they can adopt the process of Revlon Rule and approach any other competitive bidder could be a white knight offering equally good pricing. These might come into play depending on what shape the L&T and Mindtree hostile takeover take.

Will there be a white knight in the fairy tale of Mindtree

The white knight defence route is permissible under the Takeover Regulations and this has been used in India in the past see here. The regulatory stance on white knight as permitted under the Regulation is that it doesn’t permit the target’s board to prevent a takeover but it provides a choice to the shareholders to choose the more favourable amongst the competing bidders.

According to this Livemint report, large private equity players like KKR and Baring had expressed their interest in Mindtree initially and there are hopes that they might emerge back in the competing offer against L&T’s bid as Mindtree’s white knight. However, as per the takeover regulation a competitive offer has up to fifteen days beginning March 19 to make its offer to the shareholders of Mindtree. The takeover code also requires the competing offer to be at least equal to the holding of the acquirer who makes the first public offer summed with the shares to be acquired by the first acquirer’s open offer. So, the more L&T acquires via the three strategies the greater the stake and the greater the challenge for the upcoming white knight (if any).

The reason for the golden figure to be set at 66%

The one-line answer is that it’s more than required holding for L&T to control Mindtree or even consolidate its earnings. L&T has about 16,000 crores in cash on its balance sheet invested in treasury products and earning a post-tax return of about 5%. L&T had decided to return around 9,000 crores back to shareholders via a share repurchase program or buyback which was not approved by the market regulator SEBI. Hence, when Siddhartha opted to divest his holding it presented the best way for L&T to achieve better ROE. At this point, L&T estimated that with an expense of 10,000 crores from its earnings it can achieve control over 66% of Mindtree which has a market cap tad shy of 16,000 crores.

This era may just belong to Goliath

On April 5 2019, the Competition Commission of India through a tweet approved L&T’s offer of claiming 66.15% ownership in Mindtree on a fully diluted basis, which is being seen as the first step to L&T’s success in its bid of the hostile takeover. L&T is now all set to approach the anti-trust authorities in the US and Germany where Mindtree operates. As for Mindtree, they have formed a body of their independent directors who are lead by Apurva Purohit. They are weighing in all the aspects of the ‘unsolicited’ offer looking into all the relevant facts, circumstances, data and provide an informed view, bearing in mind the interest of all stakeholders in the company. The independent director’s panel has roped in Khaitan and Co, and ICICI Securities as the independent advisors.

Conclusion

Though L&T’s chairman has provided an objective of creating an IT consulting and services giant through a merger of Mindtree, L&T Infotech Ltd, and L&T Engineering Services Ltd. The major theme in this case study which we need to think about was had VG Siddhartha’s holdings in the company not reached to the levels of being the single largest shareholder, even though he was not a member of the board or an independent director the story would not have escalated. Also, the holdings of the promoters in the case of Mindtree was too less when compared to the total outstanding shares available or those with FII’s. To end I would quote the management guru Peter Drucker, “Many problems cannot be solved; they have to be survived.”

Update: L&T was successful to carry out first of its kind hostile takeover of Mindtree. The acquirer was able to buy 31% additional stake through an open offer and gained a controlling stake by increasing its holding to 60%. The offer of 980 apiece shares of Mindtree was subscribed 1.2 times. The longer-term view of the chairman Mr. Naik is, he’s looking to make a software conglomerate by planning a merger between L&T Infotech and Mindtree after 2 financial years. Looking at the financials and technical’s of the company as of Feb 15, 2020 we see that Mindtree made a low on its stock prices of 652 INR on July 22, 2019, but post takeover it’s stock prices have been trading considerably over its 20d, 50d, and 100d exponential moving average. The stock closed at INR 959.9 on Feb 14, 2020, and was trading close to its 52-week high price of INR 995 which it touched on Apr 25, 2019. The price per equity share is 25.35 which are very good compared to its peers like TCS which has P/E of 24.95. The earnings per share are at 37.86 which is way above than the Software Industry P/E of 23.49. The company reported strong financials. The Income which grew from 5325 Cr. in Mar’18 to 7021.5 Cr.in Mar’19 i.e. 32% growth YoY. The diluted EPS also grew by 26% YoY. The current liabilities of the company went down from 958 Cr in Mar’18 to 855 Cr. In Mar’19. Overall the whole process of the takeover was not smooth but the account books and the market do see it very positively.

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 Jasmine Madaan, from Vivekananda Institute of Professional Studies(VIPS). This is an exhaustive article which deals with privileged communication between various protected relationships.”

Introduction

Watching the show ‘Suits’ introduced me to the concept of privileged communication, remember the famous reply of Harvey “I am bound by the Attorney-client privilege,” which is one of the protected relationships. Even if you haven’t watched Suits, it’s not a big deal. This article will provide a solid gist about privileged communication between various protected relationships, the extent of the right to privacy and the concept of privilege communication in different countries.

Definition

Privileged Communication refers to the confidential conversations or interactions between two parties who are in a legally recognized protected relationship. The information cannot be leaked to any third party, not even in the Court. Law can never force an individual or a corporation to disclose the contents of privileged communications.  

Illustration: 

• ‘A’, the husband and ‘B’, the wife are undergoing a rough patch in their matrimonial life. 
• ‘A’ decides to transfer all his property to C via his will and only his lawyer knows about this. If B ever asks A’s lawyer to disclose it, the lawyer can’t tell as it is a privileged communication. 
• He can tell only if A gives consent to do so or A himself discloses to a third party.

Professional communication between a lawyer and a client (Attorney-client privilege: Section 126 of the Indian Evidence Act

It is a statutory obligation under Section 126 of the Indian Evidence Act for an advocate to not disclose without the consent of the client any-

1. communication to him by the client or vice versa,

2. contents or conditions of a document,

3. the advice given to the client,

which was obtained or given in the course and for the ‘purpose of such employment’. This phrase means that no privilege attaches to communication to an attorney consulted as a friend. This obligation continues even after employment has ceased. This encapsulates the rule of “once privileged always privileged”.

The privilege under Section 126 is subject to certain exceptions i.e. under the following conditions communication can be disclosed:

1. When the communication was made in furtherance of an illegal purpose;  

2. When the attorney gets to know that a crime or fraud has been committed since employment began;

3. When the client gives consent; 

4. When the information falls into the hands of a third party;

5. When a lawyer sues the client for professional purpose.

Section 127 of the Evidence Act states that Section 126 applies to- 

• Interpreters
• Clerks or servants of barristers
• Pleaders
• Attorneys
• Vakils

In the case of Court in its own motion vs. State, Delhi High Court answered the question, whether a child victim should be permitted to waive the privilege of the counsellor? Court held that it can be done if the child does it knowingly and voluntarily and waiver is in the interest of the child provided the reasons for a waiver should be recorded in writing in the order.

In the case of Karamjit Singh v. State, the Court held that one cannot ask for disclosure of any professional communication and documents of attorney and client under the Right to Information.

In the case of Board Of Directors, Y.M.C.A. and v. R.H. Niblett, the Court observed that in a defamation case where the evidence in question is proved to be privileged then the burden to prove not just normal malice but express malice lies on the plaintiff. The Court stated that if the occasion is privileged then the publication by a person ‘exercising the privilege to third persons’ if it is reasonable and in the ordinary course of business, where communication wasn’t possible except in the presence of uninterested people, it is protected. The privilege can’t be destroyed merely because third-persons(clerks, typists or copyists, etc.) do not have a legitimate interest in the subject matter.  

Privilege can not be waived by voluntary evidence: (Section 128 of the Indian Evidence Act)

Section 128 states that if the client himself presents some evidence regarding privileged communication, it doesn’t amount to a waiver of privilege. Summoning the lawyer as a witness by the client doesn’t amount to consent to disclose but when the client himself asks questions pertaining to the confidential communication then it amounts to an implied waiver of privilege.

Confidential communications with legal advisers (Section  129 of the Indian Evidence Act)

This section states that no one can be compelled to disclose privileged communication between a client and an attorney. If a client offers to be a witness then the Court can extract from him any communication as it deems necessary. Section 129 prohibits the client from disclosing, unlike Section 126 which prohibits a lawyer. It lifts the restrictions imposed under Section126 partially, it acts as a counterpart of Section126 of the Evidence Act.

Court held in the case of P R Ramakrishnan v. Subbaramma Sastrigal that as per Section129 of the Evidence Act both the client as well as the attorney aren’t under any obligation to spell the privilege communication to any third person.

Privileged communication under the Companies Act, 1956

Usually, the job agreement and bylaws of a company make it obligatory to keep communications confidential. Section 251 of the Companies Act, 1956 (now Section 227 of the Companies Act, 2013) states that a legal adviser, a banker of any company, a corporate body should not be required to disclose any privileged communication to the Central government, inspector or registrar appointed by the Central government.

The Rules on Professional Standards

Bar Council of India(BCI) has some rules on professional standards which every advocate has to abide by, these are mentioned in Chapter II, Part VI of BCI. Attorney-client privilege is further strengthened by these rules. It is believed that an advocate owes a duty towards the Court, client, their opponent, and other advocates. The power to make these rules is inherited by the BCI under Section 49(1)(c) of Advocates Act, 1961.

Rule 7 & 15

Part VI, Chapter II, Section II of Bar Council of India Rules(BCIR) mentions the Rules on an advocate’s duty towards the client. 

Rule 7 of it provides that no advocate shall commit a direct or indirect breach of obligations under Section 126 of the Evidence Act. Thus, violating it would amount to a violation of BCI rules.

Rule 15 prohibits an advocate from misusing or taking advantage of the client’s confidence reposed in him.

An advocate would be subject to disciplinary proceedings in case of breach of the above-mentioned rules.

Privileged communication between a married couple

Trust between the spouses is the foundation of a marriage. It is very crucial to protect the privacy of the confidential communication between the spouses during the marital relationship to maintain the peace of families. Both the spouses are obliged under Section 122 of the Indian Evidence Act not to disclose any communication which has happened during their marriage. It is important to note that the protection applies to all sorts of communications between husband and wife. 

There are few exceptions to this clause:

• Acts or conducts apart from the communication can be disclosed. 

In the case of Ram Bharose v. State of U.P., the husband was accused of theft of jewellery which he had gifted to her wife. He told his wife that he had obtained it from her previous home. The wife in the Court discloses the conduct of the accused that he had seen her husband coming down from the roof and after taking a bath gifted it to her. Court held that the wife could testify as to the conduct but not the conversation. 

• If the party who made the communication consents to its disclosure i.e. waives the privilege, then the evidence of privileged communication can be given. 
• In Suits or criminal proceedings between the two spouses. 
• Communications made before marriage or after dissolution of marriage. 

The landmark judgement of Nagraj Alias Kumar v. State of karnataka, the Court observed that even though Section 120 of the Evidence Act permits a spouse to tender evidence against the other spouse except in suits or criminal proceedings between the two spouses. Section122 makes it clear that privilege extends to all communications, the said communication does not need to be confidential. Only spouses who made the communication can waive it and not the witness as the privilege doesn’t extend to them. Even the Court cannot permit the witness to disclose even if he/she is willing to share. It is incumbent to ask for the consent of the party against who the evidence is being given under Section122 of the Evidence Act. 

In another landmark case of M.C. Verghese Vs. T.J. Poonan and Anr., the Supreme Court held that only communications that took place during the marriage are protected under the privilege mentioned in Section 122 of the Evidence Act. The protection continues even after the dissolution of marriage or the death of one of the spouses. Communication before the marriage or after the dissolution of a marriage doesn’t come under the purview of sec 122.

Privileged communication between a doctor and the patient

In India, The Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002 regulate the conduct of medical professionals. 

Rule 7.14 of these regulations provides that the secrets of a patient that the registered medical practitioner has learned during the exercise of his/her profession cannot be disclosed. Few exceptions to this rule are:

1. When a presiding judge in a court orders to disclose the privileged communication
2. When there exists a serious risk to a specific person and/or community
3. In case of a notifiable disease concerned public authorities should be immediately informed

Rule 7.17 states that “A registered medical practitioner shall not publish photographs or case reports of his / her patients without their permission, in any medical or other journal in a manner by which their identity could be made out.” It is to be noted that if the identity is not to be disclosed then no consent is needed. 

Chapter 8 of the Rules states that if any medical practitioner violates the Physician-patient privilege then the Medical Council of India(MCI) can take any action as it deems fit against the registered medical practitioner in question, once he/she is held guilty after the inquiry. MCI can also “direct the removal altogether or for a specified period”.

The power to formulate these rules is enshrined in MCI under Section 20A of Indian Medical Council Act. 

In the landmark judgment of Mr. X Vs. Hospital Z, the Supreme Court held that a rule of confidentiality has certain exceptions, one of which is the disclosure of privileged communication between the doctor and client if it poses a serious risk to a person in case of non-disclosure. Public interest can override the right to confidentiality. For instance, in the given case it was necessary to disclose to the wife that the husband has HIV-AIDS.

Right to privacy and Privileged Communication

Article 21 of the Constitution of India states, “No person shall be deprived of his life or personal liberty except according to the procedure established by law”, it has an encyclopedic ambit. It covers all aspects of life, one of which is Privacy. Right to privacy isn’t expressly written in the Indian Constitution but overtime judicial proceedings have shown that it comes under the ambit of Article 21.

The law safeguards the right to privacy by protecting from the disclosure of privileged communication. It takes away the evidentiary value of confidential communication. 

Section 122 of the Indian Evidence Act interdicts married couples from disclosing any confidential communication which happens during the marriage. Similarly, sections 126 to 129 of the Evidence Act deal with attorney-client privilege. The concept of privileged communication strengthens the fundamental right to privacy. 

Moreover, laws like Rule 7 and 15 of the BCI Rules on Professional Standards for attorneys and Rule 4.14 and 4.17 of The Indian Medical Council (Professional Conduct, Etiquettes and Ethics) Regulations, 2002 for medical practitioners bars the disclosure of privileged communication. Violation of any of these laws is an automatic violation of the right to privacy under Article 21 of the Indian Constitution.

In the case of Vishal Kaushik v. Family Court, the Court held that if the conversation between two spouses is recorded by one of the spouses without the knowledge of the other spouse, that evidence will not be admissible in the Court. In fact, this act will amount to a breach of privacy under Article 21 of the Indian Constitution and the spouse who has recorded will be held liable.

Privileged communication in other countries

In both the USA and UK, privilege is a fundamental right which is used as a safeguard tool by the individuals and corporations from disclosing any privileged communication. 

United Kingdom (UK)

Broadly there are two types of privileges in the UK to protect communication between lawyer and client:

1. Legal advice privilege- This includes only written or oral confidential communications between a lawyer and a client that provide, seek or receive legal advice. The term lawyer here doesn’t include tax advisors or accountants but it does include in-house counsel.
2. Litigation privilege- This includes written or oral confidential communications between a lawyer and a client or either of them and a third party that provides, seeks or receives legal advice in connection with the proceedings of a case.

A lawyer can’t waive the privilege without the consent of the client.

Legal professional privilege can be waived in the following cases-

• If the document loses its confidentiality
• The document came into being for a criminal or fraudulent scheme

Unlike in India where an act of illegal nature can be disclosed, in the UK the act must be of criminal nature and not merely of illegal nature.

United States of America (USA)

There are three areas of law that are covered under the Legal professional privilege-

1. Rule of Confidentiality- without the consent of the client or other applicable exceptions, a lawyer can’t disclose the confidential communication that occurred between him and the client or client’s representative.
2. Attorney-client privilege- this rule prevents disclosure of confidential communication made in furtherance of obtaining legal services specifically judicial proceedings.
3. Work Product Doctrine- it protects the disclosure by the opposing counsel of material that has been prepared in anticipation of litigation.

The privilege can be waived under various circumstances, there are no specific terms. Example- in case of intentional or unintentional waiver of privilege.

Singapore

Legal privilege is of two types-

1. Legal advice privilege- This includes only confidential communications between a lawyer and a client or lawyer and client’s agent that provide, seek or receive legal advice. This doesn’t include communication between a lawyer and a third party unless the third party is acting as a client’s agent.
2. Litigation privilege- This includes confidential communication between a lawyer and the client and also a lawyer and a third party, even if the third party isn’t acting as a client’s agent that provides, seeks or receives legal advice where there is a legal prospect of litigation.

It does include communication with the in-house counsel also.

Australia

Legal professional privilege is derived from legislation and common law. Privileged communications between a lawyer or lawyers and the client for the purpose of providing legal advice or professional legal services regarding a Court proceeding cannot be disclosed. It includes documents also.

If the client acts in an inconsistent manner with confidentiality, it leads to an implied waiver of the privilege. 

In case of global privilege, the complexity increases as in one jurisdiction it may be granted privilege protection whereas in another jurisdiction it may not be granted privilege.

Conclusion

Various legislations oblige the parties of a protected relationship (attorney-client, doctor-patient, husband-wife) to adhere to the rule of privileged communication. The foundation of this is to guard the trust that a client re-poses in an attorney, patient in a doctor and spouses in each other. However, the privilege is not absolute in nature, it is subjected to certain exceptions. The law also provides for punishment in case of its violation.

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This article is written by Rohit Raj, a student of Lloyd law college, Greater Noida.

Introduction 

Promissory Note a financial instrument or legal instrument or we can also say it as ‘Debt instrument’. Promissory note is not something like new thing, it is a very old concept related to financial transaction and if we look at its emergence then we found that Promissory Note for the first time found in China during the Han Dynasty in 118 BC which is completely of leather material and after that Romans also used as a financial instrument at their time and proof of same is being found in London. We talk about its emergence and which others have earlier found this concept of Promissory Note. If we look at the Concept of the Promissory Note, then it is said that a Promissory Note is a type of financial instrument or legal instrument and also a type of money market instrument which is a written promise by a entity to another entity to pay a specific amount of money within the stipulated time. 

Promissory Note is being issued when a Person gives another person a certain amount of money for a fixed period of time with a written promise that the person whom certain amount of money is being provided will return the money as per the written guidelines in the promissory note and in case if that person does not repay the amount in the stipulated period of time then Legal action will be brought against that person.

Certain conditions requirement for issuing of Promissory Note and required details 

As I have earlier talked about what is a promissory note and what it is for but here we will deal with what are the situations in which it is being issued and against which things. Promissory Notes are created to fit the transaction that you are involved in and nothing more than it. Promissory note is used against the loan given and also against loan taken but some particular mentioned area where it is also used like– Mortgages, Student loans, car loans, and Personal loans between relatives one. During the lending of a large amount of money, need or promissory note template so that promissory note can be made and be prevented from losing their lend money to others.

A promissory note contains all types of guidelines and all types of terms and conditions required for fulfilling the criteria of Promissory note. The Promissory note should include certain details which is required in every circumstances like:

• The name and Address of both the lender and the borrower.
• Total amount which is being borrowed and if any collateral is being put down it should also be mentioned down.
• Time limit and how often payments will be made.
• Signature of both the parties must be there in order to Promissory note enforceable by law.

Different forms of Promissory Note

After analyzing details required for a Promissory note and what is a Promissory note and from where it originates now we are going to see different types of Promissory note. Some of the Promissory note are:

• • Simple Promissory Note: This Promissory note is for a lump sum repayment on a particular date as per the terms and condition mentioned. In this Interest rate may or may not be charged on the loan amount, depending on the agreed terms and condition.
  • Demand Promissory Note: As the name suggests Demand, it is clearly explicit that it is totally based on demand and made on demand. This Promissory note is one in which payment is due when the lender asks for the money back after the finish of the stipulated time period. 
  • Secured Promissory Note: A Secured Promissory Note is a type in which there is an obligation to pay the amount which is taken as a loan which is secured or we can say that for which collateral has been put down and if the person who takes loan fails to pay within the stipulated period of time then that collateral is being seized. The collateral is anything of the same value of loan taken like- real estate or personal property. Secured Promissory notes are most often used in loans of fairly large sums borrowed from commercial lenders and mostly prevalent in the money market. So, it is also called a Money market instrument.
  • Unsecured Promissory Note: An Unsecured Promissory note is an obligation on the person who has taken loan for payment but there is no requirement of Collateral or seizure of property earlier as a security. In this type, if the Payer fails to pay the required sum of money within the stipulated period of time, the Payee has a full right to go for legal action and file lawsuit against him but if it is found that the property available to the person who has taken loan is not sufficient to make repayment then its totally Bad luck of person who have given loan to that person. This type of promissory note is uncertain and nothing can be done else.
  • Convertible Promissory Note: Convertible Promissory Note is not like an ordinary one. This type of Promissory Note is issued against the loans made to businesses and the Corporate Sector. This Promissory Note is with an additional provision that allows the debt to be converted as the name itself suggests in the business, in lieu of being repaid. And this Convertible Promissory Note can be either of them i.e. Secured Promissory Note or Unsecured Promissory Note.

Promissory Note Defined According to Different Countries Act

Section 4 of the Negotiable Instrument Act, 1881

Promissory Note

A “Promissory note” is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.

Section 83, Bills of Exchange Act, 1882 (England & Wales)

A Promissory Note is an unconditional promise in writing made by one person to another signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money, to,or to the order of, a specified person or to bearer.

Section 3-104 (d), Negotiable Instrument Act (United States)

A Promissory note that meets certain conditions is a negotiable instrument regulated by article 3 of the Uniform Commercial Code. It defines a Promissory note as an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the Promise or order.

Certain Key Pointers related to Promissory Note

• A Promissory note is only issued under the Section 4 of the Negotiable Instrument Act, 1881 and all the terms and conditions are mentioned in this act for the successful transaction and delivery of a Promissory note.
• Suppose a Promissory note is being issued in one state but now it has to be presented in another state then there will be no problem in dealing in another state with the same Promissory note and with the same stamp as the note bears valid stamp.
• A Promissory note should not be typed or printed, it should be totally hand written and it should contain all the required elements for the valid transfer of Promissory Note.
• Most essential things is that a Promissory note is valid up to the extent of 3 years starting from when the Promissory note is executed and at the end of 3 years that Promissory note becomes invalid and a fresh Promissory note is being executed in favour of that same person.
• And in case of Promissory note execution there is no maximum limit of amount which can be lent or borrowed.
• In many cases, a witness is being taken for the proof but is totally optional and it is not mandatory. It is advisable to have a note signed by a witness who is independent from the transaction.

After analyzing and explaining different elements of Promissory note, what it is, how execution of Promissory notes take place now the different parties involved in the execution of Promissory note will be defined and explained. The Parties involved in Execution of Promissory Note are: (1) Drawer (2) Drawee (3) Payee.

Drawee is the Person in whose favour the Promissory note is prepared and this person is the creditor who provides goods or services on credit or lends capital. It also depends on two things that the drawee is willing to provide and able to provide. After this comes Drawer, it is the person or we can say borrower or debtor who promises to pay the debt to the moneylender within the given time period and as per the terms and condition. Now comes Payee, who takes the money or to whom the money or payment is made. And it is not necessarily required that payee and drawee should be two separate people or entities, both can be the same also. 

Many People got confused between Bills of Exchange and Promissory Note and use them in exchange for each other. Due to this a lot of problems are taking place in the financial transaction. So, it’s very necessary to clear the difference between these both instruments. And this confusion is because there is not a major difference between these two negotiable instruments. A Bill of Exchange is a negotiable instrument which is issued in order to ask the debtor to pay the debt to the creditor the fixed amount of money that has been owed by him for a stipulated period of time. Whereas, Promissory Note is also a negotiable instrument but it is issued by the debtor with a written promise to pay the creditor a certain amount within a specific date or on demand. Bills of exchange is mentioned in the Section 5 of Negotiable Instrument Act, 1881 and Promissory note is also mentioned in Negotiable Instrument Act, 1881 but it is included in Section 4 of this Act. 

Bills of Exchange is Issued by Creditor and the Promissory Note is issued by Debtor and this clearly demarcated the difference between these two instruments. After this if we see for the liability that whose liability is in the execution of both the instruments. In Bills of Exchange, Liability of drawer is secondary and conditional and total liability is on Drawer and in Promissory Note, Liability is on drawer as same as in the case of Bills of Exchange but the liability of drawer is primary and absolute.

As we have done with all the aspects of the Promissory note and clearly explained the plethora of issues related to it now it’s time to come to a conclusion and lets start concluding.

Conclusion

Let us start concluding, as already said A Promissory note is a type of financial instrument or legal instrument and also a type of money market instrument which is a written promise by a entity to another entity to pay a specific amount of money within the stipulated time. So, its very essential instrument in today market or commercial growing area where finance is a major paying role in development of commercial field or market. 

Promissory Note which is considered as a most valuable money market instrument should be carried forward but as Artificial intelligence, Big Data is coming into Picture these all will certainly lead to back out the system or concept of Promissory note. Also in the digitalization era, it will soon become obsolete and will not be more prevalent in the market with the passage of time. According to my opinion, the Concept of Promissory note should not be removed or back out instead of removing it should be upgraded in the form of digital so that it can cope up with the digitalization area and prevent it from becoming obsolete. This upgrading of this Promissory note system is the best solution in my view and it should be followed to continue it as best. 

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This article is written by Shristi Suman, a second-year student of Symbiosis Law School, Hyderabad. In this article, the offenses impacting personal liberty under IPC have been discussed.

Introduction 

The Constitution of India under Article 21 guarantees the right of personal liberty to every person and must not be deprived of such right except according to the procedure established by law. The issues such as the meaning and content of personal liberty and the nature and scope of the protection of ‘the procedure established the law were destined to be expounded by the Supreme Court through the judicial process. 

The Supreme Court has been envisaged as the ultimate authority to interpret the Constitution as the Supreme Court is considered as the guardian of the Constitution and as it protects and provides the fundamental rights to people. Personal liberty of the citizens is a fundamental right under the Constitution of India and no one can take away this right except the State and according to the procedure established by law. In criminal law, it is seen that an accused faces the risk of losing his personal liberty at three different stages. 

The first stage where the accused loses his personal liberty is where the arrest is made by the police pursuant to registration of an FIR against him. The second stage is where the accused is denied bail by the court and the third stage where the personal liberty of the accused is taken away is when he is denied suspension of sentence and bail after his conviction in a pending appeal.

Article 21 of the Constitution

The right to life is fundamental to the very existence of humans and without it, we cannot live as human beings. The right includes all those aspects of life, which contributes to making a person’s life meaningful and complete. It is the only article in the Indian Constitution that has been given the widest possible interpretation through many judgments. Article 21 of the Constitution includes many other rights of the citizens. Rights like right privacy and liberty have been included under this Article. Article 21 includes all the rights that are essential and unavoidable for a person.

Right to live with human dignity

In the case of Maneka Gandhi v. Union of India, the Supreme Court gave a new dimension to Article 21 of the Constitution and observed that the right to life as a fundamental right of the citizens not merely includes the right of physical existence but also to live with human dignity. Elaborating the same view, The Supreme Court in Francis Coralie v. Union Territory of Delhi elaborated the judgment of Maneka Gandhi’s case on Article 21 and observed that the right to life also includes the right to live with human dignity which includes the basic necessities of life such as adequate nutrition, clothing, and shelter over the head and facilities for reading writing and expressing oneself in diverse forms. Article 21 also includes within its ambit the right of citizens to freely move about and mix and mingle with other people.

In the case of Bandhua Mukti Morcha v. Union of India, another important aspect of Article 21 was observed in which it was said to be the heart of all the fundamental rights of the people, the Court gave it an expanded interpretation. Bhagwati J. observed in this case that, it is the fundamental right of every person in this country to live with human dignity and free from any kind of exploitation. The right to live with human dignity which is enshrined in Article 21 of the Constitution derives its very existence from the Directive Principles of State Policy particularly from clauses (e) and (f) of Article 39 and Articles 41 and 42 of the Indian Constitution.

Thus, it was also the intention of the framers of the Constitution to establish a framework in which people are protected and provided with the basic necessities of life. Therefore, the state should aim to make laws that do not contravene the intentions of the framers of the Constitution. The State must make laws to protect the citizens against any kind of abuse, and furthermore, provide opportunities and facilities to them so that they can develop in a healthy manner and in conditions of freedom and dignity. Taking these steps would enable people to live with human dignity and freedom. The State should not make any law that takes away a person’s fundamental rights and even the Central Government nor any State Government has the right to make any law or take any action which contravenes Article 21 of the Constitution and can deprive a person of his basic requirements of life.

Personal Liberty as a fundamental right

Article 21 of the Constitution states a person’s right to life or personal liberty can’t be taken away except according to the procedure which has been established by law. The concept of the Right to life and personal liberty under the Indian Constitution has changed over time. The traditional approach to the Right was the Right to Life of individuals and no one other than the State shall have the power to take it away according to the established procedure of law.

Over time, the Right has been interpreted as a right of the citizens to live with all the basic necessities. The Right also includes personal liberty to reside, to go abroad, right to clean environment, right to die (passive euthanasia), right to adequate education, right to food and livelihood, etc. The Right to Personal Liberty of citizens has been interpreted by the various courts in various cases. The nature and scope of the Right have increased and redefined over time by the courts according to the needs of the time.

Procedure Established by Law

‘Procedure Established by law’ is a phrase taken by the British Constitution. As per this phrase, any right of an individual can be taken away by law. The law can take away an individual’s right to personal liberty only according to the procedure which has been established by the law. This principle does not assess if the laws made by the Parliament are fair, just, and not arbitrary.

The procedure established by law can be valid for the purpose of taking away the right to personal liberty of the individuals even if it is different from the principles of justice and equity. Thus, the laws made by the legislature need to be fair and just in order to protect the individual against any arbitrary action of the executive.

The expression “procedure established by law” has been interpreted in several cases. The judgments given in the cases in which the said expression was interpreted reveals that courts while interpreting the phrase has enlarged the scope of the expression as per the need of the case in hand. The Supreme Court interpreted the expression “procedure established by law”  under Article 21 as a procedure that has been prescribed by law and is enacted by the state. The Court rejected equating the phrase “procedure established by law” with the American “due process of law.”

In the case of Maneka Gandhi v Union of India, the Supreme Court observed that the procedure prescribed by law for the purpose of taking away a person’s life and personal liberty must be ‘right, just and fair’ and not ‘‘arbitrary and oppressive,’’. If a law is unfair and unjust then, such law would not be considered as a procedure by law at all as per the requirement of Article 21. Thus, the phrase “procedure established by law” again acquired the same significance in India under Article 21 as the “due process of law” clause of the Constitution of America.

In Sunil Batra v Delhi Administration case, Justice V. R. Krishna Iyer said that though “our Constitution has no due process clause” like America’s Constitution after taking into consideration the Maneka Gandhi’s case, Article 21 of the Indian Constitution may be treated similarly as a counterpart of the due process clause that is mentioned in the American Constitution.”

The Supreme Court once had to deal with an increasing number of death sentences to people for the offense of “bride-burning”. In 1985, the High Court of Rajasthan in the case of State Of Rajasthan vs Smt. Lichma Devi, sentenced two people, Jagdish Kumar and Lichma Devi, to death for the offense of murder of two separate women by setting them on fire. The court then did a very unpredictable thing by ordering both the culprits to be hanged in public.

The Attorney General of India against this judgment wrote a letter to Supreme Court, the Supreme Court then, ordered a stay on the punishment of public hangings and it was further observed by the Court that a punishment like this is considered as barbaric punishment and it won’t be wise to give a barbaric punishment in response to a barbaric crime. The Court further observed that the execution of the death sentence by public hanging was a barbaric punishment and inhuman thus, violating Article 21 of the Constitution, which makes it mandatory the observance of a just, fair and reasonable procedure.

Thus, in response to the order by Supreme Court, the Rajasthan High Court stated that the judgment must be set aside by the Supreme Court itself on the ground of inter alia stating that the judgment was violative of Article 21 under the Indian Constitution.

The procedure of law needs to be fair and just

The Indian Constitution treats Article 21 as an important Fundamental Right of the citizens. The Right to life and liberty is given utmost importance and no one except the procedure of law can deprive an individual of his liberty. The procedure of law for that purpose needs to be fair and just. The meaning of the word ‘law’ mentioned in Art. 21 does not merely mean law which has been enacted but incorporates the principle of natural justice so that law which can deprive a person of his life or personal liberty cannot be valid unless it incorporates the principle of fairness and reasonableness. The reasonableness of the law of preventive detention can be tested under Article 19 of the Indian Constitution.

In 1973, through the 41st Law Commission, Parliament made a provision for anticipatory bail. The purpose behind it was to avoid unnecessary arrests and harassment of individuals who were under arrest. It was seen before the 41st Law Commission that the personal liberty of individuals was infringed as per the procedure of law. The accused in India is said to be innocent until he is proven to be guilty. In order to protect the interests of the accused and safeguard his personal liberty, the Parliament made a provision for the anticipatory bail.

In 1997, in the case, State Rep. by the C.B.I vs. Anil Sharma, the Supreme Court canceled the anticipatory bail which was granted by a High Court and held that “custodial interrogation is qualitatively more elicitation-oriented” than when an accused has anticipatory bail. The reality of the use of third-degree methods was completely ignored in this case, and was held that “such an argument can be advanced by all accused” as the court had immense faith in “responsible police officers”.

In contradistinction to the aforementioned case, in the same year, the court in the case of DK Basu vs State of West Bengal observed that the worst forms of violation of human rights take place during the process of investigations of the accused by the police officers. Yet, the court even while giving directions to safeguard individuals from the abuse of authority, held that the freedom and personal liberty of an individual must yield to the needs of the State’s security. The argument of the needs of “security of the State” which was given by the court has long been used for restricting the personal liberty of citizens. The presumption of innocence is ignored, and for many offenses, the accused has to prove innocence even for getting bail. Preventive detention laws are also used excessively and at the convenience of the police officers despite inbuilt safeguards by law.

The procedure of law under CrPC in relation to bail

Liberty of a person is very important and is considered to be one of the most important Fundamental rights which has been guaranteed in the Indian Constitution. The Code of Criminal Procedure, 1973 lays grounds for the grant of bail because providing bail to the accused until he is proven guilty is the aim which the law strives to achieve. Section 436 of Code of Criminal Procedure (CrPC) states that where a person fails to comply with the conditions that are required under the bail-bond regarding the time and place of attendance, then the Court has the authority to refuse bail to a person when he appears before the court. Any such refusal of bail by the Court is a violation of a person’s right to liberty and further, the Court can call upon any person bound by such a bond to pay the penalty of it under Section 446. The provision is a violation of the liberty of the accused as it keeps the proceedings pending without granting a bail.
Section 437 of CrPC talks about the non-bailable offenses. There are many cases in which the court has refused to grant bail to the accused. The accused is presumed to be innocent until he is proven guilty of the offense but the non-bailable offenses refuse to grant rights of personal liberty to the accused until the accused is proved to be innocent and thus, violates the right of personal liberty of the accused.

Right against Delayed Execution

In the case of T.V. Vatheeswaram v. State of Tamil Nadu, the Supreme Court stated that delay in the process of execution of death sentence which exceeds 2 years would be considered as sufficient ground to invoke protection under Article 21 of the Constitution and the punishment of death sentence would be converted into life imprisonment. The cause of the delay for such punishment is immaterial even if it is found that the accused himself was the reason for such delay then also the delay in process would attract Article 21 of the Constitution.

In the case of Sher Singh v. State of Punjab, the Supreme Court held that prolonged delay for the execution of a death sentence is unjust, unfair and unreasonable procedure and the only way to undo such procedure is through Article 21. The Court observed that this rule cannot be taken as the rule of law to be applied in the same way to each case. Each case needs to be decided according to its own facts and needs. 

Right against Handcuffing

Handcuffing is prima facie inhuman in nature and over-harsh. It is violative of Article 21 of the Indian Constitution.

In the case of Prem Shankar v. Delhi Administration, the Supreme Court struck down the rules which stated that every person who is under-trial for a non-bailable offense punishable with more than three years imprisonment i.e. accused of a cognizable offense has to be routinely handcuffed. The Court observed that handcuffing should not only be resorted to when there is ‘clear and present danger of escape’ of the accused but also at times where there isn’t much danger of the accused to break out of the control of the police.

Arrest without a warrant

Section 41 of CrPC gives the right to a police officer to arrest any person without a warrant against whom some credible information has been received about the commission of a cognizable offense. The said provision has such a wide interpretation that it gives unbridled power to any police officer to make an arrest. Section 41 A of the CrPC states that a police officer at his own discretion may give notice of arrest to an accused where he feels.

In the case of Joginder Kumar vs State of Uttar Pradesh, the Supreme Court observed that the power of police officers to arrest without a warrant should be exercised only after a reasonable investigation has been conducted with regard to the person’s complicity in the crime. It is also important to understand whether there is a need to arrest or not.

In DK Basu vs State of West Bengal, the Supreme Court laid down guidelines in relation to the manner in which an arrest can be made along with the rights of the person arrested. This judgment further, resulted in an extensive amendment in the Code of Criminal Procedure. The amendments were made in relation to the manner of examination of the arrested person by a medical practitioner under Section 54 of the CrPC, identification of the person who has been arrested under Section 54 of the CrPC, health, and safety of the arrested person under Section 55 A of the CrPC, etc.

In Arnesh Kumar vs the State of Bihar, the Supreme Court expressed concern regarding the manner in which the arrests were taking place under Section 498-A of Indian Penal Code in regards to the matrimonial disputes. The apex court gave an instruction to all the States that police shall not mechanically resort to Section 41 of the CrPC in order to arrest individuals but shall employ the provision of notice under Section 41 A of the CrPC.

Sec 41 (1)(b) of CrPC states that if a person against whom a reasonable complaint has been registered or any kind of credible information has been received, or there is a reasonable suspicion that the person has committed a cognizable offense that is punishable with imprisonment for a term which is not less than seven years then a police officer has a right to arrest such person if the following conditions are satisfied:

• The police officer has a particular reason to believe that the person has committed a cognizable offense on the basis of a complaint, information, or suspicion.
• A police officer can make an arrest of a person if in his possession something is found which is suspected to be stolen property and who is suspected of having committed an offense with reference to such a thing.
• If a person obstructs a police officer in the execution of his duty, or escaped or has attempted to escape from lawful custody, then the police officer can arrest such person.
• A person who is reasonably suspected of being a deserter from any of the Armed Forces of the Union.

Right against illegal detention

In the case of Joginder Kumar v. State of Uttar Pradesh, the person who was the petitioner in the case was detained by the police officers and his detention and whereabouts were not informed to his family members for five days. The Supreme Court after this case where the police officers illegally detained a free citizen laid down the guidelines in order to govern the procedure of arrest of a person during the investigation.

An arrested person who is held in custody must be entitled to have a friend, relative or other person informed as far as is practicable that he has been arrested and also his whereabouts where he is being detained must be informed to them if he requests.

It is the duty of a police officer to inform the arrested person about this particular right when he is brought to the police station as soon as possible. It is also necessary to make an entry of the person who was informed of the arrest in the diary which is maintained by the police for this purpose.

In D.K. Basu v. State of West Bengal’s case, the Supreme Court laid down a detailed guideline that has to be followed by the central and state investigating agencies for the purpose of arrest and detention till legal provisions are made. It was also observed by the Court that any form of torture or cruel and degrading treatment, whether it occurs during interrogation, investigation or otherwise will fall under the ambit of Article 21 of the Constitution.

The procedure of law under CrPC in relation to FIR and search warrants

The provisions of CrPC takes away the right to personal liberty of the accused in various ways. The powers imposed upon the police are vast and unbridled. According to Section 154 of CrPC, the police have an absolute power to register First Information Report (FIR) suo moto or on information that is provided by a person against the accused. Based on such an FIR, the police have a right to enter into the property of the accused and conduct raids according to Section 94 of CrPC.

The police can search the property or even take possession of any property or article therein found which the police suspect to be stolen property or objectionable article to which this section applies. The personal liberty of an individual includes residing freely without any disturbances. The right of personal liberty of the accused gets violated by the procedure established by the Code of Criminal Procedure. 

The police have the right to enter into the property of the accused, conduct raids under Section 94 of the CrPC, seize documents found by the police under Section 102 of CrPC, and even freeze accounts of the accused in case of a cognizable offense. The police also have a right to seek a police remand from the court for the procedure of custodial interrogation of an accused under Section 167 of the CrPC. The procedure of custodial interrogation rests in the hands of the police as what happens at the police station is hardly in the realm of speculation.

Article 21 & Prisoner’s Rights

The protection of Article 21 is also available to the convicts who are in jail. The convicts should not be deprived of all the fundamental rights merely for the reason of conviction. A convict in jail is deprived of the fundamental freedom to move freely throughout the territory of India. A convict is entitled to all the other fundamental rights including the right that is guaranteed under Article 21 of the Constitution and he shall not be deprived such right except by a procedure established by law.

In Maneka Gandhi v. Union of India, the Supreme Court gave a new dimension to Article 21. The Court has interpreted Article 21 of the Constitution to have the widest possible amplitude. This case laid down a new constitutional and prison jurisprudence.

Conclusion

The concept of personal liberty is a constitutional commitment for which the principle of Criminal Law revolves around Natural Justice. According to it, even the accused person has  to be treated with human treatment. The accused person also has certain rights under the Indian Constitution. An accused person has certain rights and such rights should not be violated even during the course of any investigation; inquiry or trial of offense with which he is charged, and he should be protected against arbitrary or illegal arrest.

When India became a republic, the citizens of India gave themselves the Indian Constitution. The Preamble recognizes and mentions the personal liberty of citizens as liberty of ‘thought, expression, belief, faith, and worship’. The most important aspects of ‘personal liberty’ are found to be conspicuously absent in the Preamble. The makers of the Constitution have put ‘personal liberty’ in Article 21 i.e. in Part III of the Fundamental of our Constitution. In a free country like India, the Constitution guarantees the citizen certain fundamental rights. 

The right to personal liberty is one of the most important fundamental rights. It is high time that the legislature should take steps in order to amend the criminal code so that arrest made by police cannot be made without obtaining a warrant from the jurisdictional magistrate. It is a matter of grave concern that we are moving towards the era which goes according to police.

A grant of bail of the accused largely depends on the nature of accusation that is made by the police in the FIR and according to the quantum of punishment under the Section of offense. It is also often seen that the accusations are exaggerated in the FIRs by the police and bail is rejected based on such FIRs. It is a fact that almost two-thirds of the total number of prisoners who lodged in jail are under-trials. The legislature needs to take the matter of personal liberty of the citizens more seriously and make appropriate amendments in order to improve the present scenario.

The post Procedures of Criminal Law in India impacting personal liberty appeared first on iPleaders.

This article is written by Arush Mittal, a student of the Hidayatullah National Law University, Raipur.

Introduction

When we think of sports, the first name that crosses our mind irrefutably is cricket. In India, people breathe cricket and it is like a religion which everyone preaches. The popularity of cricket in India can be easily seen through IPL, which is the Indian Premier League. IPL had been started in the year 2008 by the Board of Control for Cricket in India (BCCI) and has been a great hit since then. IPL is a professional Twenty20 cricket league in India which is generally contested during the summers, played by eight different teams, representing eight different cities in India. The Indian Premier League is the most attended cricket league in the world and had become the first sporting event in the world to be broadcasted live on YouTube in 2010. There have been twelve seasons of IPL in all and the latest tournament has been clinched by Mumbai Indians.

IPR and IPL

Intellectual Property Rights has opened numerous business opportunities in the tournament of IPL. Some can also call IPL as Intellectual Property League because of the various openings in business that this tournament provides. People have invested gigantic amounts of money for their teams in IPL including their attire, shoes, t-shirts, etc. IPL also has its own website where it gives the latest news related to the matches and players and also provides match reports, interviews of the players and announcements concerning the game. The website also imparts to its viewers an option of online polling before the match begins regarding who the viewer thinks the winner would be. The functioning of IPR comes into play at literally ever instance, be it, a brand name, team name, team logo, tag-lines, slogans used by various teams. The IPR plays an important role in increasing the popularity of IPL. Much heed is not given to the Intellectual Property Rights but a lot of money is invested and involved in organizing IPL and IPR always helps in making it a success.

There are eight teams from eights different cities:

• Mumbai Indians
• Royal Challengers Bangalore
• Kings XI Punjab
• Kolkata Knight Riders
• Delhi Capitals
• Chennai Super Kings
• Rajasthan Royals
• Sunrisers Hyderabad 

Chennai Super Kings and Rajasthan Royals had been discarded from the Indian Premier League because of fixing, doping, betting and other gambling issues. Rising Pune Supergiants and Gujarat Lions and been replaced with the teams which were discarded.

Types of Intellectual Property in IPL

There is no business which can run successfully without the shelter of intellectual property law as intellect needs protection too. Few types of Intellectual Property which is used in IPL are:

1. Copyright
2. Trademark
3. Design

Copyright in IPL

Copyright is an original literary work. The person who creates such work is the owner of that work until that work is licensed. The work is licensed by applying the Copyright Act 1957. In IPL, copyright can be applied to website layout designs and the team uniforms. There are bids each year to assign the right to broadcast the matches. STAR India currently holds the right to broadcast the IPL matches by winning the bid for  ₹16347.5 Cr under a five year contract beginning from 2018, earlier the rights were with Sony Pictures and World Sport Group as a partnership. 

As per the Brand and Content Protection Guidelines, 2018 (IPL Brand Protection Guidelines), audio-visual images of match footages as well as deferred highlights are all protected under IPR. There is a limit to fair use in journalistic coverage to ensure that the official media right holder gets proper returns to the investments. The broadcast must be delayed by 30 minutes and there are no alterations allowed in the original video broadcasted. In order to prevent commercial gains from rebroadcasting, there should not be any intentional advertising while the video is being broadcasted. All these guidelines are mentioned in the Regulations for News and Current Affairs Broadcasters for Audio Visual Broadcasting, 2018 (IPL Media Guidelines).

Copyright in an IPL must be used to protect:

1. Fixtures
2. Published Results
3. Recorded visual images 
4. Commentaries
5. Photographs of events, teams and athletes 
6. Rule books, reports and other materials used in the administration and promotion of sport
7. IPL title track

Copyright Infringement

The Indian Premier League’s strict guidelines for broadcast media could hardly deter copyright infringements and it had also contended with a large number of unauthorised videos and live feeds. More than 2,400 unauthorised live streaming feeds and over 6,700 unauthorised videos on the web were found and therefore pulled down, while over 1,300 pirated blogs and websites were shut down.

2015 was a bummer for not only the audience but also the BCCI (Board of Control for Cricket in India). The organisers had failed to get permission from the copyright society which is the IPRS (Indian Performing Rights Society) for using the music for the opening ceremony although it had been taken using the songs played during the matches. A legal notice was filed against BCCI for non compliance by IPRS and BCCI had to pay the license fees for this defect.

Trademark in IPL

A trademark protection is generally extended to a word, phrase, letter, number, sound, smell, shape, logo, picture etc. The function of a trademark is to distinguish the product or the services offered by an entity from another. This dissimilarity is associated with the enhancement of the goodwill of the enterprise. 

Trademarks and protected and registered under the Trademarks ACT, 1999. Trademarks have evolved as an agent of creating goodwill of various brands and it contributes to a great extent in a brand’s business by helping them to establish their brand value. A registered trademark gives its owner the right to use, sell or license the goods and services under the brand name by which it is registered. Registration of a trademark is of the utmost importance as it forbids other people to use the registration of that particular trademark or a similar kind of trademark.

In sports, this kind of protection could extend to event names, team names and logos, domain names etc. For example, VIVO IPL, DLF IPL, Mumbai Indians, Kings XI Punjab can all be protected under the ambit of trademark. Sports name IPL in itself is a popular merchandise trademark including its teams, events and emblems which hold mercenary value and are an essential component of branding. IPL also has its exclusive caps, jersey, laptop skin, coffee mugs, mobile covers and various types of merchandise which people can buy online or from stores. This also includes signed merchandise by the players. Realising this importance of brand creating during IPL, the teams file for trademark registration of consumable products such as tea, coffee, tobacco products, aerated water, insurance, financial services, entertainment, websites and various games. 

Trademark Infringement

According to Section 29(2)(c) of the Trademarks Act, 1999, a registered trademark is infringed by a person who not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark because of its identity with the registered trademark and the identity of the goods or services covered by such trademark is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trademark. 

In 2008, a suit was filed by BCCI against rediff.com which is an online gaming company. This suit was regarding the domain name registration of the famous game ‘Indian Fantasy League’. The name of this league was seen to be deceptively similar to the IPL name and even logo. The Madras High Court in its decision said that this had amounted to a trademark infringement and prohibited its use.

In 2018, Grace India Sports Private Limited (GISPL) attempted to start Indian Junior Premier League. This league had similarities with IPL. Bombay High Court in its decision stated that since GISPL had started a league which used deceptively similar trademark and domain name such as ‘http:www.iplt20.com’ or ‘juniorsipl.com’, GISPL was banned from using these domain names and goods of the same kind.

Design in IPL

The definition of design states that it refers to a pattern, shape, configuration, ornament or composition of lines and colours applied to some article where it’s a two dimensional or a three dimensional or of both the forms, by some industrial process or means, whether manual, chemical or mechanical, separate or combined. For a design to be registered, it should be original or new.

Design gives protection for the visual appearance of the product and not the functional aspect. A design can be protected under the Designs Act, 2000. The best example of a design would be the exclusively designed IPL Cricket bat. The design IPR needs to be protected.

Ambush Marketing

Ambush Marketing is the practise by which a rival company attempts to associate the product of their company with an event that already has some official sponsors. It basically means that a company tried to exploit or advertise its brand in some event without being a sponsor of that event. It is also termed as ‘an attack from a hidden position’. In IPL, it prevails even at the entrance of the venue when the spectators are given free branded merchandise in the form of jerseys or flags.

Passing off

The law of passing off states that one trader should not misrepresent goods or services as being the goods and services of another. It also prevents a trader from holding out his or her goods or services as having some association or connection with another when they know that the goods are not owned by them.

In the case of Intellectual Property Rights (IPR), proper care should be taken towards these rights. If proper care is not taken, then the road side sellers would easily remake the products which are of much cheaper quality and sell those products to earn money and this would be a disadvantage for the owner of the trademark. People generally would prefer a cheaper equivalent material than a costly same kind of material and hence they would not want to pay more for the similar kind of material. This happens to a great extent for the merchandise of IPL such as, jerseys of various teams, caps, bats and other material.To attain protection from passing off, the owner of the merchandise should register such product under trademark and copyright. These laws protect the owner from the losses arising due to passing off. 

Conclusion

The Indian Premier League is protected by various Intellectual Property Rights which include trademark laws, copyright laws, design laws, competition laws, trade practices laws, telecommunication laws. IPL is a similar concept as the EPL and has created its own niche in the field of cricket just like EPL has done in football. IPL is the perfect blend of sports and entertainment for cricket enthusiasts. It has turned out to provide a platform for the skilful and talented young players who missed out on the opportunity to be a part of the Indian Cricket Team and follow their passion besides turning talent into profit for the investors and not just for themselves. 

Unauthorised use of IPR in IPL may lead to the infringement of one or more of the intellectual property rights of the BCCI–IPL; both civil and criminal remedies may be available in the case of these violations. The idea of Intellectual Property Rights in sport dynamics has evolved, which as a result, has made IPL and BCCI owners to take adequate care of the team and also for the smooth functioning of it without any glitches. In view of the huge amount spent on corporatisation and branding of the teams, the sports franchise owners have to take adequate care to ensure the overall protection for the trademark portfolio and its effective management and thus, IPR protection in any event plays a vital role in the sports industry.

The post Intellectual Property Rights in IPL appeared first on iPleaders.

This article is written by Uma Shankar Mishra, pursuing a Certificate Course in Intellectual Property Law from Lawsikho.com. Here he discusses “How exactly are fast track mergers carried out and can NCLT intervene in these?”.

Introduction

The word merger is an important part of Commercial business decisions and legal transactions.  Mergers are a restructuring tool which will help the transferee Company as well as a transferor company to achieve synergy and achieve Consolidation In the market.  There can be many reasons for a merger which may Include exit from a particular business by transferor Company or formation of a Partnership between two Companies to earn greater Profits. In short, merger means losing of the existence of One entity by Combining with Other to form a large unit.

The Chapter XV of Companies Act, 2013 deals with Section Compromises, Arrangements and Amalgamations. Under this Chapter, the need to get approval from many authorities such as National Company Law Tribunal (NCLT) and if the Company is a Listed Company it has to take Permission From SEBI. This takes anyway between 6 Months to 1 year. However, there are cases when the said approval took 2 years because of disputes between the buyers and Regulators. For example, in the case of Tata Docomo and Airtel. The intention of the merger was announced by both the parties in October 2017, However, the merger Completed only on 5th July 2019. It is Important for Companies to achieve their mergers as soon as possible. In case of small companies, they were being subjected to these Provisions (erstwhile section 391–394 of the CA 1956) before the enactment of Companies Act,2013. In order to solve these problems, Section 233 has been added to the Companies Act, 2013.

Application of Section 233 Of Companies Act, 2013

It is pertinent to know that this section only applies to  Small Companies defined under S.2(85) of Act, Holding Company under S.2(46) of the act are eligible for the transactions of Merger, Amalgamations and any type of arrangement under this section.

Reason for Inclusion Of Holding Company-  In case of Subsidiary and a Holding Company, this section has reduced the Cumbersome Process as earlier even there is no ownership Change It used to take 6 months For compliances Under Section 230-232 Of Companies Act, 2013.

Exception 1 – As under S.2(85) it is mentioned that  Small Public Company does not Come under the Expression Small Company therefore they cannot take advantage of section 233 Of Companies Act, 2013.

• Holding Company as defined u/s 2(46) of the Act;
• Class or class of Companies not defined under the corresponding rule of this section.

Exception 2 – Demerger cannot be done under Section 233 as the section only mentions Merger and amalgamations.

Role of NCLT in enforcing The Provisions Of fast track mergers under Section 233 Of Companies Act, 2013

The Word Notwithstanding Anything Contained in Section 230 to 232 in the Companies Act, 2013 is used which is a NonObstante Clause. The Sections 230 to 232 speak about the role of NCLT but Section 233 does not which means that the Role of NCLT is not mandatory here. 

Q) The question which arises here is that if there is No or limited role of NCLT in enforcing the provisions of this section then who has the power to enforce the provisions of this section?

Ans. Section 233 and Rule 25 Of  Companies (Compromises arrangement and Amalgamation Rules, 2016) gives power to the central government to enforce merger and not NCLT. NCLT will only be a Substantial authority. The central government has delegated its power for enforcing merger to Regional Director who is appointed by Central Government.

Companies shall file an application with below-mentioned authorities in whose jurisdiction registered office of the Company is situated.

• Union Government through Regional Director
• Registrar and
• The Official Liquidator

Difference between Traditional Merger under Section 230, 232 and Fast Track Merger under  Section 233

It is also important to note that Section 233 of the Companies Act Is governed By Rule 25 Of Companies (Compromises arrangement and Amalgamation Rules, 2016.

Important Terms and Conditions for Fast Track Merger under Section 233 of Companies Act, 2013.

Prohibition of Treasury Stock 

Section 233(10) Act prohibits the continuation of any shareholding in transferor Company by transferee Company which means that any shareholding which the transferee Company had in transferor company has to come to Zero At the time of Merger shares held by Transferee Company in the Transferor Company have to be cancelled and extinguished.

Clubbing of Authorized Capital 

Section 233 (1)  of the Act give states that if any Fee was paid by the Transferor Company (Amalgamating) on its authorized capital preceding to its merger or amalgamation with the transferee company (Amalgamated) shall be set-off contrary to the fees payable by the transferee company on its authorized capital improved by the merger or amalgamation.

Shareholder Approval 

Section 233 (1), (b) of Act states that the consent of  shareholders holding at least 90% of the total number of shares is required

Creditors Approval

Section 233 (1), (b) of Act, states that approval of  (9/10th) in value of the creditors or class of creditors is required in small private companies’ creditors are not in large number, so if 90% by value hold by few creditors than it may create problem in taking approval.

Dispensation from the Meeting 

If 90% in value of creditors agree by mode of affidavit then a meeting of creditors can be dispensed.

Not falling under the purview of section 233 of the Act 

If we read section with rule 25(6) of the Act where concerns or recommendations are received from the Registrar of Companies about the flaws of the scheme and if the Central Government is convinced with the Concerns Of Registrar of Companies that scheme is not in the public interest or in the interest of Creditors whose money is involved. Here the Role of NCLT comes which acts as a supervising authority. The Central government may file application before NCLT stating that the said  Companies application for merger and amalgamations under this section should not be entertained and The said company is free to follow the procedure laid down under Section 230 to 232 Of Companies Act,2013. This will help in Due-  diligence and Concerned Creditors during the 6 months will come to know whether their rights and interests are being taken care in this merger which could not be possible if the merger takes place under Section 233

Conclusion

We can say that in case of a Fast track merger there is no Substantial role of National Company Law Tribunal (NCLT) in approving the scheme of arrangement under Section 233 of the Companies Act,2013 read with Corresponding rule i.e. Rule 25 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Under the said section and the act, the power is given to Central Government which has delegated it to Regional Director and the Registrar of the Companies. However, the tribunal will have a role has of supervising authority under sec 233(6) of the Act where on receiving an application from the Central Government or any person, if the NCLT thinks that the scheme of arrangement is not clearly saying about how the  Rights and Interests Of the Minority Shareholders or Creditors would be affected in case of merger or amalgamation interests would be protected then it may reject the application Of person for the merger under S.233 by Giving them the reasons of For not accepting the merger in written form. After this order Companies are at liberty to go for the merger under the Section 230-232 Of the Act. 

With the advent of Section 233, the time taken for approval of merger or amalgamation for companies specified in S. 233 has reduced but still, there is scope to further reduce the time of approval by doing away with repeated Procedures.

• https://telecom.economictimes.indiatimes.com/news/bharti-airtel-tata-teleservices-to-merge-consumer-mobile-businesses/61052084
• https://economictimes.indiatimes.com/industry/telecom/telecom-news/bharti-airtel-tata-tele-say-merger-complete-dot-yet-to-formally-clear/articleshow/70030734.cms
• https://www.taxmann.com/filecontent.aspx?Page=ART&isxml=Y&id=105010000000014044&search=”fast+Track+merger”&tophead=true

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 Chandana Lakshman, pursuing a Diploma in Companies Act, Corporate Governance and SEBI Regulations from LawSikho.com. Here she discusses “What are clearing corporations and what do they do?”.

Introduction

Before the establishment of Clearing Corporation, trades were settled by account period settlement. On the introduction of clearing corporations, it has ensured market efficiency, transparency, liquidity and it also helps in reducing settlement and operational risks, savings on settlement cost. The greatest advantage of clearing corporation is now the trades can be settled within three working days which initially took one week to settle trade obligations

Clearing Corporations- Meaning

In general terms, clearing is an arrangement of trade which is done through the exchange of obligations.

For the successful completion of trade clearing corporations is essential. Clearing Corporations are commonly called as a clearinghouse or clearing firm and it is a corporation which is associated with a stock exchange, which is established to handle confirmation, settlement and delivery of transactions. Clearing Corporations helps the stock exchanges and this stock exchanges, in turn, ensures that buying and selling of securities are being correctly dealt with.

Clearing Corporation and Clearing Member- Definition [securities contract(regulation)(Stock exchange and clearing corporation) regulations, 2018]

Section 2(d) of the securities contract(regulation)(Stock exchange and clearing corporation) regulations, 2018 defines clearing corporation as “ entity that is established to undertake the activity of clearing and settlement of trades in securities or other instruments or products that are dealt with or traded on a recognized stock exchange and includes a clearinghouse”.

Section 2(e) of the securities contract(regulation)(Stock exchange and clearing corporation) regulations, 2018 defines Clearing Member as ” a person having clearing rights in any recognised clearing Corporation”.

Clearing and Settlement

Clearing

• The clearing is a process when the organisation acts as intermediary and it also assumes the role of the buyer and seller in order to reconcile the transactions that occur in the trade.
• It also includes all the activities that occur from the moment when the trade starts to till the final stage when the trade is settled.
• The activities that include clearing are reporting, risk management, and tax handling.

Settlement

• The moment clearing comes to an end, settlement begins.
• The settlement agency receives securities from the seller who wants to sell his securities and receives cash from buyers who want to buy securities and then he gives to the buyer the securities and the seller the securities.
• The buyer is obliged to pay the payment within the settlement period and the seller is to deliver the securities within the settlement period.
• The settlement period depends on the type of securities it has exchanged.
• For stocks, the settlement period is three days after the transaction.

Settlement Process

In every successful completion of the trade, there are three processes involved and they are:

• Trading

In this, the buyer who wishes to purchase the securities will give his order and seller who wants to sell his securities goes for the execution of securities.

• Clearing

Clearing determines the obligation of both the parties in relation to the funds and securities.

• Settlement

At the final stage, NSCCL acts as counterparty between the buyer and seller, and it also gives to guarantee to both the party that in case of default by any party NSCCL will take actions against the defaulter.

Clearing Corporation of India Limited

Clearing Corporation of India was first introduced under the ministry of the central counterparty in April 2001. The main objective of this corporation is to provide clearing and settlement for transactions in government securities, foreign exchange and money markets in the economy. The introduction of clearing Corporation came with a lot of benefits like there was a reduction in settlement and operational risk, there were savings on settlement cost. It also introduced various platforms for the electronic execution of deals in various market segments. It is also a trade repository for all over the counter transaction in the forex, Interest rate and credit derivative transaction.

Parties to the clearing corporation

The main parties who assist in the clearing process are:

• Depositories

This ensures in facilitating the electronic transfer of securities in a dematerialized form.

• Clearing banks

Clearing Banks acts as a connecting link between the clearing members and the NSCCL for the settlement of funds.

• Clearing Members

These members are responsible for settling the trade which is done on all the counters.

• Custodians

These members keep the securities in a safe manner and they hold the documentary proof of securities, keeping the title of securities intact in the name of the holder.

Functions of Clearing Corporation of India Limited

1. They act as guarantors in clearing and settlement functions to various parties and they also ensure that transactions occur smoothly.
2. It also acts as an agent to Financial Benchmark India Private Limited. The main role of the FBI is administering government securities.
3. They also ensure all the parties who are involved in the successful completion of transactions follow the due procedures.
4. By ensuring that goods are delivered to the buyer properly it avoids the needs for any post-settlement arbitrations.
5. They also play an active role in settlement of complex transactions at predetermined future price and date.
6. The pivotal functions are improving market efficiency, ensuring transparency, liquidity and risk management.
7. It also helps in trade settlement for wholesale markets entities like banks, insurance companies and mutual funds.

Risk involved in Clearing Corporation

• Replacement cost risk

Whenever a clearing member defaults, the clearinghouse would be liable to pay the replacement cost. It fulfils the replacement obligation by purchasing or selling the contracts identical to those on which the clearing member default. 

• Liquidity risk

By substituting itself as a counterparty to its clearing members, the clearinghouse exposes itself to liquidity risk. It does by fulfilling its payment obligations to non-defaulting members on schedule. On default of the payment, the clearing house looks into the assets of defaulting members and its financial resources to raise the necessary funds.

• Delivery risk

This is one of the biggest risk clearing corporations incurs at the time of expiry of the contracts and when they are to be settled through delivery and delivery versus payment is not achieved. There are two circumstances when this kind of risk is involved and they are:

• When the securities are delivered to the buyer before the payment is made to the seller and seller is at risk losing the value of the payment.
• When the payment is made before the securities are delivered to the buyer.

• Counterparty risk

This risk arises in circumstances when either of the party fails to fulfil their obligations on time.

• Principal risk

When both buyer and seller has fulfilled the obligation of making payments and delivery of shares but has not received the shares or funds and in such circumstances counterparty which is here NSCCL will become the buyer to every seller and the seller to every buyer.

Steps involved in settlement of trade

• Determination of obligations of both parties

These obligations are determined by NSCCL for the traders and it also acts as the central counterparty to the members.

• Pay-In funds and securities

Members after knowing their obligations they  make available funds and securities to NSCCL 

• Pay-out funds and securities

After fulfilling the Pay-In obligations, NSCCL sends out electronic instructions to the clearing banks to pass the required entries.

• Risk management

As there is a considerable time gap between the settlement of trade and execution there is a possibility of arising defaults and to minimise this default NSCCL has framed comprehensive risk management and surveillance system.

List of Clearing Corporation in India

Networth of clearing Corporation

• Securities Contract(Regulations)(stock exchange and clearing Corporation) 2018 Regulation 14(2) states in order to get recognition as a clearing Corporation under Regulation 4 the Corporation shall have a minimum net worth of one hundred crore rupees.
• Regulation 14(2)(b) states in case if the corporation goes for wind-down or recovery of operations the corporation shall have additional capital to cover the cost required.
• Regulation 14(2)(c) states as it is said above in regulation 14(2)(b) every recognised corporation shall maintain a net worth of one hundred crore rupees at all times.
• Regulation 14(4) states unless it meets the threshold limits of one hundred crore rupees it shall not distribute profits to any of its shareholders.
• Regulation 14(5) states that the clearing corporations are also required to submit an audited net worth certificate from the statutory auditor on a yearly basis by the 13 days of September of every year for the preceding financial year.

Conclusion

It is said that Clearing Corporation acts as a protective guide for all the secondary markets transactions with efficient risk management systems.

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 Soumi Ghose, pursuing a Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Lawsikho.com. She is a Legal Counsel in ICON PLC. Here she discusses- “Five interesting points of the Indiabulls Housing Finance – Lakshmi Vilas Bank merger (cover rationale for both parties and deal structure)”

Introduction

Corporate restructuring is a deep-rooted concept in the present corporate era across the world. The corporates intend to undertake restructuring with a dream of shaping their business in the most beneficial way, either in terms of its size (maybe expanding or limiting their presence) as well as profit earning.  

If the outcome or the requirement from the proposed restructured arrangement is crystal clear for the respective corporate, then the restructuring process is much more organised, smooth and leaves the possibility of happening within the desired timelines. Therefore, it becomes increasingly important for any corporate to choose such a type of corporate restructuring, which adheres to all its desires as well as needs and requirements while complying with all the laws applicable from time to time. 

Section – 230 and 232 of the Companies Act 2013 lay down provisions towards Mergers and Amalgamations. Mergers and Amalgamations of corporate bodies depend on various factors like:- 

1. Expansion and Diversification;
2. Optimum Economic Benefit;
3. De-risking Strategy;
4. Scaling up of operation for competitive advantages;
5. Increase the Market capitalization;
6. Cost reduction by reducing overheads;
7. Increasing the efficiencies of operations;
8. Tax benefits;
9. Access to foreign markets.

For this instant matter under discussion, the proposed merger between Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd. was the first-ever attempt by a non-bank lender or a non-banking financial company to merge with a bank in India. The application for voluntary amalgamation of lndiabulls Housing Finance Limited and lndiabulls Commercial Credit Limited with Lakshmi Vilas Bank was made before the Reserve Bank of India (RBI) and pursued for six (6) months before the same was rejected by the Central Bank of India.
This rejection had been confirmed after RBI had put Lakshmi Vilas Bank under the Prompt Corrective Action (PCA) framework due to a high level of bad loans, lack of sufficient capital to manage risks and negative returns on assets for two (2) consecutive years. This decision of RBI has come in shape after Delhi Police’s Economic Offences Wing registered a complaint against the board of Lakshmi Vilas Bank alleging cheating and misappropriation of funds.

On the other hand, details available for Indiabulls clearly states that prior to this plan of getting merged with Lakshmi Vilas Bank, IndiaBulls Housing Finance Ltd. had already submitted an application as it wanted to start a bank of its own, however, its proposal was rejected by RBI. The reason as confirmed by RBI for this rejection has been apparently that Indiabulls does not come under the fit and proper category to be granted a banking licence. 

In addition to the above, this proposed merger plans between Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd. had been viewed by many experts as a backdoor entry of IndiaBulls Housing Finance Ltd. as a Non-banking Financial Company into the banking sector and to make this arrangement (i.e merger with Lakshmi Vilas Bank) as an alternate channel for Indiabulls to fulfil their desire of nurturing the banking business. Amongst several other reason for rejection, which the central bank of India- RBI would have high-lighted, it can also be construed under the Doctrine of Colorable Legislation, one of the very core doctrines laid down under the Constitution of India, which indicates that what can’t be done directly, cannot also be done indirectly. To interpret this Doctrine of Colorable Legislation in this present context, it can be rightly said that this doctrine forms a touch base for Indiabulls when it did face rejection in obtaining the banking license, so, from a completely different perspective, Indiabulls wanted to get into the new arrangement with Lakshmi Vilas Bank. 

The Indiabulls Housing Finance and Lakshmi Vilas Bank first proposed the merger saying that the amalgamated entity would create a large, healthy and diverse asset portfolio, which will benefit from stable low-cost funding in the form of public deposits and a wide distribution franchise. Subsequently, the two firms amended the structure of the merger deal which envisage.
the amalgamation of Indiabulls Housing and Indiabulls Commercial Credit into the bank. The Indiabulls Group also continued to reduce its exposure to the real estate sector, in order to meet the RBI’s rules for new bank licences. These rules state that an entity is only applicable to apply for a bank licence if the non-financial businesses contribute less than 40 per cent to the group’s business.
State of Indiabulls – pre-merger plan and post rejection of merger plan by RBI 

Since August 2016, the banking regulator RBI has laid down certain strict guidelines regarding licensing for new banks.  Under these guidelines, RBI permits Non-Banking Financial Companies to apply for a banking licence, subject to certain conditions.
It is often understood that Indiabulls being a Non-Banking Financial Companies, had chosen not to make a further attempt for the RBI’s guidelines to opt for the banking license after being rejected initially but had preferred to merge with Lakshmi Vilas Bank and in turn to get the license for banking business. 

State of Lakshmi Vilas Bank – pre-merger plan and post rejection of merger plan by RBI

RBI have placed Lakshmi Vilas Bank under its prompt corrective action framework. The restrictions were placed by RBI on Lakshmi Vilas Bank were due to the followings:-

1. high level of bad loans;
2. weak capital levels;
3. a negative return on assets; and 
4. high leverage.

The RBI said in one of its notification to the stock exchanges. As of the quarter ended June 30, 2019, the bank reported a net loss of Rs. 237 crore. Its gross non-performing assets ratio stood at 17.30 per cent, while net Non-Performing Assets stand at 8.3 per cent. The capital adequacy ratio for Lakshmi Vilas Bank stood at 6.46 per cent. The restrictions placed on the Lakshmi Vilas Bank was with a view that the bank would reduce its lending, particularly to the riskier loan segments. Even after laying down these restrictions, the Chennai based Lakshmi Vilas Bank was expected to look for ways to raise capital to help provide for its bad loans while improving its capital adequacy ratio.

Interesting points of Indiabulls Housing Finance – Lakshmi Vilas Bank – merger

There have been several discussions as to why RBI after pursuing the application for a prolonged period of six (6) months and despite Indiabulls being a white knight for Lakshmi Vilas Bank. There is always an air of doubt as to the actual rationale which brought these two institutes closer to each other, with the plan of merging with each other. 

From the scenarios prevailed prior to both Indiabulls and Lakshmi Vilas Bank have come up with their proposed plans for a merger, it can be well submitted that neither parties had a clean hand to commencement the relationship. In other words, both these parties were relying on the proposed merger with a certain ulterior motive. 

It is also being reported that “All India Bank Employees Association (AIBEA) has urged the Reserve Bank of India (RBI) not to give nod for the merger”. While requesting RBI not to give nod to the proposed merger plans of Indiabulls Housing Finance and Lakshmi Vilas Bank, All India Bank Employees Association (AIBEA) had also mentioned in their communication that “as it is already known that Indiabulls Housing Finance Ltd had applied for a banking licence to start a bank on its own but the same was not sanctioned by the RBI, ostensibly for the reason that the company does not come under the fit and proper category to be granted a banking licence”. 

The General Secretary of All India Bank Employees Association (AIBEA) has also stated that RBI is aware of Lakshmi Vilas Bank’s financial health, which has not been good at all, it has also suffered Gross Non-Performing Asset in the tune of 14% of its total of the total advances for the quarter ended on December 2018. 

The criteria of fit and proper were questionable for both parties i.e Indiabulls and Lakshmi Vilas Bank for the proposed merger. This has resulted in several rounds of discussion and understandings even amongst the people at large. However, these discussions were never free from the thought that the proposed merger might be rejected by the Central Bank of India at any point of India for the ambiguity and issues entangled with either party. 

The rejection of this proposed merger arrangement came in from RBI after pursuing the application for a prolonged period of six (6) months and despite Indiabulls being a white knight for Lakshmi Vilas Bank. After this rejection of the merger proposal by RBI, the future of Indiabulls Housing Finance had been pushed into an air of trouble and discomfort. This rejection further jeopardises the funding situation for Indiabulls Housing Finance.

Conclusion

In addition to all the above-stated facts and figures, it is noteworthy to mention that this proposed merger was also duly scrutinised by the
Competition Commission of India (CCI) and it had given its nod to the proposed merger. However, as the final decision of the regulator in the banking sector, RBI has decided to reject this proposed merger plan and the parties duly accepted the rejection too.  

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

The post Five Interesting Points of the Indiabulls Housing Finance – Lakshmi Vilas Bank Merger appeared first on iPleaders.

This article is written by Mehak Jain, a student of the Hidayatullah National Law University, Raipur.

The Journey from Transgender Day of Remembrance to Gender Justice Murder Day

December 17, the day on which the Trans Persons Protection of Rights Bill was passed is regarded as a “Black Day”. On this day, the bill which was supposed to acknowledge and resolve the concerns of the marginalized transgender community in India, was passed hurriedly by the Lok Sabha. But even after 27 amendments, the Bill failed to address the major concerns highlighted by India’s trans community.

A trans person is a person who’s self-perceived gender identity differs from that at the time of birth. It includes Hijras, Kothis, Aravanis and other communities in India. These communities face abuse on a day-to-day basis and undergo a lot of struggle to carry on with their lives. In 2014, with the NALSA v. UOI judgement of 2014 was passed in their favour, they looked forward to a better life. However, the Trans Persons (Protection of Rights) Act of 2019 diluted what the judgement aimed to seek and gave rise to new problems for the community.

A rich history

Transgender persons have been a part of Indian society for centuries. The concept of “trityaprakriti” or “napumsaka” has been an integral part of India mythology.

Vedas recognised the being of three genders. They described individuals belonging to one of the three categories, based on one’s nature or prakriti. One of the most fundamental texts of ancient Hindu law, Manu smriti, explains the biological origins of the three sexes. According to this, if the quantity of male seed is greater, a male child is produced. If the quantity of the female seed is greater, a female child is produced; and when both are in equal quantities, a third-sex child is produced. 

Both of the most eminent Hindu epics, Ramayana and Mahabharat acknowledge the existence of third gender, by the characters of Shikhandi and Aravan. The Hijras of Tamil Nadu consider Aravan their progenitor and call themselves Aravanis.

Even in the Islamic world, Hijras played a conspicuous role in the royal courts. They rose to illustrious positions such as political advisors, administrators, generals as well as guardians of the harems. Hijras were considered clever, trustworthy, and fiercely loyal and were closely associated with the kings and queens. They enjoyed significant power and authority during this period.

However, the introduction of British period brought about new legislations which criminalized transgender persons which led them to marginalization and discrimination.

The Criminal Tribes Act

The Criminal Tribes Act was a product of British rule, by which entire communities were criminalized by designated as habitual criminals. This act painted entire ethnic and social communities in India as “addicted to the systematic commission of non-bailable offences” and imposed restrictions on their movement as well as incorporated their arrest.

The law was apparently created to bring into account groups like Thuggees and other tribal communities; however, it also included provisions limiting the rights of transgender communities in India. The label “eunuch” was used as an umbrella term to catch anyone who did not conform to traditional British ideals of masculinity.

The act was repealed in 1952; but by then, significant damage had already been cast on the community.

The landmark NALSA Judgement

In 2012, National Legal Services Authority, a statutory body constituted to provide free legal services to eligible candidates, filed a writ petition before the Supreme Court of India seeking a legal declaration of transgender persons’ gender identity than the one assigned to them at birth, and that this non-recognition violates Article 14 and Article 21 of the Indian Constitution.

The Court analysed legislations of other countries in the world, which included United Kingdom, Netherlands, Germany, Australia, Canada etc., to highlight the fact that the recognition of “sex identity gender” of persons and “guarantee to equality and non-discrimination” on the ground of gender identity or expression is increasing and gaining acceptance in international law and therefore be applied to India as well.

A wide range of transgender related identities, cultures and experiences were perceived which included Hijras, Eunuchs, Aravanis and Thirunangi, Kothi, Jogtas and Shiv-Shaktis.

The Court also called attention to abide by international conventions and norms for the interpretation of gender equality. Article 1 of the Universal Declaration of Human Rights states that all human beings are born free and equal in dignity and rights. Articles 3 and 5 also provide for the same. The International Covenant on Civil and Political Rights and the United Nations Convention against Torture or Other Cruel Inhuman and Degrading Treatment or Punishment were other such conventions which talked about safeguarding the rights of the marginalized and discriminated.

Special attention was drawn to the Yogyakarta principles. The Yogyakarta Principles are a set of principles on the application of international human rights law in relation to sexual orientation and gender identity. The Principles affirm binding international legal standards with which all States must comply. They promise a different future where all people born free and equal in dignity and rights can fulfil that precious birth right.

The Supreme Court held that gender identity and sexual orientation include transgenders and that “[e]ach person’s self-defined sexual orientation and gender identity is integral to their personality and is one of the most basic aspects of self-determination, dignity and freedom and no one shall be forced to undergo medical procedures […] as a requirement for legal recognition of their gender identity.” [para. 20] The Court also declared persons apart from binary gender(such as Hijras and Eunuchs) as “third gender” to safeguard their rights under Part III of the Indian Constitution.

The writ petition was allowed and an expert committee was constituted to make an in-depth study of the problems faced by the Transgender community and suggest measures to ameliorate their problems.

Historical Context of the Act

The Supreme Court of India delivered its judgement in NALSA v. UOI in 2014, in which it upheld a transgender person’s right to self-perceived identity and recognised their rights. While the case was still going on in Court, an Expert Committee report was published in 2014 which highlighted the issues relating to the transgender communities. 

In this background, Tiruchi Siva of the Dravida Munnetra Kazhagam part introduced a private member’s bill in the Rajya Sabha named Rights of Transgender Persons Bill, 2014.

The Bill was unanimously passed by the Rajya Sabha pn 24 April 2015. However, the bill underwent significant changes when the government drafted its own version of the bill. It was sent to the Law Ministry and was known as the Rights of Transgender Persons Bill, 2015. On 26 February 2016, the bill was introduced in the Lok Sabha by Baijayant Panda of the Biju Janta Dal party, and was discussed on 29 April 2016.

Following the 2014 general elections, the 2016 bill was tabled while the 2014 bill passed by the Rajya Sabha continued to be pending. The former bill was referred to a standing committee which submitted its report in July 2018. The Lok Sabha tabled and passed a newer version, which also lapsed. 

Post the 2019 general elections, the bill was reintroduced in the Lok Sabha on 19 July 2019 by the Minister of Social Justice and Empowerment, Thawar Chand Gehlot and was passed undebated amidst the chaos following the revocation of Jammu and Kashmir’s special status by the Parliament. It was subsequently passed by the Rajya Sabha and signed by the President of India on 5 December 2019 and obtained the form of law.

Features and Aspects of the Act

Section 2(k) of the Trans Persons (Protection of Rights) Act of 2019 defines transgender person as someone whose gender does not align with the gender assigned to them at the time of birth.

Such a person need not have undergone Sex Reassignment Surgery or other such therapies, and includes persons with intersex variations and persons having other socio-cultural identities.

The Act further prohibits discrimination against the community on certain grounds, including unfair treatment by or denial from workspace, educational, health and other institutions.

The most important aspect of this Act, Section 4(2) gives a trans person a right to “self-perceived gender identity”, i.e. the personal sense of one’s own gender. 

Sections 5, 6 and 7 necessitate the obtainment of a certificate of identity by the District Magistrate, which shall confer rights and be a proof of recognition of their identity as a transgender person. They also provide for a revised certificate in case a transgender person undergoes surgery to change gender either as male or female.

Subjecting a trans person to any harm or injury, including mental, physical, sexual and economic abuse shall be punishable with imprisonment from 6 months to two years and with fine.

The National Council for Transgender Persons was also constituted by the Act. Its main functions ensure excering the powers as well as performing the functions assigned to it by the Act. The Union Minister in-charge of the Ministry of Social Justice and Empowerment is the ex-officio chairperson of the Council.

Lacunas and demands

While the Act can be said to be progressive in nature, it has certain anomalies and discrepancies which go on to prove that it needed further refinement and was passed hastily.

The ambiguity in the clause referring to the obtainment of identity certificate approved by the district magistrate makes Section 4(2) and Section 5, 6 and 7 have a head-on conflict. Ironically, the Act allows the individual to self-identify their gender, and yet it still mandates confirmation from a district magistrate. This very procedure separates them from the mainstream genders and results in further ghettoization. If a-cis gendered person isn’t subjected to the mandated requirement and humiliation of undergoing through screening to obtain their a certificate which gives them their identity, why does a trans person have to? The law is silent about the procedure of this screening process too. 

The trans person has to stand in front of the DM and convince them that they are transgender. No redressal mechanisms have been addresses in case the DM does not issue such a certificate to the transgender person. 

Apart from National Councils, State and District level Councils need to be paid attention too. “A person from a district in Odisha would have to travel all the way to Delhi for grievance redressal as mentioned in 17D of the clause. Many transgender persons do not have the socio-economic capacity to do this and the Bill does not factor this in.”

The Bill aims at inclusivity and yet it demarcates significant different between a trans-woman and a cis-woman.

There’s only one clause mentioning sexual crimes against a trans person, which groups all sexual crimes, ranging from sexual abuse to rape together. It is even further discrepant as the penalty for sexual crimes against a transgender person carries a relatively light sentence of up to 2 years in prison, whereas rape against a cis-woman under the IPC warrants life-term sentence which may extend to death in the rarest of rare cases.

Section 18 of the Bill does not subscribe penalties if the police officers refuse to register their complaints or the doctors refuse to provide them services.

The Bill originally provided that no trans person can be separated from their family, owing to their identity, except on Court’s order. Clause 12 of this Bill, now seeks to limit it to transgender children and not transgender persons, pursuant to the recommendations of the Standing Committee. People may discover their sexual identity when they are no longer children by the definition of the law, and then they may be thrown out of their parental home. So by restricting this right to children, we are committing an injustice.

A critical analysis of the Act shows how there’s certain flaws which need to be addressed, else they’ll do more harm than good. Essentially, the object of this Act is not only to give legal rights to the trans community, but to also ease their entry into the mainstream and help them live their lives with dignity and equal rights. The trans community is also human after all, who occupied powerful influential positions in the past. This Act should be a measure to undo the wrongs committed to them and translate them into equally important, dignified and productive members of the society.

The post The Trans Persons (Protection of Rights) Act, 2019 appeared first on iPleaders.

This article has been written by Lalit Ajmani, a practising advocate in Delhi.

It is not a twisted fact that the English is often considered as a parameter to judge an individual. Moreover, the need to become efficient on this subject can hardly be doubted. Our school system has many flaws, but this system has rightly emphasised on the importance of the foreign language. How successfully our school system has been doing is a matter of personal analysis. Nonetheless, the journey to learn and adopt this language has never been easy for most of us.

On these lines, when we talk about lawyers, they seem as the masters of this foreign subject. Lawyers astonish the society with their fluency, command and what not when it comes to the usage of this alien language. Lawyers have not only embraced the beauty of the language, but also become the experts in this arena.

It is an axiom that language is a tool of the lawyers which they exploit for professional needs. The experts often get bewildered after hearing the widely known facts from the costly tongue of a lawyer. It was the battery of lawyers who was able to prove and justify the cruel decision to impose emergency and again the lawyers assisted the Hon’ble Apex Court to come save the constitution. 

The profession of lawyers is being driven by language. Throughout their careers, lawyers keep reading, writing and drafting various kinds of documents and arguing cases in the fashion which suit the welfare of their clients. The arduous job is not easy and it requires a lot of effort and genuine application of the intellect. And due to this tumultuous job, lawyers are rightly portrayed as experts of the foreign language. But every tale has more than one aspect and the matter in hand is not an exception. The truth has hardly consisted of one facet and it’s the untold facet which makes the truth interesting.

Nowadays, the author is witnessing that few professionals have started relying heavily upon the old/ existing drafts. The passion of doing something out of the box is getting rare with the passage of time. Not only this, while drafting, the professionals often don’t appreciate the essential aspects of drafting and peculiar requirements of the case in hand. Resultantly, the professionals end up paraphrasing the old draft which often hampers the case. This practice is not unusual, and being followed consciously and unconsciously by more than just a few. However, the quality delivered by the many lawyers can hardly be challenged and always appreciated. The aforesaid issue signifies something which is slowly, but gradually starts affecting the creativity and the originality in the work of the experts.

Today, the professionals are supposed to prepare more than one final draft on a daily basis and Sundays often fail to make any exception. In such a scenario, it is utmost difficult for any professional to do the work without the help of existing drafts. Nonetheless, there are ample missed opportunities where the professionals have the opportunity to justify their expertise. 

The issue is not limited to drafting only, the problem has already curtailed the creativity in pleadings. Additionally, the scope of creativity is now limited to find new synonyms; and the words which are not very easy to pronounce. The urge to find unusual words often takes the lawyers to the pages of lexicons and tomes of other languages. But sadly, the originality and genuineness could hardly see the daylight. The same style of writing, pleading, drafting is being used by different lawyers who don’t even think in a similar fashion. 

However, the requirement to maintain the uniformity is not being challenged. The voluminous work can’t be done in the absence of uniformity. But, it doesn’t mean that the original ways and ideas can’t be honored. The aforementioned serpentine activity is limiting the creativity and killing the beauty of language. Thus, it is important to revisit the said practice. 

It’s always better to propose or scrounge a solution, rather than merely contemplating and discussing the problem. The issue in hand can be solved by slight adjustment. Additionally, inspiration can be drawn from the works of the judges.

Judges who handle many matters on a daily basis have never failed to impress the society by their rich judgments. Judges keep showing delivering justice in a beautiful manner. The judges’ daily achievement shows that the new thoughts and ideas can very well be appreciated by pen. Judges of various courts take a lot of pain to craft the law in the aesthetic manner. There are countless judgments which are known for the way in which they are beautifully woven by the language.

The time can’t be more appropriate to revisit the practice and take a much needed lesson. And yes, the decision to stand on one’s line of thinking and using the tool in a novel manner may attract critics, but the worthy attempts often attract the fear of being criticized.

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This article is written by Mohd Sarim Khan from Lloyd Law College.

             “Never forget that justice is what love looks like in public” 

                                                                                                          -Cornel West

A Career in Bihar Judicial Services

As a law graduate, we have many options, we can opt to join in house counsel, advocacy, corporate firm, etc. But judicial service is one of the noblest professions in the legal system. Judges are responsible for administrating, interpreting and applying laws and articles of the Constitution. Judicial officers enjoy a sense of security, intellectual and social satisfaction, high self-esteem, work- personal life balance and most importantly a respectable position in society. In spite of this, no position or money can compete with the feeling a judge feels when the parties stand in front of him/her in the hope to get justice. In this Profession, there is a lot of respect and power to decide on the matter relating to the nation.

Cases such as the Nirbhaya Case or Terrorist case which realize the power of the judge. Judges in India seem to be like God for Victims as they solve various critical issues relating to the offenses or serious crimes done by the Convict.

If you are passionate to become a judge and want to deliver justice, then appearing for the 31st Bihar Judicial Services Competitive Examination is a very bright opportunity. 

How to become a Judge in the State of Bihar

Within the State of Bihar, there are two paths through which one can become a Judge:

• The first is by appearing and getting selected for the lower judiciary competitive exam conducted by the Bihar Public Service Commission. 
• Secondly, by appearing for any competitive exam for the Higher Judiciary after litigating for a minimum of 7 years before any High Court / District Court.

The focus of this article shall be upon the civil judiciary services of Bihar.

Frequency of exam

It is conducted yearly or twice a year depending upon the number of vacancies estimated by the Patna High Court. The tentative dates for the 31st Bihar civil judiciary preliminary exam are going to be conducted in July 2020  and the mains exam falls in September 2020.

Number of seats

Bihar is the second most populated state in India with a population of approx 10 crores in which 89% of people are in the rural area. Approximately for every 73,000 people, there is one judge in the State who sorts a huge bundle of cases in the Court. However, with the creation of adequate infrastructure as well as the impending need to finish the pendency of cases in the judiciary, the urgent need to recruit more number of civil judges are constantly being realized by the Patna High Court. This year in 2020, Bihar civil judge PCS J has 221 seats in total. 

Eligibility

The following essential qualifications must be met:

• The candidate must be a citizen of India.
• The candidate must be a holder of a degree in Law which is recognized by the Bar Council of India**. 

**Please note that enrolment with the Bar as an Advocate is not a condition for appearing.

The candidate shall attain the minimum age prescribed i.e 22 years from date 01.08.2019. If a candidate crosses the age of 35 years from date 01.08.2018, he shall be ineligible. However, the upper age limit relaxation is of 5 years for Female, P.H category candidates.

Mode of applying

Applications are received online. A candidate is required to register himself or herself as a ‘new user’ on the Bihar Public Service Commission website (http://bpsc.bih.nic.in/).  Who has already registered with the website is required to click on the ‘registered user’ link, available on the website.

The gate of fee payment is through e-payment e.g. Debit Card, Credit Card and Net Banking (Rs. 600 for General Category and Rs. 150 for S.C/S.T/P.H. of Bihar domicile and Rs. 150 for all category Female of Bihar domicile). 

Centers for Examination

Preliminary Examination: Gaya, Muzaffarpur, Buxar, Bhagalpur, Darbhanga, Araria, Aurangabad, Banka, Motihari, Khagaria, Madhubani, Bihar sharif, Patna, Samastipur, Siwan Chhapra, Sahebganj.

Mains and Interview: Patna

Scheme of the Exam

The Preliminary consists of two exams:

• Preliminary Exam One Consists of two papers-
• General Science is of 100 marks and has 100 questions.
• Vidhi law is of 150 marks and has 150 questions.
• Preliminary ExamTwo Consists of eight papers-
• General knowledge including current affairs
• Elementary general science
• Law of evidence & procedure
• Constitutional law and administrative law of India
• Hindu law and Muslim law
• Law of transfer of property, principal of equity, the law of trust and specific relief
• Law of contract and tort
• Commercial law

The second Preliminary exam consists of eight papers all are compulsory to attempt. The candidate has three hours to give the exam.

The result of the preliminary exam is declared within 30-35 days. 

A candidate has approx. 30 days to prepare exclusively for the Mains exam after the preliminary examination.

The mains exam consists of five compulsory papers-

Mains exam consists of eight papers in which five are compulsory without any option and three are optionally selected from the list given in list 2.

List- 1

• General knowledge including current affairs is of 150 marks.
• Elementary general science is of 100 marks.
• General Hindi is of 100 marks.
• General English is of 100 marks. 
• The Law of evidence and procedure is 150 marks.

Consisting of five optional papers out of which each candidate has to select three subjects of their own choice.

List-2

• Constitutional and administrative law of India is of 150 marks.
• Hindu law and Muhammadan law is of 150 marks.
• Law of transfer of property, principal of equity, the law of trusts and specific relief is of 150 marks.
• The Law of contract and tort is 150 marks.
• Commercial law is of 150 marks.

Candidates have appeared for eight papers of exam in mains in which five papers are compulsory and three are from optional category.

On the basis of the merit list of mains exam, three times of total seats offered candidates are called for the interview. 

An interview is of 100 marks and a minimum of 35 marks are compulsory to pass in the interview otherwise the candidate will be rejected.  

Syllabus

 QUALIFYING  PRELIMINARY EXAM

• So far in this First exam of Preliminary, all the question are MCQs based.
• There is no negative marking in the examination.

 PRELIMINARY EXAM

• So far as Paper-I, Paper-II, Paper-III, Paper-IV, Paper-V, Paper-VI, Paper-VII, Paper-VIII are concerned. The syllabus is for the mains examination.
• The subjects and syllabus for main (narrative) examination are as follows:

Mains Exam

So far as Paper-1, Paper-2, Paper-3, Paper-4, Paper-5 are concerned, the syllabus for the mains examination is the same.

The subjects and syllabus for Preliminary (narrative) examination and marks for each paper are as follows: 

• For mains examination, each candidate shall have to select three subjects from Paper-6, Paper-7, Paper-8, Paper-9, Paper-10  

Weightage of each subject and specific strategy

Preliminary Exam                                

Marks: 150 marks

The weightage of the Bihar preliminary exam is mainly considered on general knowledge and general science:

• General Science and General knowledge
• Indian Contract Act and Transfer of Property Act in Civil Law II 
• Hindu law and Muhammadan law
• Law of contract & tort
• Commercial law
• Constitutional and Administrative law of India Constitutional 
• Law of evidence and procedure

Bihar judiciary focuses mainly on general knowledge and general science very few law subjects are asked in the preliminary exam to try to consider more on the general knowledge. In the whole syllabus of preliminary neither CrPC nor CPC is included it can also be a plus point for the candidates.

After the changes in the question format in Bihar judiciary rather than four multiple answers in question now it is five answers, you have to select one correct answer out of five.

Preliminary exam marks are not counted to get the rank only mains and interview are counted to get final rank. 

Mains Exam

Marks: 1000 marks

The mains exam paper is divided into 2 parts. The first part is compulsory, five papers, while 5 papers are optional.

• General knowledge and current affairs
• Elementary general science
• General Hindi*
• General English*
• Law of evidence and procedure 

*General Hindi and General English paper is just to the qualifying exam you need a minimum 30 marks to qualify Hindi and English paper these marks will not be counted in mains.  

Rest the same mains exam also focus on the general knowledge.only 10% of the students will appear in the mains exam and cut off for appearing in mains exam shall be 45% for the reserved category and minimum 40% is must for the general category to appear in the mains exam. The rest three papers are important and count in the mains.

There are five subjects on an optional basis out of which every candidate has to select three subjects to attempt them in the mains exam.

• Commercial law
• Constitutional and Administrative law of India Constitutional 
• Law of evidence and procedure
• Hindu and Mohammedan law

After the selection of three subjects from the optional list, each candidate has to give the mains exam of eights paper.

Interview

Marks:120 marks

There is huge competition to crack the interview because maximum students are rejected in an interview for not getting a minimum of 35 % marks to get qualified for the interview otherwise you will be rejected.

Bullets Points

• Bihar judicial exam mainly focuses on general knowledge and general science, while studying law subjects make equal time for general knowledge also. 
• In the past, the law of Indian Evidence and procedure has proven to be advantageous to candidates who have appeared for the mains examination. 
• Many questions in the mains exam paper are repeated from the previous year paper, thus, it is not good to ignore while preparing.
• Carefully read all the illustrations of all Sections of the Bare Act as often questions are directly framed upon them.

Level of Competition

Bihar judicial exam competition level is increasing day by day because the number of students appearing in the exam, now not only students of Bihar but other state law graduates and law students move toward the Bihar judiciary. 

The syllabus pattern of the judicial exam is not very difficult.  Focus is more on procedural law rather than substantive law in the mains exam. One important thing to note is that the preliminary exam is just for qualifying, no marks will be added in the score of the students and only mains and interview will decide the rank of the candidate. The number of students who are appearing from Bihar as well as adjoining areas saw an exponential rise. 

Thus, a great number of seats are offered in the judiciary, which means great numbers of candidates will appear in the exam and the level of competition will be high. Candidates must still be conscious of the fact that the real competition is always between a few serious candidates.

How to Prepare?

The key mantra to crack the BPSC exam is to ‘divide and learn and make continuous extensive revision.’ It is advisable to create a daily basis schedule and cover the entire syllabus in the limited time, so that proper revision can be done, it is not important how much you learned rather how much you retain with you. Adequate time shall be allotted for the revision. 

Ladders to preparation

• First, pick up the lengthy and relatively difficult laws such as the law of evidence & procedure and commercial law. 
• Give yourself a time frame of 4-6 months to cover them once. 
• Cover the following laws together for a better understanding:

• Contract Law and Specific Relief Act
• Transfer of Property Act and Hindu Law
• Commercial law and Indian Evidence Act

• Whichever subject you choose from optional subjects list, first go through the past year papers of both prelims and mains to have an idea about the types of questions that have been asked in the previous year exam. 
• Since the preliminary exam comprises MCQs questions, regular revision is extremely important.
• The best technique to remember the section of the bare act is to attain the skill of framing the questions from it, this skill is acquired by the student once the student has complete clarity of provision of the bare act.
• Make specific sets of notes to be used for last-minute revision.
• An attempt at least 10-20 Multiple Choice Questions from the topics that have been covered on a daily basis to regular revision. 
• The language paper is in both Hindi and English.
• As general Hindi and general English are also part of the mains exam but for the qualifying nature make some time to give English and Hindi grammar, make a habit to write in Hindi with handwriting.    
• Daily familiarisation with 10 new words from Hindi vocabulary is advisable along with the revision of Hindi grammar and English essays after the mains exam.
• Read the editorial section of an English newspaper such as The Hindu, Times of India.

Mistakes to avoid while preparing

• The preparation of the mains and prelim shall go hand in hand. Focusing more on theory is not a good strategy while MCQs questions are kept for the last days of preparation. 
• Waste time in collecting and covering a lot of material when the key is to read and revise the same material again and again and never forget that most of the questions are framed directly from the Bare Act. It is more fruitful to make short questions from the provision of the bare act. 
• Leaving the lengthy laws for the end, first, try to cover short law.  
• Ignoring past year papers or leaving them only for a reference and sample paper for the end. 
• Socialization and discussion over the exam spending times are also a fruitful act than actual studying. 

Reference

Website of BPSC: http://bpsc.bih.nic.in/

GIVE YOUR

HUNDRED PERCENT 

WITHOUT THINKING OF RESULT

The post Everything about Bihar Civil Judicial Competitive Examination appeared first on iPleaders.

This article is written by Yash Singhal, a student pursuing B.A.LLB from Vivekananda Institute of Professional Studies, New Delhi. This is an exhaustive article which deals with the various aspects of witnesses under the Indian Evidence Act, 1872.

Introduction

The witnesses are a crucial part of a criminal case with their testimony being the major proof in favour of or against the accused providing a fair judgement delivered on the principle of justice. The Indian Evidence Act provides certain provisions as to the persons capable of testifying in court of law and its admissibility. The article covers an extensive research based article on the information of the provisions on witnesses in the Indian Evidence Act.

Who is a witness?

The Criminal Jurisprudence in India has been established on certain principles founded by the Judiciary through its pronouncements. These are exhaustive in nature with wide acceptance across the country.

1. It is a presumption that every accused is innocent until proven guilty in a court of law provided all principles of natural justice were followed in a fair trial.
2. The burden of proof lies on the prosecution to prove the guilt of the accused rather than him proving innocence.
3. The proof shall be conclusive enough to prove the guilt beyond the reasonable doubt.
4. In case of any doubt regarding the guilt of the accused, the benefit of doubt is provided to the accused and he shall be acquitted.

To satisfy all these requirements of criminal jurisprudence, just and fair trial are carried out with each party putting their contentions before the judge. Investigation is the tool to detect a crime which comprises omissions by the investigating officers, later to be completed by the testimony of the witnesses that had first hand information of the crime committed. The statements by the witnesses are submitted as evidence in a Court made under an oath, whether oral statements or written testamentary deposition. It is the obligation of the witness to assist the court in delivering justice by attending the proceedings when required.

Who can be a witness?

Section 118 of the Act states the persons who can be a witness. The court identifies all competent individuals who can testify with proper knowledge of the crime. There are restrictions placed in consideration by the court on those who are incompetent in understanding the questions put to them, these include:

• by tender years;
• extreme old age;
• disease, whether of body or mind, or any other cause of the same kind.

The condition of the witness does not bar him from testifying but his incompetency to understand the questions or answer rationally exclude him from being a witness.

Different kinds of witnesses

1. Prosecution witness – Any witness who has been brought into the court to testify by the prosecution while supporting their claims.
2. Defence witness – Any person who justifies the contentions of the defence by providing such statements that can discharge the accused from any charges filed.
3. Eye witness – Any person who helps the court by describing the acts committed on the crime scene with complete authenticity as it was present there and has first hand information.
4. Expert witness – Any person who has the professional, educational or judicial expertise on the matter beyond any average individual, and the court can rely on its testimony to declare a verdict.
5. Hostile witness – Any person who by his consequent statements gives out an impression of not letting out the truth or not desirous of hiding the truth.
6. Child witness – A child who has the understanding of the questions of the court or has the rational answers to the questions put forward can testify in a court as per section 118 of Indian Evidence Act.
7. Dumb witness – Any person who is not capable of giving oral statements can be allowed to provide statements in written declaratory form in the court. Such written statements shall be deemed as oral evidence.
8. Chance witness – Any person who by the matter of coincidence happens to be present at the site of crime committed.
9. Accomplice witness – Any person who was connected to the crime in its illegal commission or omission provides the statements in the court.
10. Interested witness – Any person who has some interest in the case or its verdict in order to extract some material benefit out of it.

How can dumb witnesses provide evidence? 

Every witness is important to the court for its statements regarding the crime committed helping the court in delivering justice. The inability of a witness to speak shall not be a hindrance in him testifying before a court, thus, Section 119 of the Act provides the dumb witnesses with other means such as by writing or signs which could be understood in the court. The written statements required to be made in an open court, given equal values as an oral evidence.

Lakhan v. Emperor

This case states that if a person has vowed to keep silence owing to a religious practice, he shall testify in writing answering all the questions put to him and this be submitted in court as evidence.

Admissibility of a child witness in a court of law 

A testimony by a child in a court of law is not given much importance due to the possibility of the coercion induced statements which would threaten the authenticity of the witness. A child can have a different perspective to different situations according to their mental development.

The maturity of every individual is subjective to the environment he/she resides in and the socio-economic development of that individual.

Suresh v. State of Uttar Pradesh

This case states that a 5 year old child testifying would be admissible as evidence in a court if he understands the question and has the capacity to answer rationally. It was declared that no minimum age is required for a witness to testify in a court.

Santosh v. State of West Bengal 

This case states that a child of 12 years is more mature than a 7-8 year old and that on the satisfaction of the court on the competency of the child to understand the questions put to him, he can be considered a witness to the case.

Principle of Vol dire Test

This test was established to identify the competency of the child to be a witness according to the conditions provided in section 118 of the Indian Evidence Act, 1872. The child can be asked some questions out of the scope of the case details which include preliminary questions on name, father’s name or their place of residence. If the court is satisfied with the answers of the questions, the capability of the child to understand the questions and answer them rationally, can the child be allowed to testify in court.

State v. Yenkappa

This case states that a man who killed his wife and his adolescent children gave testimony against their father leading to his conviction. The question over admission of child witnesses was raised in the appeal. The man contended that his children were tutored thus their statements need not be accepted. It was decided that the age of the children does not restrict them from testifying but also an innocent cannot be held guilty on the statements of child witnesses as they can be easily tutored.

Rameshwar S/o Kalyan Singh v. State of Rajasthan

This case states that every person is competent to testify in a court of law unless restricted by the court itself in matters of the witness not understanding the question put before him/her. 

Child Abuse in cases of sexual violence and molestation

The cases of sexual violence and molestation against children in India have been observed in the recent past with the 2007 survey of Ministry of Women and Child Development showing 53% of children been sexually abused. The children witness in their own cases of sexual violence are scared of disclosing the same to their parents which led to the enactment of ‘Prevention of Chilren from Sexual Offences (POCSO) Act, 2012’ to punish the sexual offendors committing such crimes against children.

The statements made by a child are always questionable, but there is a requirement to devise systems to verify the testimony, free from any external factors and deal with extreme care and caution.

Interested persons as Witness

An interested person according to the English Law is someone who has any material benefit from the case. The one who has an interest in the outcome of the case by virtue of him attached to the case in some manner.

Whether evidence by an interested person is credible or not

The court shall take utmost care while hearing the interested person testifying in a court and not take it as conclusive evidence due to the witness association with the case. The testimony cannot be discarded but caution shall be there as a related person can be an interested person.

Seema Alias Veeranam v. State by Inspector of Police

This case states that a court shall not deny the testimony of a related person only on the grounds of the witness being a related person. It is the duty of the court to carefully examine and scrutinise the evidence.

Sardul Singh v. State of Haryana 

This case states that the evidence by an interested person needs to be scrutinised even more. It cannot be discarded on it being produced by an interested person. The truth needs to be found out by the court.

Cases where the witnesses are compelled to produce a document

Communications between husband and wife

Section 122 of the Act states that no person who is or has been married, shall be compelled to disclose any communication made to him during marriage by any person to whom he is or has been married. A wife cannot be compelled to make the communications made to her in a court. However, the spouse can depose off the communication if the other spouse gives the consent for doing so. The consent given should be expressed. Consent in such cases cannot be implied.

Communications made to public officer

Section 124 of the Act states that no public officer shall be compelled to disclose communications made to him in official confidence, when he considers that the public interests would suffer by the disclosure. The documents which are prepared by the official following the procedure of law shall be accepted as evidence in a court of law. The official needs to decide about the disclosure not going against public interest and produce it accordingly.

Information is given to Magistrate in case of commission of offense

Section 125 of the Evidence Act provides for information as to commission of offences. No Magistrate or Police officer shall be compelled to say whence he got any information as to the commission of any offence, and no Revenue officer shall be compelled to say whence he got any information as to the commission of any offence against the public revenue. 

The police officer is under no obligation to reveal the sources of information and how the information was collected regarding the commission of an offence.

Communication made to legal Advisors

Section 129 of the Evidence Act states that no person can be compelled to reveal their communication details with the legal advisor unless it decides to be a witness in which case the court can ask the person for the communication details to explain any evidence in the court of law.

When the witness is not a party to a suit, he can be compelled to produce title deeds

Section 130 of the Evidence Act states that no person can be compelled to produce any documents as to the title deeds to any property or any such document that might criminalize him, unless he has written to the production of such documents with the person seeking production. 

Cases where the witnesses cannot be permitted to make a particular statement

Communications between husband and wife

Communications between husband and wife are categorised under privileged communication that shall remain confidential among the two and cannot be asked to reveal in a court. This doctrine is envisaged under section 122 of the Evidence Act. The communication even if relevant to the case cannot be used as an evidence with the implication of the doctrine of privileged communication. The spouses are provided with this privacy as to maintain the social principles prevalent in society. 

Evidence when the affairs of the State are concerned

This immunity is included in the Section 123 of the Evidence Act to protect the interest of the state affairs. The unpublished official records regarding the state affairs cannot be compelled to be produced as evidence by any person unless the permission to present such records has been procured from the officer at the head of the department concerned.

Attorney-Client Privilege

Section 126 of the Evidence Act restricts the legal advisor from disclosing any communication, documents or anything else with his client. The provision only states about any person in the capacity of legal advisor barred from sharing confidential details. This privilege is applicable to all the communications, either documentary or oral. 

Section 127 of the Evidence Act extends the ambit of section 126 by including all other people employed by the legal advisors into the restrictions mentioned in the previous section. 

Section 128 acts as the waiver for the client to avoid providing any information unless it is its own will to produce such information, calling the counsel as a witness. 

Number of witnesses required by the court in any case

Section 134 of the Indian Evidence Act states that no particular number of witnesses are required for the proof of any fact. 

The State of M.P. v. Chhagan 

This case states that the section 134 of IEA clearly mandates that “in any case no particular number of witnesses is required for the proof of any fact of the case. 

The court is not concerned with the number of the witnesses in a case but with the quality of those witnesses. If the court is satisfied with the testimony of either one of the witnesses, the other numerous witnesses contending similar testimony would be immaterial to the case.

Corroboration of Testimony of Sole Witness

Section 134 of the Indian Evidence Act exclusively does not provide for any particular minimum number of required witnesses in a case, hence, testimony of sole witness in a case is credible if it is enough to prove the case beyond reasonable doubt.

Shivaji Sahebrao Bobade & Anr vs State Of Maharashtra 

This case states that even if the case against the accused hangs on the evidence of a single eye-witness it may be enough to sustain the conviction given sterling testimony of a competent, honest man, although as a rule of prudence courts call for corroboration. It is a platitude to say that witnesses have to be weighed and not counted since quality matters more than quantity in human affairs.

Shanker v. State

The Rajasthan High Court laid down the observation regarding corroboration of evidence of single witness held as under: 

(1) As per a general rule, there is no fixed number of witnesses required for any particular case; a court can act on the testimony of a number of other witnesses of indifferent character. 

(2) Unless corroboration is insisted upon by Statute, in the exceptional cases where the nature of testimony of a single witness itself requires corroboration which courts should insist upon, for example in the case of testimony of a child whose evidence is that of related character or an accomplice. 

(3) The requirement of the corroboration of the testimony of a single witness is dependent on the facts and circumstances of each case and there is no general rule which can be laid down on this matter like this and it also depends on the discretion of the Judge who deals with the case. 

Rights that witnesses have

Witness Protection Scheme, 2018

Witness Protection Scheme, 2018 provides for protection of witnesses based on the threat assessment and protection measures inter alia include protection/change of identity of witnesses, their relocation, installation of security devices at the residence of witnesses, usage of specially designed Court rooms, etc.

The Scheme provides for three categories of witness as per threat perception:

Category ‘A’: Where the threat extends to life of witness or his family members, during investigation/trial or thereafter.

Category ‘B’: Where the threat extends to safety, reputation or property of the witness or his family members, during the investigation/trial or thereafter.

Category ‘C’: Where the threat is moderate and extends to harassment or intimidation of the witness or his family member’s, reputation or property, during the investigation/trial or thereafter.

Need for witness protection scheme

The witness protection scheme is necessary to encourage the witnesses to produce testimony in the court without the fear of being killed or tortured while helping the court in deciding the case.

Importance of Witness

A witness is the one with the first hand information of the crime committed and plays a huge role in the investigation process as well revealing the truth behind the circumstances that led to the crime. They help the court by clarifying what happened at the crime scene and all other details they know of the crime, all of which is relevant to the case and assist the judge in deciding criminal matters.

Threats to the Witnesses

There are certain types of threats associated with witnesses:

1. Forcing the witness to testify false information, or not testify at all. 
2. Offering bribe to a witness in monetary or non monetary terms.
3. Threatening a witness with physical harm or personal property damage.
4. Threatening to kill or harm the family members of the witness.
5. Making arrangements to prevent a witness from reaching the court for proceedings.

All these probable threats pose an issue with the witnesses not ready to testify in a court, thus, provisions to protect these witnesses from any harm whatsoever are to be formulated.

Incidents involving a threat to witnesses 

Vyapam Scam

A medical entrance examination scam was unearthed in Madhya Pradesh in 2013 where 13 entrance exams were conducted for admission to various professional courses. The candidates who applied for the examinations were replaced by meritorious medical students or medical practitioners impersonating as candidates in exchange of monetary benefits. 

The investigating officers that were involved in the case along with the whistleblowers on whose information the investigation was carried out received threats from those involved in the scam. Around 23 whistleblowers while getting details of the scam. These whistleblowers are secret detectives of police authorities that are entrusted with providing details of any illegal activity being carried out in their local area. In this case, these whistleblowers would have been presented in court as witnesses but they were killed before anything could be testified in court.

Asaram Bapu Case

Self styled godman, Asaram Bapu resided in his ashram as a devotee to god and messenger of divine powers on Earth. He was accused of several rape charges by the women who visited him for prayers but were instead forced into submission by him for sexual favours. The witnesses in the case involved all the women who were raped by him. These witnesses received threats by his men along with his followers. The investigating officers were also threatened to stop the investigation or would be subjected to dire consequences.

Conclusion

A criminal case requires testament of the witnesses who have the first hand information of the crime to fill the void of the investigation process and ease the task of the judiciary in dispensing justice. The Indian Evidence Act provides provisions as to who can be a witness and what could be the admissibility of testaments of all sorts of witnesses. The quality of witness is kept over the quantity and need for a certain witness protection scheme has been identified considering the importance of the witnesses and the threats they are subjected to.

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This article is written by Shubhang Gupta, pursuing a Diploma in Cyber Law, Fintech Regulations and Technology Contracts from Lawsikho.com. Here he discusses “How to take legal actions against websites like Facebook, Twitter, Google etc. for breach of your privacy”.

Introduction

These days“Privacy” of our data has become a topic for discussion all over the globe. Have you ever wondered which “Privacy” has been discussed here? Is it your bedroom or home privacy? No, it’s your digital privacy which relates to your data available over the internet. With the advent of social media in our life, which provides easy accessibility to all our personal information like- name, location, contact number etc. are always prone to unauthorized access by a third party. We will look in detail about the whole concept of privacy and other related topics. With this discussion, it is also important for us to understand the term “Intermediary”. The term “Intermediary” has been defined under section 2(w) of the Information Technology Act, 2000.

What is privacy?

As such the term “Privacy” hasn’t directly mentioned under the Indian law, However, the Supreme Court backed the “Right to Privacy” in the case of Justice K.S. Puttaswamy v. Union of India, where the Hon’ble Supreme court holds that the right to privacy is protected as a fundamental constitutional right under Articles 14, 19 and 21 of the Constitution of India.

The whole concept of privacy under the Indian law has two aspects which are a.) Personal Information and b.) Sensitive Personal Information. As per the provisions of the Information Technology (Reasonable Security and Procedures and Sensitive Personal Data) Rules, 2011 it defines both term which are as, “Personal Information” which means any information that relates to a natural person, which, either directly or indirectly, in combination with other information available or likely to be available with a body corporate, is capable of identifying such person whereas, Sensitive personal data or information— Sensitive personal data or information of a person means such personal information which consists of information relating to;—

• password;
• Financial information such as Bank account or credit card or debit card or other payment instrument details;
• physical, physiological and mental health condition;
• sexual orientation;
• medical records and history;
• Biometric information;
• any detail relating to the above clauses as provided to body corporate for providing service; and
• Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise.

To cope up with the modern aspect of privacy of a person, the proposed Personal Data Protection  Bill, 2019 increases the scope of the definition of personal data. it defines the personal data as, “personal data” means data about or relating to a natural person who is directly or indirectly identifiable, having regard to any characteristic, trait, attribute or any other feature of the identity of such natural person, whether online or offline, or any combination of such features with any other information, and shall include any inference drawn from such data for the purpose of profiling.

Which provisions under the Indian law relate to the privacy?

In India, following provisions of the Indian law relates to the privacy of a person, which is as follows:

• Information Technology Act, 2000

The Act was passed way back in 2000 till date only a few amendments were made in the act related to the protection of privacy of the citizens. Section 43A of the act, which deals with compensation for failure to protect data, had provided a limited scope of protection of privacy of the citizen’s data. The act has no other provision for the protection of privacy.

• Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011.  

These rules were made by the Government of India by exercising the powers conferred upon it by clause (ob) of subsection (2) of section 87 read with section 43A of the Information Technology, 2000. In this regulation provisions such as clause (i) of subsection 1 of section 2 and section 3 talks about the privacy of a person. This is the only regulation which sets out the definition of privacy under the Indian law. As this is only a piece of law which deals with the citizen’s privacy, but it’s not exhaustive in nature. The regulation has failed to punish the offenders, committing the breach of privacy, where privacy has increased its ambit.

How privacy can be breached on platforms such as Facebook, Google etc.?

Breaching your privacy means Intrusion into a person’s private space, own affairs, or wish for solitude. In the current scenario, where a great number of people all over the globe, have a parallel virtual identity with their own physical identity, makes the discussion on privacy more necessary. Hacking is the most common way of breaching the privacy of a person. For an example: – a Facebook active user’s profile can be a source for many private data, which may range from a person’s political opinions, location etc to his contact number, private picture or videos etc.  If, in any case, a third party has access over such data or a hacker hacks someone’s ID and further uses it, then it becomes a matter of concern to protect such information from the third party.

Recently In 2018, the attackers exploited a feature in Facebook’s code to gain access to 50 Million user accounts and potentially take control of them. This kind of incident has increased the concern of many countries regarding their citizen’s data.  

What are the remedies available against these websites?

In India, if a person’s privacy is breached by another party on the websites like: Facebook, Google etc then, possibly the aggrieved person has 2 options, a.) take legal actions available under the Indian law b.) Report to the concerned intermediary.

Legal actions are available under Indian law

Under the Indian law, an aggrieved person has the right to bring an action against the third party.

1. As per the Section 72A of the Information Technology Act, 2000 it deals with punishment for disclosure of information in breach of lawful contract. This section provides that

“any person including an intermediary who, while providing services under the terms of a lawful contract, has secured access to any material containing personal information about another person, with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain discloses, without the consent of the person concerned, or in breach of a lawful contract, such material to any other person, shall be punished with imprisonment for a term which may extend to three years, or with fine which may extend to five lakh rupees, or with both.”

This section is applicable only in the situation where any person or an intermediary himself has access to the data of their clients without the consent of the concerned person.

2. As per section 3(2)(a) of the Information Technology (Intermediary Guidelines) Rules, 2011, it states that

“(2) Such rules and regulations, terms and conditions or user agreement shall inform the users of computer resource not to host, display, upload, modify, publish, transmit, update or share any information that — (a) belongs to another person and to which the user does not have any right to.”

By incorporating this provision of law, the act puts a duty on an intermediary to inform the users of computer resource not to share any information which belongs to another person and to which the user of computer resource doesn’t have any right to such information. If in any case, an intermediary has failed to inform users of computer resource about such restriction, then the onus of liability may be shifted on such an intermediary. An aggrieved person may also make an intermediary as a party to the legal action for breaching his privacy.

3. An aggrieved person may also bring legal action against an intermediary under section 405 of the Indian Penal Code, 1860 which deals with the Criminal breach of trust. It states that

“Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits “criminal breach of trust”

An intermediary is always bounded by the trust of their user to protect their privacy. Whenever a user shares his personal information or sensitive information with an intermediary, impliedly, it puts a responsibility upon such intermediary to protect their data from unauthorized access. Clearly, a user and an intermediary shares a fiduciary relationship between them, any willful violation committed by an intermediary may lead to criminal breach of trust. Hence, an aggrieved person can bring an action against such intermediary.  

Report to the concerned intermediary

With the huge increase in the number of cases related to breaching of privacy, the websites like Facebook, Google etc. now, provide their own mechanism to report such incidents to the intermediary directly.  

• Google

Google has its own mechanism to report a vulnerability in its product and service. By opening Google select about, and then select application security. After a window opens then select reporting security issues, Then select “I have a privacy doubt or a privacy-related question about Google products and services” from the list.

• Facebook

Facebook also offers a mechanism to report a privacy violation. Select the help centre from Facebook’s home page. Then select a contact from the available options. A new window will open then select report a privacy violation. Here you can report about the kind of violation like, image, video and other etc.

Under which regulation, the intermediaries are obliged to safeguard your privacy

The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 enumerates the provisions related to the privacy of data that should be maintained by an intermediary under the act. The act also set out the definition of some important terms like personal information and sensitive personal information under Indian law. This regulation puts responsibility on body corporate to provide a policy for privacy and disclosure of information. This regulation also provides a mechanism for the collection of information from the users. It puts the burden upon an intermediary to implement reasonable practices and procedures to protect the privacy of the users. It also contains the mechanism for disclosing of information to any third party.

Conclusion

It is apparent that with the development of new complex technologies and resources for committing an offence over the internet, the Information Technology Act, 2000 has proved its incapacity to prosecute and put the criminals behind the bar. The act didn’t contain any provision which is directly or expressly related to the privacy of a user but also failed to provide rigorous punishment to the criminals.

References

• Section 2 (1) (i) of the Information Technology (Reasonable Security and Procedures and Sensitive Personal Data) Rules, 2011
• Section 3 of the Information Technology (Reasonable Security and Procedures and Sensitive Personal Data) Rules, 2011
• Section 3(28) of the personal data protection bill, 2019
• Section 72A of the Information Technology Act, 2000
• section 3(2)(a) of the Information Technology (Intermediary Guidelines) Rules, 2011
• Section 405 of the Indian Penal Code, 1860

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 Rohit Raj, a student of Lloyd law college, Greater Noida.

Introduction 

Sentencing Disparity is a form of unequal treatment in providing Criminal Punishment which is totally unfair and disadvantageous in consequences. It simply means doing unfair and unequal treatment with all the criminals and the punishment is given not according to their crime. It is given just by doing sentencing disparity which is totally illegal as law says– All are equal before the law, no one is above the law. 

Disparity is a difference in treatment or outcome that does not result from intentional bias or prejudice. Applied to the sentencing process, disparities exist when similar offenders get different punishments and different offenders get the same punishment. It shows in both the condition and it prevails in our society and as this type of practice is going in our system and we are proud of this type of social evil practice. 

Background 

In the case of the criminal justice system, it allows policemen, prosecutors,  judges and parole leads to a greater amount of discretion on their parts in providing justice and this liberty to them in the criminal justice system leads to the disparity in the Criminal punishment or sentencing. A 2001 University of Georgia study found substantial disparity in criminal sentencing men and women. The study found that in US federal courts, blacks and males are less likely to get no prison term. 

Also in 2012 Sonja B. Starr from University of Michigan Law School found that men receive 63% longer sentences on average than women do and it is also based on data from US federal court cases. It is also proved at the global level that sentencing disparity is widespread. 

Different aspects of Criminal Justice System

If we look at what the literature thinks about the disparity of sentence policy, it is quite interesting according to the literature. The studies that have been conducted during the past twenty years are particularly noteworthy for two, interconnected reasons. First, these studies are more methodologically sophisticated than the study of the criminal justice system that preceded them. Second, contemporary studies reject the assumption of the sentencing process universally affected by the racial biases and that the black and Latino defendant will always be disadvantaged as compared to white. The recent literature review after a deep study and research that the effect of race on sentencing differentiating between Capital and Non-Capital Punishment cases. 

A studies found that death-penalty cases have generally:

• In the vast majority of cases, if the murder victim is white, the defendant is more likely to receive a death sentence. 
• In a few jurisdictions, notably the federal system. Minority defendants are more likely to get the death sentence. 

Reducing Racial Disparity in the criminal justice system is critical in order to produce fairness in justice and to uphold the ideals upon which the system is premised. Decades of research have demonstrated that race has always played a role in sentencing outcomes which leads to the origin or rise of the disparity of sentencing policy in the criminal justice system.

Problem in Effective Dealing with Disparity in Criminal Justice System

The problem of this study is the rise of the Disparity of Sentencing policy in the criminal Justice system although there is inclusion of Article 14 which states that Right to Equality and also mentioned in the constitution that No one is above the law. As this is considered as the main root of the problem but also like– Individuals killed by the Police is the rising problems which comes in front of us in some previous year and also killing of people by the police are not the high status people, all are the minority and backward people who are not much more aware about their rights and who have no social position. 

National Surveys conducted by the U.S. Department of Justice found that while African American may be subject to traffic stops by police at similar rates to whites, they are three times as likely to be searched after being stopped.

This qualitative study will examine the level and intensity of the disparity in sentencing policy in the criminal justice system at a global level. 

If we look for the Hypothesis of this given topic, firstly a question arises that why this disparity emerges in the sentencing policy in the Criminal Justice System? The incidence of disparity in sentencing policy between black and white people is at a larger extent. For example- ACLU found that blacks were 3.7 times more likely to be arrested for marijuana possession than whites in 2010, even though their rate of marijuana usage was comparable. There are many organizations that advocate to reform and reduce the disparity in the criminal justice system such as:

• ACLU Penal Reform International 
• Sentencing Project
• Brennan Centre for Justice 
• Cut 50
• Innocence Project

Factors Contributing to Emergence of Disparity in Sentencing Policy 

Many factors which contribute to the emergence of the disparity in sentencing policy in the Criminal Justice System. Some of the factors were mentioned below to support or to explain one of the objective of this research:

• States with the larger Black populations is a significant driver of this harsh practice of disparity in the sentencing policy. 
• Practice of Death penalty, treatment of Juveniles, and prison condition all these practices has resulted in large racial disparities in the jails and prison. If we take into consideration about the treatment of Juveniles then according to me it is totally to treat those minor who has done severe crime like- rape, murder. As, if they know the consequences of the act and also know it is an immoral act then they have no right to be treated in the Juvenile Act. 
• States that spend more on welfare may choose to direct fewer resources towards maintaining criminal justice, they are less focused on whether the justice delivered in the criminal system is following the principle of equality or not. 

Data Analysis at the Global Level 

The Global scenario of the Disparity in sentencing policy in the Criminal Justice System is now changing the mindset of the people and it is slowly becoming a threat for the whole nation around the world. Practice of juvenile system, practice of death penalty and also the law favouring a Particular communities creating disparity in sentencing policy which brings cruelty in the minds of the accused towards the society and the government which is in itself a wide-reaching threat. 

With the evolution and emergence of the Sentencing Disparity, sentencing disparity also emerges into various branches or we can say it in various forms like- Inter jurisdictional,  Intra jurisdictional and Intra judge. Now taking into consideration the first form, In this judges in different jurisdictions sentence similarly situated offenders differently. Moving to the further forms, In the second one,  judges in the same jurisdiction sentence similarly situated offenders differently and in the third one, an individual judge makes inconsistent sentencing decisions. And all these forms create a lot of chaos in the criminal justice system and finally leads to the disparity in the sentencing policy. 

The source of such disparities is deeper and more systematic than explicit racial discrimination. The U.S. operates two different criminal justice systems: one for wealthy people and one for the poor people and the people of color. The rhetoric of the criminal justice system sends the message that our society protects everyone’s constitutional rights, but in practice the rules assures that law enforcement prerogatives will generally prevail over rights of the minorities and the poor. 

Quantitative Data Analysis 

In order to do analysis of the above research and the objectives and the linked problem, Quantitative method of analysis is being used for better analysis of this emerging problem i.e. Disparity of sentencing policy in the criminal justice system. 

• In the latest year, the largest fall in the volume of prosecutions and convictions for indictable offences was seen in the Asian group, down by 22% and 20% respectively. Prosecution and convictions fell by 18% and 16% for black defendants and 13% each for white defendants.
• Asian and Chinese or other offenders had the highest custody rate for in 2018 at 37% each, compared to 33% for white offenders. 
• The Proportion of stop and searches conducted on White suspects decreased from 75% in 2014 to 59% in 2018-19 and increased for all the minority ethnic groups. 

These all three Quantitative Data analyses clearly show the disparity between the different communities of offenders and prosecuted people in sentencing policy in the criminal justice system. 

Discussion of aspects with Critical comments 

As above discussed the sentencing disparity that is a form of unequal treatment in criminal punishment that is often of unexplained cause, unfair and disadvantageous in consequence. In this Doctrinal research, Disparity is shown by linking with the race and ethnic in the criminal justice system and shows racial biases with the help of example at a global level. Racial biases mostly spread and the country which is affected by this biasness is the United States and this analysis on the part of the author is a good attempt. In the Doctrinal research, also inculcate different forms of the disparity on the level of the judgment given by the Judges i.e. Inter Jurisdictional,  Intra Jurisdictional and Intra Judge.

Afterward, a major discussion is being placed in front of all that as all are talking about the Disparity in sentencing policy in the criminal justice system but what are the reasons behind its emergence at a global level. Reason which were cited for the emergence of this problem at a global level is due to some practices like- Juveniles Act,  Death Sentence and the U.S. Sentencing policy which has two aspects i.e. one criminal system for the richer section and one for the minorities and the poor people. Government is not spending a lot of its amount on reforms in the criminal justice system and neither on the proper implementation of laws which regulate the criminal justice system and due to which it lacks behind in creating an equitable sentencing policy in the criminal justice system. 

In the data analysis, a quantitative method is being used to show the disparity on the basis of race, ethnic by using the quantitative data at global level. A very important point which is mentioned above and it is true and it’s a practicality i.e. the rhetoric of the criminal justice system sends the message that our society protects everyone’s constitutional rights, but in practice the rules assures that law enforcement prerogatives will generally prevail over rights of the minorities and the poor. 

Conclusion

With the increasing disparity in the sentencing policy in the Criminal Justice system the mindset of the offenders and the persecuted peoples deteriorate and it leaves a deep scar on the society and it is not the problem of any one country but it is the global level problem. And if national and international governments and agencies will not do a deep research on it and involve in reforming the existing policy, then nothing will be changed even after passes of a long time. Practices which are vague but still continuing is also a major reason for this issue which continuously creates hurdles in the sentencing policy in the criminal Justice system. 

Some of the recommendations as a researcher I want to suggest are: 

• National and International governments and agencies should spend more money on researching and involve more in the reformation in the existing vague policies.
• Government should as soon as possible ban and stop the practices of some of the wrong practices like- Juveniles Act, Death Penalty.
• The U.S. should stop its two sided sentencing policy i.e. one for wealthy people and one for the poor people and the people of color. 

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

So India is finally under total lockdown in an attempt to slow down the spread of coronavirus. 

While there is some news of a few covidiots stepping out, mostly the message has spread that one must not step out except for something super urgent. The government has also shut down everything from shops and malls to universities and courts. 

What is next?

We have heard that the lockdown will continue at least till 15th April, after which the government will decide what to do. 

However, if you are expecting that coronavirus will vanish by then, or that lockdowns will be so easy to lift, then you are terribly mistaken. 

Experts say that social isolation only slows down the spread of the virus, but cannot completely stop it. The virus could, for example, infect you from the vegetables or the milk carton you bring home, things you get delivered from Amazon, and even from the cooked food you order from outside. 

Most people who are infected do not experience any symptoms though. So people would be silently spreading the virus in every community.

The social isolation helps a great deal, but only in terms of slowing down the velocity of new cases. We will not be able to eradicate or stop coronavirus in this way.

Vaccines are likely to be available, according to the French president Emanuel Macron, by the end of 2021. There are other people claiming that a vaccine is around the corner, but most of those people are non-experts and politicians. 

I am yet to come across an expert who says we can see a vaccine in the market for coronavirus before at least 12 more months. 

So that is the next question. 

If social isolation and lockdowns will not stop coronavirus, then what is the other option? How long can we afford to keep people away from work, economy at a standstill, and earnings of most Indians at zero?

China had to begin to lift lockdown measures from the middle of March, after 6 weeks of lockdown across China, and 10 weeks in Wuhan where coronavirus started spreading from. 

The Chinese government knows very well that once more coronavirus will begin to spread like wildfire, and will kill 2-5% of the population in all probability. Still, they do not have a choice anymore. 

After a few weeks of lockdown, a very prosperous country is already in a very precarious economic situation. How will it continue to pay government workers, keep essential services and hospitals running, and the population fed if nobody goes to work for months?

European countries are facing the same choice now. While they have all opted for lockdown in order to buy time at this point, it is becoming increasingly clear that there is no option but to lift the lockdown in a matter of a few weeks or a few months. No country can afford to keep the entire population under lockdown for 12 months or more until a vaccine is found. 

Even if there is any confirmed information of a working vaccine coming in 6 months, can India afford to keep the country under lockdown for that long? That does not look likely for economic reasons.

If the country is kept shut down for months, more people may die due to lack of food, basic health necessities such as sanitation and routine treatments even if not from coronavirus. The government will begin to run out of funds if economic activities are not carried out, and GST is consequently not paid. How will the government ensure treatment for even the coronavirus or other patients? How many months till it runs out of money and can’t pay salary to the government employees?

The economic ruin will be complete and devastating if the lockdown continues. The majority of the population will be pauperized.  Even the rich with enough emergency savings will not be spared if there is a lockdown that lasts more than a few weeks. And the government’s finance will go haywire completely, too. 

And that is why, I do not believe that India can afford to impose a lockdown that goes anywhere beyond 6 weeks, and we will have to embrace the fact that coronavirus will infect, hospitalize and kill a very large number of people in India. There is nothing we can do to stop that, but we may still be able to salvage our economy. 

Experts have predicted a mortality rate between 2-6%, depending on how aged a population is. Given that the Indian population is relatively young, we can hope to keep mortality rates around 2%, which would still mean we could see death tolls over a crore in India, and that a few crores will be very sick. Many will probably die without treatment.

And it appears that there is precisely little that the government can do to stop this now, apart from setting up lots of temporary hospitals and quarantine centres. 

If not lockdown then what?

One option is that a majority of the people would have already been infected and cured by their own immunity. 

When the government will be able to do antibody testing, they may find out if someone already had coronavirus and has recovered since. If they already have built up the antibody of the same in their blood, they can’t be infected again. 

At that point, the logic of lockdown will cease to exist.

The other solution is to end lockdown fully recognizing the human cost of death and sickness, and preventing bigger harm, namely the economy sinking completely and the country descending into complete chaos due to lack of funds.

What else is likely to happen?

Social isolation will continue

British and German government expects that Coronavirus will continue to spread throughout 2020, and keep the government and hospitals busy till March – April of 2021. By then they expect 70-80% of their population to be affected too. 

Remember that most of those who got infected will continue to be productive. The vast majority will not even be detected. 

Naturally, most people who can afford it will continue to socially isolate themselves during this period as far as possible. Even if they already had contracted corona since and recovered, they may not even realize, and continue to practice social isolation out of precaution. 

So prepare for a world in which a lot of people will work from home, most meetings will be online rather than physical even if people are in the same city, and travel will be impacted big time. 

Big events cannot be planned and expected any time soon. 

We will talk more about how this will play out and specific repercussions on the legal profession in a bit. 

Economic uncertainty

Government policy is likely to flip flop and due to all the uncertainty volatility in the stock market will continue. The investment environment will be severely hampered as investors will try to play safe and hold cash. Consumer confidence and purchasing power will hit an all-time low. Tax collections will drop.

A global economic recession seems to be in the offing. It would probably take a year or two before the major economies recover from this. 

Massive investment in healthcare

We can expect very big scale investments in healthcare by both government and private parties as a repercussion to this global catastrophe. The lesson from the corona outbreak tells us that there may be more such outbreaks in the future.

And we need to prepare our countries for such things happening again in the near future, apart from increasing spend to handle the current disaster itself. 

It turns out at the time of writing that there is another virus in the offing already in China called the hantavirus. We wonder how many more such viral outbreaks will come through in years to come, and given the massive economic cost, governments will be forced to invest in massive disease response infrastructure and private parties will find it profitable to invest as well.

Investment in supply chain and manufacturing in India and South Asia

For a very long China has enjoyed the status of the manufacturer for the entire world. Major multinationals lined up to set up their entire supply chains in China due to favourable policies and business environments.

However, as coronavirus has demonstrated, putting all your eggs in the same basket is way too dangerous.

Let’s take giants like Apple or Samsung for example. Their business continuity has been completely disrupted by coronavirus menace. Their supply chains today stand devastated. 

Going forward, these corporations will mitigate their risk and China dependency by setting up new manufacturing hubs in other countries that have favourable climate and market. India appears to be set to attract some of this investment in years to come, especially given that the economy is likely to sink deep, forcing the government into action in terms of reforms and creating favourable policies to attract foreign investment.

Click Above 

Coronavirus disaster could be another turning point in India’s economic history just like 1990’s reforms and globalization of the Indian economy. 

As we have seen in India earlier, excruciating and unbearable situations often end policy paralysis here, leading to major reforms, which end up unlocking a massive untapped potential for growth. 

Speed up digital transformation and e-commerce

This has already begun. Many businesses resisted digital transformation, trying to operate without technology, or with less technology. Now, companies are being forced to adopt online productivity management and employee tracking systems, task management software, online meeting software, cloud telephony systems, digital payment systems, online customer service software, OKR software, and whatnot. 

The disruption will be even more pronounced in government, educational institutes, small businesses which had some insulation from digital transformation till now. 

Naturally, SaaS companies and software developers are likely to see a boom in work in months to come. 

E-commerce companies and online delivery businesses are likely to do very well as well, as people would be forced to order online rather than stepping out. A lot of brick and mortar businesses are likely to go out of business in months to come, and e-commerce and online businesses will gain further market share as a lot more people in India will learn to and get used to ordering things online. 

As cash represents a great risk of spreading the virus, do not be surprised if digital payment takes off in a massive way, and the vast majority of transactions move from cash to digital money. 

Education will go online

Schools have been shut down. Universities were forced to move online. Many universities had to move to just pass-fail systems instead of giving grades to students. 

The coming year will put the traditional education system on a stress test. The new generation will begin to question why they need to spend tons of money and go to these universities and take on debt if all they are going to get are online classes! Employers may change their minds too about the usefulness of university degrees. 

Online upskilling platforms are likely to do very well because a huge number of people will need new skills to adjust to the new world and cater to the burgeoning industry with new skills that are not taught in the universities. 

After all upskilling platforms charge a lot less than universities and usually deliver far more return on investment. The forced lockdowns are likely to turn a lot of people to online education platforms as they will have more time to spend on self-development and learning new skills. 

As schools and colleges remain shut down, students will spend more time on the internet and consuming entertainment. Some of them may even turn to online learning. 

Office work and courts will become virtual

Courts cannot be shut down for long periods, so despite their great apprehensions, judges will be forced to work from home and allow lawyers to do the same, and allow virtual courts. As lockdown persists, they will be forced to adapt to technology. 

Filing of papers, documents, appearance of witnesses and everything else will shift online, creating eventual efficiency and speeding up the court system.   

Many government officials to date make it mandatory for people to come to their office in person. These practices are going to end because the officials will be scared to meet people and push for digital meetings. Again, this is likely to result in greater efficiency, less corruption and many conveniences for individuals and businesses in the future. 

Digital media will gain users but lose advertisers

Subscription-based media companies like Netflix will do very well, but those which depend on advertising will face a hard time. Digital media consumption, nonetheless, will go up big time as people isolate themselves at home. 

We may see a drastic drop in physical newspaper subscriptions. The events industry will virtually shut down. Hospitality and in-person entertainment will be in tatters as well until people feel safe again from coronavirus.

When is the economy likely to bounce back?

We could expect a turn around in economic activity within 6 months to 1 year. There are enough triggers already in place for investment and economic growth. 

India’s fundamentals are strong. With the government pushed to the brink to introduce reforms and the private sector forced to turn more efficient and lean, and the weak businesses with outdated or weak business models out of business, we can expect very good growth a year or two down the line. 

The message is clear – first, survive. If you are confident of survival, invest in growth. Because your competitors will probably be too overwhelmed to invest in growth and systems in the current environment, and many will go out of business making the market open and available to you if you can innovate, and evolve. 

These are good times to invest in brand, fundamentals, cutting flab and allocating money where it matters. 

How can lawyers make the best of the time ahead?

Tomorrow I will write in detail about the disruptions I expect in the legal industry specifically. Today’s general background was important to set the context for that. 

Lawyers should use this time to do the following:

1. Deepen your relationship with your existing clients. Call them up, ask how they are doing, if they are safe and if they need any free advice regarding how to deal with repercussions of corona such as delayed payments and breached contracts, help them out. 
2. Build your brand, deepen your expertise in some area of law, read more, take this time to get physically fit, maybe take up an online course from lawsikho.com or at least attend some free webinars. You can get notifications for free webinars in this WhatsApp group. 
3. Build your online presence. You can offer some free webinars to your clients. Tweet more, post more valuable insights on LinkedIn. Add potential clients on your social media profile, comment on and engage with their posts. It always helps to build a relationship, and even online relationships can be powerful if you thought otherwise. Request people for online meetings if you want to pitch to them, it is a great time because many of them have less work.
4. Seek out a mentor. It will be easier now than ever.
5. Take some time to think through your plans. You have time to pause and ponder now. How are you going to grow your practice or get the next big promotion? What can you add to the mix in order to grow faster than ever when this storm is over? Do you have an ace up your sleeve? What is it and how are you going to use it?
6. This is not the time for despair, insecurity or laziness. It is time for action because those who take actions in these unusual times will reap rich dividends later. Don’t let this opportunity slip out of your hand, because this is truly a once in a lifetime opportunity.

We have some courses which can really help you in the corona-stricken times and terrible economy because those with these practical skills that we teach will see a very high demand for their skills while many low-skilled and unskilled people will quickly lose their jobs.

Become a high-performing lawyer. Check these out and try out any one of them with a 30 days full money-back guarantee:

Stay safe and keep others safe.

P. S. Confused about where your career is heading? Want to talk to a career counselling expert who can answer your questions and guide you to take your career to the next level? Give us a call at +91 11 4084 5203 and we will get back to you ASAP.

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