This article is written by Sneha Mahawar from Ramaiah Institute of Legal Studies. The article discusses the concept of Section 138 – 142 of the Negotiable Instruments Act, 1881. 

Introduction

The term “Negotiable Instrument” is defined in Section 13 of the Negotiable Instruments Act, 1881. The word “negotiable” has derived from the old french word “negociación” which means dealing with people, trafficking, trade, business. The word “instrument” has derived from the old french word “instrumentum” which means equipment or implement. Negotiable Instrument is a legal document, such as a cheque or a bill of exchange, that is freely negotiable. Negotiable Instruments Act, 1881 consists of 17 chapters and 142 Sections. 

The main purpose of Sections 138 – 142 of the Negotiable Instruments Act, 1881 is to promote or raise to importance the ability to produce the desired effect under ideal testing conditions of the banking operations. These sections also aim to ensure the credibility in transacting the business through cheques and other negotiable instruments.

Section 138 of the Negotiable Instruments Act, 1881 

Section 138 of the Negotiable Instruments Act, 1881 states the dishonouring of a cheque for reasons stated insufficiency of funds, stale cheque, post-dated cheque, alteration, irregular signature, frozen account and stop payment instruction, etc. 

When any cheque is drawn by an individual person on a particular bank account which is maintained by him with a banker for the payment of any certain amount of money to another person out of that bank account for the discharge, in whole or in part, of any amount of debt or any other liability which is returned by the bank unpaid either because of the reason of the amount of money standing in the credit of that bank account is insufficient to honour or if it exceeds the amount of money arranged to be paid from that bank account by an agreement made with the bank. 

Hence, such an individual or person shall be deemed to have committed an offence and shall without prejudice to any other stated provisions of the Act, shall be punished with a maximum of imprisonment for up to one year or with a fine which may be extended to twice the amount mentioned in the cheque, or both.

Ingredients 

Section 138 of the Negotiable Instruments Act, 1881 contains the following ingredients-

1. The cheque has to be drawn by the accused on a bank account which is maintained by him with a particular banker in a bank;
2. The amount of money mentioned in the cheque is for discharging the liability either wholly or partially; and
3. The cheque is dishonoured which means it is returned unpaid due to insufficient funds or is returned because the amount contained in the cheque exceeds the arrangement made with the bank. The offence is said to be committed at the exact moment the cheque is returned unpaid to the holder or drawer of the cheque.

Exceptions

The exceptions to such provision are that nothing contained in the section shall apply until-

• the cheque has been presented to the respective bank within the period of its validity or within six months of time from the date on which the cheque was drawn from the bank, whichever is earlier.
• the payee (person who receives the payment) in due course of the cheque has made a demand for the payment of the amount of money by providing notice or in writing to the person who has drawn the cheque. He should within fifteen days of the receipt of information from the bank regarding the returning of the cheque which is unpaid.
• if the drawer fails to make the payment of the said amount of money to the respective payee or the person who is to receive the money within fifteen days of the receipt of information of the notice received.

Case Laws

• ICDS Ltd. v. Beena Shabeer (2002) 6 SCC 426

In this case, the terms ‘any cheque’ and ‘other liability’ is clarified. It was held that as per the provisions which are laid down in Section 138 of the Negotiable Instruments Act, 1881, if any cheque is given towards any liability which has been incurred even by a different individual but the person who draws the cheque is liable for being prosecuted in case a cheque is dishonoured.

• MSR Leathers v. S. Palaniappan (2013) 1 SCC 177

In this case, it was held that dishonour of a negotiable instrument whether based on a second or any successive presentation of a cheque for the encashment of it would be regarded as dishonour within the meaning of Section 138 of the Negotiable Instruments Act, 1881.

Section 139 of the Negotiable Instruments Act, 1881 

Section 139 of the Negotiable Instruments Act, 1881 states the presumption in favour of the holder. It talks about the liability of an individual who has issued a cheque of a certain amount of money and it has been dishonoured. 

Such a person is presumed to be guilty until and unless he proves himself innocent in the eyes of law. It is a presumption under this section that a cheque which is presented for discharging the liability may either be for partial or whole discharge of the liability of debt.

The person accused of such an offence cannot escape the liability by simply stating that it was given as security. If the presumption of liability is disproved then the burden of proof shifts from the respondent to the complainant which means that the complainant has to then prove that the cheque was issued for discharging of the liability of debt.

This presumption is also governed by the Rule of Evidence in Section 118(a) of chapter XIII. 

Case Laws

• Rangappa v. Sri Mohan

In this case, it was held that it proves to be a merit for the complainant if the accused has not replied in the statutory notice to any fact which is noted under Section 138 of the Act.

• Krishi Vikas Kendra v. Mukund

In this case, the accused paid the debt amount partly and therefore a transaction was made. The Court held that the accused or the respondent has the burden of proof and he has to prove his innocence with regard to the dishonoured cheque as per the provisions which are contained in Section 140 of the Negotiable Instruments Act, 1881.

• Dashrath Rupsingh Rathod v. State of Maharashtra (2014) 9 SCC 129

In this case, Section 140 of the Negotiable Instruments Act, 1881 clarifies that this Act will not be valid as a defence to the drawer of the cheque stating that he had no reasoning to believe that the cheque will be dishonoured when he issued the cheque.

• Basalingappa v. Mudibassapa (2019) SCC

In this case, it was held that once execution of a cheque is admitted then Section 139 of the Negotiable Instruments Act, 1881 creates a pre-decided assumption that the holder of a cheque who receives the cheque is in the discharge of liability either wholly or partly and is regarded responsible for such conduct.

Section 140 of the Negotiable Instruments Act, 1881 

Section 140 of the Negotiable Instruments Act, 1881 states the defence which may not be permitted or allowed or valid in any prosecution under Section 138 of the Negotiable Instruments Act, 1881. 

It provides that it is not a defense in the prosecution of an offence under the section 138 that the drawer of the cheque has no reason to believe that when the drawer issued the cheque, the cheque may be dishonoured on presentation of the cheque to the respective banks for the reasons which are stated in the said section.

Case Law

• Sunil Kumar v. Yog Raj

In this case, it was held that a complaint cannot be dismissed or discharged on the ground stating that it was filed before the expiry period of 30 days, as laid down under Section 140 of the Negotiable Instruments Act, 1881. 

Section 141 of the Negotiable Instruments Act, 1881 

Section 141 of the Negotiable Instruments Act, 1881 states the offences by companies. It deals with the dishonouring of cheques drawn by the company. This section extends the liability to every individual who when the offence was committed was responsible for the conduct of the business which also extends towards the key managerial positions like that of the Director.

To attract the provisions contained or mentioned in Section 141 of the Negotiable Instruments Act, 1881 the offence of Section 138 shall have been committed as the principal offence. But it is also provided that no individual or person shall be held liable if that individual is able to prove the fact that the offence was committed without his knowledge on his part and all the reasonable and necessary steps were taken by him that a prudent man would have taken to prevent the happening of the offence.

Case Laws

• Aneeta Hada v. Godfather Travels and Tours Private Limited

In this case, the Court held that the company has to be prosecuted first and then only the person responsible can be vicariously liable.

• National Small Industries Corporation v. Harmeet Singh Paintal (2010) 3 SCC 330

In this case, it was held that as per the provisions laid down in Section 141 of the Negotiable Instruments Act, 1881 the director of a company who is not in charge of the business and is not responsible for the conduct of the business of the company at the specified time shall not be held liable for a criminal offence.

• K.K. Ahuja v. V.K. Vora

In this case, The Supreme Court summarized the provisions contained in Section 141 of the act-

1. If an individual who is accused is the MD or the Joint MD of the company then there is no need of showing that that individual is responsible for the conduct of acts taking place on the behalf of a company because the word ‘managing’ is sufficient to hold that person liable. The only fact to be proved is that he is the managing director of the said company and then the person can be held responsible for the conduct.
2. The director or any other officer of the company who has signed the cheque on the company’s behalf is considered as responsible under this section. There is no need to prove that the person is responsible separately as he has signed the dishonoured cheque he is considered liable.
3. Other officers who are a part of the company can be held liable or considered responsible under the offence of dishonouring of the cheque.
4. Every person mentioned in Section 2(24) of the Companies Act, 2013 it has to be proved whether the person was involved in the conduct of the offence of the company or not.

• Standard Chartered Bank v. State of Maharashtra and others

In this case, the Supreme Court of India held that when there is a role or a reasonable part played by every person in the commission of an offence, a special process to prove their liability has to be established and this process cannot be quashed.

Section 142 of the Negotiable Instruments Act, 1881

Section 142 of the Negotiable Instruments Act, 1881 states the cognizance of offences.

It states that without regarding anything contained in the CPC, 1973-

1. It states that no Court shall take any notice of any offence which is regarded punishable under the provisions mentioned in Section 138 of the Negotiable Instruments Act, 1881  unless in a complaint which is in writing made by the holder of the cheque. 
2. It states that any such complaint which is made within 30 days of the date on which the cause of such action arises under the provisions contained in Section 138 of the Negotiable Instruments Act, 1881.
3. It further states that no Court which is inferior to the Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence which is punishable under the provisions laid down in Section 138 of the Negotiable Instruments Act, 1881.

Conclusion

Thus, the Negotiable Instruments Act, 1881 deals with all the provisions of the negotiable instruments which play an indispensable role in the modern world of commercial transactions which is due to the development and growth in the fields of banking, trading and various other commercial sectors. This Act contains liabilities, duties and rights of both the drawer and the drawee. This Act gives clarity to the businesses, trades and many other sectors.

References

• https://legodesk.com/legopedia/negotiable-instrument-act-1881/
• https://www.legallyindia.com/views/entry/vicarious-liability-of-director-of-a-company-in-an-offence-under-section-138-of-negotiable-instruments-act-1881-the-present-position
• https://legodesk.com/legopedia/section-139-ni-act/

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 Section 138-142 of the Negotiable Instruments Act, 1881 appeared first on iPleaders.

This article has been written by Pavitra Naidu, a student of Jindal Global Law School.

India and ease of doing business

India is currently ranked 77th on the ease of doing business index 2019 [1], with a low score of 67.96 and way behind many other Asian countries like Singapore (rank 2), Malaysia(rank 15), Mauritius (rank 20) and African countries like Kenya (rank 61), Chile (rank 56), Rwanda (rank 29). [2] The rankings were based on a report called Doing Business 2019 (16th ed.World Bank Flagship Group Report) which is an initiative of the World Bank to rank the countries after studying their cumulative policies and institutional assistance to businesses. It accounts for ten major factors when assessing these ranks, amongst which one that stands out is ‘Enforcing contracts’. [3] This criteria assesses the time and cost to resolve a commercial dispute and the quality of judicial processes of a country.

In the wake of such global trends, India has taken cognizance of the issue and has incorporated this vision in its latest legislations to improve the situation. One such measure includes amendments to the Code of Civil Procedure, 1908 via Commercial Courts Act, 2015. 

Commercial Courts and Forum Non Conveniens

While assessing the various reasons that pushed for such a progressive legislation, in addition to the above mentioned reason there was another pressing concern regarding Forum Non Conveniens, which refers to a court’s ability to decline to exercise its jurisdiction where another court may more conveniently hear a case. It was noticed that courts in the US and UK were not granting Forum Non Conveniens to foreign entities doing business in India, with an Indian entity from instituting suits in their courts on the underlying assumption that Indian Courts were infamously known for their extraordinary delays. Subsequently, parties were customarily submitting applications to such courts in the UK and US to institute suits there and citing reasons such as the deplorable state of Indian courts.

In Shin-ETSU Chemical Co. Ltd v. ICICI Bank (and State Bank of India) [4], a case entailing a Japanese company suing Indian Banks on basis of Letters of Credit (US having no jurisdiction) were tried in the Supreme Court of New York solely on the assumption that Indian cases relating to simple cases of Bank Guarantees or Letters of credit go on for 15 years. In another popular case Bhatnagar v. Surendra Overseas Ltd., 1995 [5] another affidavit was accepted on the ground that litigation in India continues for a quarter of a century. Lewis J commented that the “Indian Court system was in a state of virtual collapse.” In cases like European Asian Bank v. Punjab& Sind Bank [6] and Vishva Abha [7] the court in UK accepted the generalised plea that Indian courts are plagued with unwarranted delays and in effect deny justice. 

Therefore the Commercial Courts Act, 2015 was passed to combat such assumptions and to deprive foreign courts of reasons to make generalisations regarding inordinate delays in the system and leave them no scope to try cases that essentially have jurisdiction with the Indian courts.

Analysis of the Provisions of the Commercial Courts Act, 2015 and the Civil Procedure Code, 1908

The Commercial Courts Act 2015 (hereon, the Act) introduces various amendments to the Code of Civil Procedure, 1908 (hereon, the Code) that direct the proceedings in the commercial courts across the country. It is a small act with an aim of accelerating the proceedings while maintaining all the principles of natural justice. 

The Act has introduced various amendments to the provisions to streamline the process and reduce speculations. For example, section 35of Civil Procedure Code 1908 [8] which deals with compensatory costs has been substituted with the new section in the Act, that generalised the rule for payment of costs by the judgment debtor in commercial disputes cases and even though the judges are allowed to deviate, they have to list down their reasons for the same. Similarly, the procedure for discovery, disclosure and inspection of documents has been altered and it is made mandatory under the act to submit all the relevant documents along with photocopies and a list of documents they would require upon at the stage of filing the plaint/ written statement itself. In order to strictly enforce this provision and save the time of the court, parties are prohibited from relaying on any other documents not submitted before. The courts have extensive power to award exemplary costs against a party also. In implementing the act to its black letter, the judge in Mira Gehani and Ors v. Axis Bank Limited and Ors [9] held that a court cannot circumvent the spirit of the law by resorting to inherent powers of the court. They strictly upheld the rule of submission of written statements within 120 days with no extension.

Additionally, amendment to Order VI Rule 15 direct that pleadings have to be verified before they can be relied upon as evidence. They have to be attached with affidavits signed by the parties or their representatives. This compulsory verification allows the procedure to be free from any malicious allegations in the pleadings. 

The Act while consciously deviating from the general practise of prolonged and dense with content written arguments implies that it is mandatory for the written arguments submitted under Order XVIII [10] of the Code to be concise, clear and under distinct headings. The Act introduces innovative methods to improve the common proceedings by introducing a premeditated timeline for cases. Order XV-A [11] of the Code provides for Case Management Hearing which allows the judges to decide upon the dates for the proceedings of the matter. This provision has been proposed to deal with the problem of adjournments which has infested the legal system. 

Assessment of Implementation of the Commercial Courts Act, 2015

Section 17 [12] of the Act mandates all the commercial courts to collect and disclose data on the pendency of commercial courts. The Act tried to sufficiently remedy the cause of judicial inadequacy, however; the High Courts have failed to follow this mandate. The government had to issue Commercial Courts (Statistical data) Rules, 2018 to increase the compliance and the number improved from three to a total of five High Courts following it. [13] The disposal rate of cases in Commercial Courts is below 10% across states. [14] 

Even though the Act tries to accelerate the process by making it more progressive, the implementation of the Act brings down its essential value. There is a dearth of judges to adjudicate these cases and the number of the courts setup is also not sufficient. In cities like Delhi, there are 14244 cases pending in 11 commercial courts [15]. In Karnataka [16], there are 1089 cases pending in 3 courts and in Tamil Nadu even though there are 32 courts, 1305 cases are pending. [17] It has been noted that in Commercial Courts of Punjab the pendency rate of cases increase by 7.93 percent every month [18].

Another reason for the delay could be the increase in the amount of cases that have been filed in these courts after the recent amendment to the Act. In the amendment [19] the section 2(i) the Act was amended and the Specified Value was brought down from 1 crore to 3 lakh. While this move was appreciated for increasing inclusivity of small businesses, conversely it has tremendously decreased efficiency of the courts by increasing the burden on them and the execution of high value cases have become pending. As a general practice, Courts actively try to limit the cases they accept in order to maintain the efficiency of the system. In Bharat Bhogilal Patel v. Leitz Tooling Systems India Private [20], the court interpreted section 2 and clarified that only cases of Commercial Disputes of the Specified Value and above would be adjudicated under them. The amendment defeats this purpose completely.

Currently in Delhi as of September 2018, the commercial division had disposed of only 267 of 3,804 of the commercial disputes cases [21]. The act after this amendment seems to be deviating from its aim of making Indian legal process conducive to businesses. In Kandla Export Corporation and Ors. v. OCI Corporation and Ors., 2018, [22] the Supreme Court held that the Raison d`etre for the enactment of the Act was that commercial disputes involving high amounts of money should be speedily decided. The court said that the commercial courts have to adopt interpretations that further this objective and this becomes pertinent for India to remain an equal partner in the international community.

Comparative Study of Commercial Courts in other Countries

In the past decade, numerous countries have tried to address this issue by incorporating expeditious judicial proceedings and other similar methods.

1. France: France decided to elect traders and industrialists as special status justices. They are not professional justices but are well equipped to resolve commercial disputes as they understand the nature and needs of settling such disputes. They are elected every 4 years by their peers and act as counsellor justices [23].
2. Singapore: With a vision of becoming premier international commercial dispute resolution in litigation, arbitration and mediation, Singapore introduced specialist commercial courts[24]. They strategically started by adding commercial courts to Admiral Courts since their shipping industry is the strongest. Such an identification is important to recover from the losses occurred due to the current system.
3. Ukraine: In 2001, the government of Ukraine introduced a hierarchy of commercial courts and expanded the scope of these courts to include disputes with national bodies and state tax administration also [25]. Businesses interact with governmental institutions at every step. Hence, by expanding the scope of the commercial cases to include cases between government and businesses, Ukraine promises an encouraging business environment.
4. Kenya: In an effort to free the system of inefficiency and laxity, the courts in Kenya refused to grant adjournments. Only adjournments allowed were on the ground that the lawyer was engaged in a matter at the Appeal Court. [26] 
5. Maryland, USA: The Judicial Institute of Maryland has introduced special courses that trained judges, clerks and staff for working in commercial courts. Their courses are specially designed in consultation with Maryland State Bar Association, MICPEL. [27] 

All these countries and many more have integrated a strong system of commercial courts that are working exemplarily. These courts commonly have a high pecuniary value and are equipped with efficient infrastructure to deal with such cases regarding commercial disputes.

Conclusion

The Commercial Courts Act 2015 is an attempt to support the multiple policies of the government to make India a commercial hub. The Act is a progressive legislation that prepares a legal framework for expeditious proceedings. However, it fails to translate into a success because of substandard implementation. The lack of court infrastructure along with only a few judges with actual experience to handle such cases limits the object of the Act.

While comparing the act with other countries around the world and their approach to commercial courts, we understand the various ways of filling the lacunas in our system. We cannot discredit the fact that we are halfway there with an act with various innovative provisions to repair the system (like section 17 of the Act). 

Recent amendments and rules notified along with the current act instils hope of building a foolproof commercial dispute resolution system that would someday be internationally recognised and would make India a sought after destination for the commercial dispute resolution in litigation.

References

[1] Doing Business 2019 (16th ed.World Bank Flagship Group Report), table 1.1

[2] Doing Business 2019 (16th ed.World Bank Flagship Group Report), table 1.1

[3] Doing Business 2019 (16th ed.World Bank Flagship Group Report), table 1.1 (n 1) table 1.2.

[4] Shin-ETSU Chemical Co. Ltd v. ICICI Bank (and State Bank of India) [2003] Supreme Court Appellate Division of New York 

[5] Bhatnagar v Surendra Overseas Ltd (1995) 52 F. 2.d. 1220(3rd Cir).

[6] European Asian Bank v Punjab& Sind Bank (1982) 2 Lloyd’s Rep. 356 (CA)

[7] Vishva Abha: (1990 (2)) Lloyd’s Rep. 312.

[8] Civil Procedure Code 1908, s 35

[9] Mira Gehani and Ors v. Axis Bank Limited and Ors [2019] MH 0317

[10] Civil Procedure Code 1908, OXVIII

[11] Civil Procedure Code 1908, XV- A

[12] Commercial Court Act, 2015 s 17

[13] Misra V, “Commercial Courts: A Failure In Implementation” (BloombergQuint June 21, 2019) accessed October 18, 2019

[14] https://vidhilegalpolicy.in/wp-content/uploads/2019/07/CoC_Digital_10June_noon.pdf

[15] Welcome to High Court of Delhi:: Commercial Court Statistic Module http://delhihighcourt.nic.in/CommercialCourtStatistic.asp accessed October 18, 2019

[16] High Court of Karnataka Official Web Site https://karnatakajudiciary.kar.nic.in/commCourt.asp accessed October 18, 2019

[17] Misra V, “Commercial Courts: A Failure In Implementation” (BloombergQuint June 21, 2019) accessed October 18, 2019

[18] Misra V, “Commercial Courts: A Failure In Implementation” (BloombergQuint June 21, 2019) accessed October 18, 2019

[19] The Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts (Amendment) Act, 2018

[20] Bharat Bhogilal Patel v. Leitz Tooling Systems India Private, (2019) MH 1249

[21] Bharat Bhogilal Patel v. Leitz Tooling Systems India Private, (2019) MH 1249(n 14)

[22] Kandla Export Corporation and Ors. v. OCI Corporation and Ors. [2018] SC 0112 

[23] Al-Khulaifi MA and Kattan IA, “Establishment of Specialist Commercial Courts in the State of Qatar: A Comparative Study” (2016) 2016 International Review of Law 5

[24] Law Commission of India, Proposals For Constitution Of Hi-Tech Fast – Track Commercial Divisions In High Courts (188th Law Commission Report), 2003

[25] Law Commission of India, Proposals For Constitution Of Hi-Tech Fast–Track Commercial Divisions In High Courts (188th Law Commission Report), 2003

[26] Law Commission of India, Proposals For Constitution Of Hi-Tech Fast–Track Commercial Divisions In High Courts (188th Law Commission Report), 2003

[27] Lee Applebaum, ‘The New Business Courts’ (2008) 17 Bus L Today 13

The post Assessing the Implementation of Commercial Courts Act, 2015 in India: A Comparative Analysis appeared first on iPleaders.

This article is written by Akarsh Tripathi, from Symbiosis Law School Noida. The article aims to help and guide law students about how they can make the most out of this lockdown situation.

Introduction

The 2019-20 COVID-19 outbreak is having a global impact and there isn’t any single industry left, which has not been affected by this crisis. The COVID-19 crisis is different and is all set to cause global economic and human carnage. The nation-wide lockdown is wreaking havoc on the Indian markets already. 

Apart from health and the economic impact of this virus, the educational institutions and the academic industry is also one of the most affected sectors in the world. All schools, colleges, universities have been closed for an indefinite period due to the global pandemic of novel coronavirus, vaccine for which is still not available.

The lockdown and quarantine period have impacted students, professors and even law firms who were planning to hire interns from law schools. In an attempt to reduce the impact of disruptions and difficulties caused, the work-from-home programme has gained popularity across the world which has also resulted in a sudden increase in the usage of technology. 

Even universities have started providing online lectures to their students. Online platforms and even law firms are providing opportunities like remote internships, online courses, etc to law students so that their education is not affected because of the nationwide shutdown.

However, there are many law students confused about how they can make the most of this lockdown and what strategies they may implement, in order to develop their skills and gain knowledge while being quarantined at home. 

How can law students make the most of the lockdown?

Utilizing free time

We need to understand one of the most important things: This lockdown period is not a vacation or a summer holiday. It is a period of self-isolation and once this spread of novel COVID-19 is under control and things get back to normal, well, things will never get back to the initial stage. It is of common knowledge that the global economy is going to halt and problems like unemployment will be on a surge. 

Law students can utilize this time effectively and efficiently. This is a good time to gain knowledge about subjects that are not yet covered in your law school. The ultimate aim can also be to improve their CV and add more experience to it. So all you need to do is, cut down on the externalities like random socialisation, gossip, or usage of online streaming platforms, etc, and start investing time in activities which can give you long-term benefits. Start searching and looking for opportunities available like those mentioned below:- 

Note: There are platforms like Lawctopus and Katheri.in that regularly post updates about the current opportunities available for law students and those connected with the legal community. 

Online Courses

With the advent of the development of technology, there are many start-ups in our legal industry which focus on legal education and work with the aim to impart legal knowledge to everyone across the world. No matter where you are, or what you are doing. 

These online courses are mostly eligible for not just law students but also for people who are practising law. Many legal professionals, like attorneys, litigators, corporate lawyers also enrol themselves for these online courses, to gain knowledge about the developments in various subjects of law. 

This is the best time to enrol yourself in these online courses and get unparalleled knowledge on the subjects of law you are interested in. There are a plethora of subjects to choose from. 

Nowadays, websites like LawSikho, Enhelion, Edx, etc are also giving opportunities to law students to enrol themselves into various diploma programmes. Thus, it is highly advisable for law students to enrol in these online certificate courses.

Writing Articles and Research Papers

Law students can write essays, case commentaries, short articles, long articles, and notes on subjects of law they are interested in. These can be given for publication in reputed blogs and peer-reviewed journals. There are various online essay competitions, judgement writing competitions and even quizzes organised by universities and legal institutions from time to time. 

Content Writing tasks improve not only the writing skills of a student but also improves the researching skills and provides in-depth knowledge on various law subjects, which prove to give long term benefits to law students. 

Some of the trending and interesting topics to write blogs and articles are- refugee crisis, humanitarian law, international law, IBC etc. 

Practice drafting

Once you step into the world of practising law, you would be judged on your drafting skills and knowledge in matters related to contractual drafting etc. Legal writing training helps you to deepen your credibility, branding and employability because having good writing skills is directly proportional to the increase in chances of you being preferred by an employer.

Another thing you should keep in mind is to learn drafting legal documents from scratch and not use templates which are already available. Many people, including most of the practising lawyers, use templates for drafting purposes, and advice the same to everyone.

However, you can use this spare time and practice drafting from scratch which will give you an edge above other students. These are the activities which will be fruitful to you and will yield long term benefits to you.

Remote Internships

Work-from-home isn’t just for corporate law firm employees or litigators, etc. Even law students can implement this work programme on themselves. Another considerable and worthy opportunity which law students can acquire is that of online internships.

Due to the pandemic and lockdown situations, law firms have started shutting down their offices, and due to the increase in demand of legal professionals at this time; these law firms need interns who can remotely work from home.

Online part-time internships give a huge exposure to knowledge to law students. There are some internship opportunities that provide stipends to their interns, and also give you work, related to researching a particular subject of law. 

Thus, students should not make this mistake of losing these highly rewarding opportunities. It has a lot of benefits like building your networking for future internships, improving your CV by adding more experience to it, and, etc. 

Proper utilization of open-source journals

Reading and enhancing your knowledge can be really productive. One of the best ways to do this is by reading law journals like Harvard Law Review, Indian Law Review, Berkley Tech Journal etc, and reading judgements on cases of IBC, IPR  Law, etc.

These are some subject areas of law which are still developing and researching on these topics might provide you with insights unexplored or unknown to others.

Law students may also explore research platforms like Manupatra, Westlaw, Hein Online, etc and read judgements on subjects of law where their interest lies. 

Webinars and Youtube Videos

Webinars and Youtube videos are some of the most effective ways of utilizing your spare time. Many advocates and legal platforms have their youtube channels where they upload webinars and seminars. 

Webinars and online videos are a great way to learn while sitting at home. If you don’t feel like researching or reading or writing anything, you may sit back, open Youtube and watch webinars on channels like Lawsikho. This will surely give you an edge above the rest. These are one of the most resourceful materials you can find, and gain the knowledge and tips given by experts, professors, etc. 

Subscribe to channels like LawSikho, Finology Legal etc who provide a vast array of legal content. Since many of these youtube channels are run by practising advocates themselves, they can provide you with the guidance and counselling required in today’s world. So instead of using online streaming platforms for entertainment purposes, it’s advisable for law students to invest their time in such insightful videos as they will have an everlasting impact on them. 

Socializing and Networking

No, we are not talking about using Instagram or scrolling through your Facebook feed. Networking in the legal world means reaching out to more and more people who belong to the legal community and making a magnanimous relationship with them. 

In today’s world, having connections and a strong network amongst legal professionals is becoming essential. Thus, use this time to improve your LinkedIn profile, update your CV, etc. You can also join various Telegram and Whatsapp groups run by Advocates, and other organisations, such as LawSikho, Deadly Law, LawFrat, etc. 

For the purpose of networking, many law students have now started to become Campus Ambassadors, also known as Law College Ambassador for various online platforms, such as Bar and Bench, Lawctopus, etc. This is a great way to build a connection with law students of different universities. 

Thus, law students can also look for campus ambassador programmes, and apply for the same. Remember, academics and marks do matter, but they are not the only essentials required for the survival of lawyers and other legal professionals. 

Bonus: More Tips

There are some students who know what all can be done to utilize the quarantine period effectively, and how one can make use of this lockdown in the best possible manner. However, they are looking for answers to questions like “How can we manage these work and still be able to relax and enjoy the spare time a bit?” Is there any time routine which they can follow and not over-burden themselves with work? 

The answer is Yes, there are many ways a law student, well actually any student, can plan his/her daily routines and at the same time improve their skills. Here are the tips one may implement:

1. Making a routine can generate optimum output, especially in a work-from-home environment, where students can plan out their routines as per their comfort.
2. Preparing a To-do-list, and cataloguing daily tasks is the first step, to begin with. At the time of preparing such a list, students should keep in mind their ultimate goal, i.e. what all they want to achieve till the end of this lockdown. There is no certainty as to when this lockdown will end, thus it is good to have multiple goals.
3. Law students who are planning to write a research paper should allocate a specific time for researching purposes. This should be accompanied with tasks involving content writing so that one does not feel monotonous and tired from the work.
4. The new aged legal community is not just focused on what’s written in your CV. It also takes into notice, the content which you have in yourself. A great way to develop this content could be by starting something of your own. For instance, a youtube channel where you as a law student share your internship experience or tell people about your research paper which recently got published. 
5. IMP: Don’t overburden yourself with a lot of work. Remember, it’s more productive to work uniformly for a month rather than working for 2-3 days straight and losing the spirit.

These are only suggestive ways and are not supposed to be followed as it is. Make sure you strategize and plan out the task based on your speed and comfort. 

Conclusion

In the end, you must remember not to sit idle. It is a time which if used effectively and in the best possible manner, will boost your legal career to a whole new level. Maintaining a decent work-personal life balance is something which becomes difficult for those who enter the world of the legal profession. They don’t get to spend time with their families and live a relaxed lifestyle. This is an opportunity you should also use to spend time with your family, and focus on your lifestyle too. Also, don’t be afraid to start something new, or explore a new opportunity. In the end, remember one thing:

“Be not afraid of growing slowly, be afraid only of standing still”- Chinese Proverb

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post How can law students make the most out of the lockdown? appeared first on iPleaders.

This article is written by Yash Singhal from Vivekananda Institute of Professional Studies, New Delhi. This article specifies methods to manage knowledge inflow during the lockdown period along with the positives of each method or source.

Introduction

Every individual in the current situation of national lockdown has been affected physically and mentally due to the restrictions placed all around the country.  All legal professionals need some sources of their personal interest to manage their knowledge inflow during this period. The online as well the offline sources must be effectively used by them to develop or acquire knowledge for future success. Time is significant for every lawyer, hence, it shall be put to maximum use by them. The article devises strategies to manage knowledge during the lockdown without the need to move out of the house.

Knowledge management during the lockdown

The lockdown has practically confined all people to their houses with all public places shut down and police out on the roads to prevent any unnecessary movement amid the spread of COVID-19 through human contact. The national lockdown, however, unsystematic it would seem, is an attempt to break the chain of the spread of the virus as said by our Hon’ble Prime Minister.

In these difficult times, when we have to spend the whole day inside our houses, it is really important to adopt certain activities to keep ourselves physically and mentally healthy. Physical fitness can be achieved with in-house exercises once a day but the actual issue is with the mental well being which is disturbed with lack of social interaction with the outside world. 

Communication through digital means has been the most preferred norm in times of crisis, while the inevitable dependence on technology forced people to learn technical skills in order to engage in ‘work from home’ culture. Even the court proceedings are conducted through video conferencing.

The die-hard critics of technology have also been pushed into accepting it without any arguments as no other option is left with people to keep up with their work. The students have been provided with online material to cover the syllabus so they don’t miss out on anything due to time-lapse in the future or face any disadvantages owing to the pandemic. All professional employees in firms have been receiving online work updates from their employers after separation of work through video conferences. 

The productivity of individuals has been affected in this period for they believe that they don’t have any other activity to engage in since they are restricted to their houses. In this period where we have achieved optimum technical advancement, there is no limitation to the extent of knowledge that can be found online. Keeping this thing in mind, the following pointers are a few modes of knowledge maintenance during the lockdown period for legal professionals to keep them all out of boredom and yet put themselves in a position where they will gain knowledge of some topic in detail.

These points are not exhaustive in nature and it is up to subjective choices of the reader to select those modes that they are comfortable with or search for any other mode online. The basic purpose of the list is to put the free time in use while keeping the productivity intact. 

Learning a new language

There is no end to the extent of knowledge one can receive in a lifetime. These words should be the driving force behind an individual’s motivation to gather all sorts of knowledge present in his near surroundings. In these times of globalisation when the national economy has been integrated with the world economy, international travel and communication has increased. The process of outsourcing work to other countries for cheaper costs, better productivity, to decrease the workload of local employees has been adopted. The receiving of consignments from international companies regarding corporate firm deals or signing contracts for any legal assistance or any task thereof. 

Every country has a language that is spoken by and understood by the majority of the population, which makes it necessary to learn as many languages as possible and attain some level of proficiency to be able to communicate effectively with those speaking a similar language. Learning new languages would surely increase the horizon of an individual’s reach in the world and communicate the interests in working together with the international clients. 

Learning a new language takes time and commitment on the part of the learner, which can only be developed with keen interest in the same. This lockdown period is the perfect opportunity to surf the internet on significant sources through which a new language can be learned. An individual is bound to succeed if he/she is at an advantageous position compared to rest, in terms of added proficiencies.

Learning a new skill

In these intense times, every individual needs to find an activity to divert its attention from the ongoing crisis which has the potential to discourage the strongest of personalities restricting them to the walls of their houses. Prolonged social inactivity might reduce the level of productivity of people that they are capable of in normal conditions, in which case, physical or mental activeness needs to be maintained by learning a new skill.

There is no specific list as to which skills can be learned in this period but the individual has to choose according to their interest. There are various fields of skill set but only a few are mentioned in the article:

• Reading Skills

Reading is one of the best skills a legal professional can develop in their lifetime. There are far too many positives of reading, from extensive information on a particular topic in a knowledge-based book to a fiction-driven story that can develop the creativity of the person. An interest in reading can help the individual increase the reading speed over time which could be beneficial as they will be able to read long judgements in an instant while understanding everything contained in it.

Apart from books, there are other sources available as well, a thorough reading of which is essential for the overall knowledge of people. Regular blog posts on iPleaders blog are a must-read for all law students to get all information regarding a topic at one place in simple language. Newspapers are an amalgamation of all news articles covering fields of interest including- national, international, business, sports news for all sorts of enthusiasts. An avid reader of newspapers is well aware of the happenings in the whole world and puts the person into a position to form opinions on all political, social, cultural issues. 

All legal competitive examinations contain a portion of General Knowledge that makes it even more important for the aspirants to follow every news article to become up to date with all information from around the world. Regular reading exercise would be a fine mental activity during the lockdown to keep the person in good stead and maintain the knowledge base of the individual. 

• Writing Skills

Writing is an important skill required by everyone, especially law practitioners. Writing research papers and judgements are some areas where writing skills are very essential in the field of law.

The submissions made in court are to be drafted with precision with zero errors where the drafting skills of the litigators and law firm employees come into fore. These drafting submissions include drafting contracts, deeds, etc.

The writing skills are improved by making an initial draft of an article or a judgement and subsequent drafts until a final draft is reached that includes every minute information that the writer wanted in them.

The grammar, punctuation, spelling, and vocabulary are some basic skills required for writing an accurate write-up. Every company in the market has a website to reach out to its target audience which is an amalgamation of every service the company provides to the customers or clients. These websites are incomplete without the content which is the task of the content creators to present in ways that can attract people to consume their services while providing substantial details of the services they specialize in. The legal content writers are employed to write legal content on the websites.

People need to brush up on their basics of fundamental principles of writing. Write on a regular basis to get a knack of writing, then proofread the write-ups as if it’s their job to analyse different articles.

A companion to write with would motivate them to improve their skills by learning from each other, read other judgements to understand the structure while not losing out on the relevant information, start with writing brief articles on issues that one associates with or is interested in or admires the most. Every write-up should have an outline drawn before the actual piece to not miss out on any detail which the writer wanted to include but forgets in the process.

• Computer Skills

Every individual is expected to know a certain level of computer skills to be able to handle technical work with less manpower in less time. Computer skills are a mandatory prerequisite to employment terms and conditions as these skills are considered essential for the employee in order to be an asset to the company. 

In recent times, when work from home culture is the only alternative left with the people, computer skills of the people are tested to the helm with all kinds of official interaction done over computers. The judges and the advocates are carrying out the court proceedings over computers. The ones who are not competent enough with the computer applications are suffering during this lockdown, this calls for learning of computer skills for youth that include young lawyers, freshly graduated lawyers, law students and aspiring lawyers to prepare themselves for any such future inconveniences.

The computer skills might range from simple software applications such as Microsoft Word, Microsoft Powerpoint, Microsoft Excel to complex skills such as learning to use cameras for video calling and conducting video conferences over computers.

• Communication Skills 

The art of communication is the primary skill required by a lawyer in a social setting to be able to express their thoughts, feelings, emotions, and ideas in a way that is comprehensible and encoded by another person to mean the same message as the person communicating it had.

Communication skills are preferred over any other skill as the person with the ability to express correctly has better chances of corporate or litigation success than those who are aware of the stuff but lack adequate communication skills. The court proceedings are a battle of communication skills of two lawyers, the one with better skills gets the judgement in its favour.

The communication skills are effective ways of using appropriate words in a simplified manner for everyone to understand the message. It is developed by continuous practice of trying to communicate with others through oral or written means.

Online Courses

The online courses available over the internet is a significant way to manage knowledge during this period. These courses are provided for various fields by different institutes/organisations/persons on their websites or youtube. Lawsikho provides a wide range of online law courses to be taken advantage of by people during this period.

These courses may be free of cost or charge affordable fees for certificate courses, which contains the learning videos along with questionnaires at the end of these videos to test the understanding level of the individual. The certificate is provided after a prescribed time duration of the course and an assurance achieved by the course provider over the capacity of the individual in that particular course. These online courses are more effective ways of learning complex courses in a short span of time than going for an offline course which costs more.

The person has the option to watch the course video number of times while going at a speed that is suitable to them. These online certificate courses are identified everywhere in all the firms as an achievement of the person.

Accessing free journals and books

The Internet has a plethora of online free journals and books which can be accessed at any time with just a simple click sitting at home. These journals and books can be downloaded by individuals in the pdf form and be read in the comfort of their bedrooms. 

Journals and books could be hired from a library but even that is limited, in terms of only limited stock available, added to which the lockdown has also restricted that limited stock. The internet does not have any extent to which the resources are available for free of cost, either full text or their interpretation in the perspectives of different judges or their reference in different cases. The law journals are a set of research papers in different fields of law.

The ideas learnt from the sources are articulated further in the future as precedents or improve the society in ways specified in these journals and books. It increases the analysis capacity of the individual to use them in his/her own benefit during a case in the future.

Conclusion

There are numerous online and offline ways to maintain the inflow of knowledge during the lockdown period. All individuals within their capacity and interests have a plethora of choices to choose from to keep them busy while gaining knowledge. Learning a new language, learning a new skill, online courses and access to free journals and books are few examples of available sources which could be utilised by people to increase their creativity in unimaginable ways. These sources are not limited to any profession but are significant for legal professionals in every walk of life.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Knowledge management during the lockdown – How to go about it? appeared first on iPleaders.

This article is written by Sushant Agrawal, currently pursuing B.A.LL.B. from Faculty of Law, Aligarh Muslim University. In this article, he critically analyzes the Juvenile Justice Act, 2000.

Introduction

Children are considered to be the gifts of God and supreme assets of any State. We as individuals, parents, guardians, and society have a duty to give every child an opportunity to grow up in a healthy socio-cultural environment so that they can become a responsible citizen who is physically, mentally and morally compatible to the society. It is also a duty of the State to provide equal opportunity to children in their development stage in order to ensure social justice. In return, Children are expected to be obedient, respectful and have good qualities in them.

As famously said that criminals were not born rather made. Society, culture, modernization, differences, bad company, etc., forces many children to disobey the settled social and legal dictums. A single act of a child can be violent, destructive and dangerous to society. We need to protect children because today’s children are our tomorrow’s future.

Meaning of the word Juvenile

Juvenile originates from the Latin term juvneis which means ‘young’. The United Convention on the Rights of Child defines a child as “every human being below the age of 18 years unless, under the law applicable to the child, the majority is attained earlier.” Similarly in the Indian context, a person below 18 years of age is known as a juvenile.

History of Juvenile Justice System in India

India has a long history of Juvenile legislation which is generally based on British pattern. Two Indians, Krishna Chandra Ghoshal and Jai Narain Ghoshal in 1787 proposed to Lord Cornwallis (Governor-General) to establish home for the impoverished of the Calcutta who happened to be beggar, widows, and orphans. Apart from this, they also recommended that the impoverished must undergo compulsory education. On their suggestions, shelters home to 500 impoverished were built near Calcutta and an Orphan Committee was set up for the protection of orphan children. Efforts of these two Indians have changed the fate of many destitute of Calcutta. Similarly at Bombay, a nucleus for juvenile reformatories was established in 1843, which later came to be known as David Sassoon Industrial School.

Before common law, laws relating to juvenile justice were governed by the personal laws- Hindu law and Muslim Law.

The idea to provide a separate treatment to juvenile offenders was passed in 1850. Chronologically, The Apprentice Act of 1850 was the first legislation governing juvenile deviance in India. It proclaimed that the binding of apprentices was for empowering children and supremely orphan and poor children who were nurtured by a public charity, to learn the trade, crafts, and employments, by which they could be able to gain a livelihood. It applied to boys and girls between the age group from 10 to 18 years. Under this very Act, a child could be bound as an apprentice by his/her father or guardian to learn any trade or craft for a period not exceeding seven years. This Act gave an opportunity to many young orphans, destitute and petty offenders, to earn an honest livelihood. It has a similar pattern with the Apprentice Act of England that was passed in 1802.

The Indian Jail Committee 1919-1920 recommended one of the most important developments in the juvenile justice laws of India. For the first time in history, reformation and rehabilitation of offenders were recognized as the foremost objectives of the prison administration. The committee also recommended having separate Courts and homes for children. Two agencies were set up at the trial level to deal with delinquent and neglected children, which was earlier tried by only one agency.

Children Act, 1960 provided for the care, protection, maintenance, reformation, and rehabilitation of the neglected and delinquent children. For the very first time, imprisonment of any child was prohibited under any circumstances. The Act also provides for separate adjudicating bodies– children court and children welfare board, to deal with delinquent children and neglected children respectively. However, it sowed a seed of gender discrimination in the definition of a child. This Act applied to boys who were under the age of 16 years, while girls under the age of 18 years.

The United Nations Minimum Rules for the Administration of Juvenile Justice (also known as Beijing Rules, 1985) have been framed keeping two concepts in mind. Firstly, Diversion, that means children should not be processed through the criminal justice system, as it will amplify the criminality of the child. Secondly, Detention must be the last resort and also for the shortest period of time. For the first time, the term ‘juvenile’ was used in International Law.

With the enactment of the Juvenile Justice Act, 1986, distinct machinery was set up to deal with delinquent and neglected children. The delinquent children were those who come in conflict with the law after committing an offence, whereas neglected children were those who found begging, homeless and destitute, or those living in brothels or with sex workers or frequently going to such places or those who are likely to be exploited for an illegal and immoral purpose. In addition, separate institutions were set up for processing, treatment, and rehabilitation of the delinquent and neglected children.

Juvenile Justice Act, 2000

The Act changed the terminology for delinquent and neglected children to ‘child in conflict with law’ and ‘child in need of care and protection’ respectively.

This Act provides for the establishment of the Juvenile Justice Board for giving justice to the juvenile in conflict with the law. Board is authorized to allow the juvenile to go home after advice and admonition [Section 15(1)(a)], direct the juvenile to participate in group counselling [Section 15(b)], to perform community service[Section 15(c)], order the parent or the juvenile himself if he is over 14 years of age and earns money, to pay fine[Section 15(d)], direct the juvenile to be released on probation of good conduct and placed under care[Section 15(e)], make an order, directing juvenile to be sent to a special home[Section 15(g)], and having regard to the nature of the offence and circumstances of the case, to reduce the period of stay in a special home[Section 15(1)].

The Act provides for the establishment of the Child Welfare Committee for disposing of the matters of the child in conflict with the law. This Act provides for the care, protection, treatment, development, and rehabilitation of the children as well as to provide for their basic needs and protection of human rights [Section 31(1)]. The Act also authorizes to establish observational homes for the temporary reception, care, protection, training, development, and rehabilitation of the juvenile in conflict with the law during the pendency of the inquiry and shelter homes for the children who need urgent support [Section 8, 9, 34 and 37].

The Act bars the infliction of a death sentence, life imprisonment and prison in default of fine or furnishing security. The crucial aspect of the Act is the removal of disqualification attracting a conviction of the offence and publication of the name, address, etc. of the juvenile in any newspaper, magazine, etc[Section 19 and 21].

Section 23 of the Act, provides for the punishment for cruelty to juvenile or child by a person having actual charge or control over that juvenile. Section 26 provides punishment for procuring a juvenile or a child for the purpose of hazardous employment, keeps him in bondage and withholds his earnings or uses such earnings for his own purpose. All these offences are cognizable in nature.

The Act also provides for juvenile or the child welfare officer in every police station with an aptitude and appropriate training to deal with the juvenile in coordination with police and creation of a Special Juvenile Police Unit to upgrade the treatment of police with juvenile or children.

Now the question arises, whether the Juvenile Justice (Care and Protection of children) Act, 2000 has fulfilled its objectives? Whether the machinery under this Act is working satisfactorily? Whether this Act is able to provide justice to the juveniles? Whether the changes brought by this Act are proper and adequate?

Even after having such a law, child exploitation, abuse, and tortures are not reduced. The criminal tendency of the children is increasing day by day. Let’s discuss the grey areas of this Act.

The first is related to the responsibility of the Juvenile and Child Welfare Officer in a police station as well as the special police unit created in every district and city to deal with juveniles and to upgrade the treatment of police with juvenile or children. The said officer is usually, either busy in the criminal investigation and administration or has no interest in such matters. They are obliged to produce the child before the welfare board for care, protection, development, and training, but the police officers were reluctant towards their powers and duties. This all happens because of the absence of superior authority to control and supervise them. They are not accountable to any agency. The employment of child for begging, procuring of a child or Juvenile for hazardous employment and keeping him in bondage and withholding his earnings or use of such earning for his own purpose is made a cognizable offence, that means the police can investigate the matter without Magistrate’s order, but they are failed to take steps.

The second problem is related to the powers of Juvenile Justice Board, wherein after inquiry, the board has a very wide blanket to ‘release’ the juvenile to home after advice or admonition or to participate in a group counselling, community service, order to pay fine, order to release on probation of good conduct and lastly to send him to a special home, which defeated the purpose of this Act i.e. training, education, reformation, and rehabilitation. Even if the Board decided to send the child in a special home under section 15(1)(g), then also, the period of the stay may be reduced, which results in the release of the maximum number of children without proper education, training, and correction. Such vast and vague powers of the Board are unreasonable and arbitrary in nature.

The third problem is of age, which is changed from 16 to 18 years in the case of a male child, which is not proper in recent times. As per Indian Penal Code,1860 the child below 7 years is doli-incapax (can’t be held liable for any offence) where a child between 7 to 12 years is doli-capex (can be held liable for the offence committed). That means a child above 12 years is capable enough to understand the nature and consequence of his act, and therefore must be held absolutely liable. In today’s era, the age of majority is reduced. A male child attains puberty in 13 years of his age. That means a male child above 13 years is capable enough to commit sexual offences which required sufficient mental and physical capability. But even after committing such a heinous offence, he can be absolved from his liability.

The next aspect is that this Act is purely reformative. The present World is indeed focusing more on reformative theory, but we cannot prevent crimes merely by reforming criminals. Juvenile committing heinous offences like murder or rape must face the penal consequences of their acts because each juvenile is coming from different backgrounds possess different maturity of understanding and many are encouraged to commit a crime, as the punishment is very lenient. So, while applying reformative theory, strict deterrent theory should also be given importance.

Lastly, the Act bars the appeal against the order of the Child Welfare Committee in respect to finding that the child is not neglected. A person has no right to challenge the order of the Board and Committee before any court resulted in the release of the wrongdoer without the reconsideration of the matter. This provision is against the right to appeal, thus justice is denied.

Conclusion

Thus on the basis of the above discussion, we can say that mere cherished principles would not do any good to society. The actual practice must be given importance. Lack of cooperation and supervision among the different authorities is a major drawback of this Act. Many persons (including police officers, lawyers and judicial officers too) related to the implementation of this Act are unaware of the concept and philosophy of the juvenile justice system. The law enacted requires an effective implementation to see the desired results. The society must be encouraged to give enough space and opportunity to the children for their development and reformation. The Judiciary has played a very applaudable role in the proper implementation of the juvenile justice system by interpreting the provisions of various legislations to give maximum benefit and relief to juveniles. Serious implementation of wonderful legislation can certainly reverse the crime trends in juveniles.

The post Critical Analysis of Juvenile Justice Act, 2000 appeared first on iPleaders.

This article has been written by Arya Anand, a BA.LL.B(Hons.) student at Vivekananda Institute of Professional Studies, Guru Gobind Singh Indraprastha University, New Delhi.

Introduction

The World Health organisation has declared novel coronavirus (COVID-19) “Pandemic”. SARS-CoV-2, commonly known as COVID-19 is an air borne disease and has rapid contagious characteristics. The lockdown method seems to be the most adopted approach by countries across the globe in lieu of curbing the increase of COVID-19. Earlier in March, it was announced as a Notified-Disaster in India. This led to imposition of quarantine on people coming from other countries. 

The outbreak of Coronavirus (COVID-19) first reported in December 2019 at Wuhan, China has now created vulnerability in the entire World. According to Reports, China is now able to “flatten the curve” after imposing curfew-like scenarios for months. On March 24th, the Home Ministry of India issued a notice for complete lockdown of the entire nation for 21 days to break the chain of transmission. 

The word quarantine has its roots originated from Italian word “quaranta giorni”. In Cambridge Dictionary, “Quarantine” is defined as a period for an animal or person that might have disease is kept away from other people or animals so that disease cannot spread. Government-imposed quarantine was common in ancient times. Historical evidence suggests that the practice had been started during the period of ‘Black Death Plague’ in Spain where ships arriving from infected ports were required to quarantine for a period of 40 days before landing on shore. 

Quarantine is done by the government to restrict the movement of suspected or ill people who are exposed to spreadable disease. Isolation and quarantine, as words are commonly used reciprocally but however, they differ in meaning. Isolation is separation of contained people from healthy one, whereas quarantine can be done by potential suspects as well on healthy people, if one has been exposed to disease. 

Can Government impose quarantine on anybody?

Quarantine can create inconsistency between protecting public health and respecting fundamental rights of individuals. Usually it is regarded as measures of last resort, but it can be imposed by the government, when national security and public health is at stake. The primary reason behind quarantining a suspect for 14 days is as the virus has an incubation period of 14 days so a person who has been ill, may carry and transmit it up to two weeks. 

Early in March before the complete lockdown scenario, India virtually quarantined itself from the rest of the world suspending all visas till 15th April except diplomatic, UN international organisations, employment and project. All incoming travellers including Indian nationals who have visited China, Italy, France, South Korea, Spain and Germany after 15th February were asked to quarantine themselves for 14 days. Quarantine is to be imposed even in authoritarian regimes where the government has absolute power to take every political decision. University of Texas, in its recent report, has shown that the risk of transportation of COVID-19 was more than 50 percent in Wuhan to 369 cities of China before quarantine. The Ministry of Health and Family Welfare of India has issued proper guidelines for home quarantine which is applicable to all forms of suspect and confirmed cases of COVID-19. 

Quarantine Power and Legislation in India

The legal framework in relation to tackle the current Pandemic situation and public health disaster arising out in India interpreted from major legislations:

• The Constitution of India. 
• The Epidemic Act 1897. 
• The Disaster Management Act, 2005. 
• The National Health Bill, 2009. 
• Indian Aircraft (Public Health) Rules, 1954. 
• Port Health Rules, 1955. 

There is a constitutional division of legislative responsibilities between centre and state that are prescribed through the subject list in the Seventh schedule. As per the inference, it can be taken into account that both union and state government are constitutionally empowered to legislate in matters of public health. Right to health and public healthcare has been given in “Fundamental rights” (part III) and Directive Principle of State policy (Part IV) of the Constitution. Article 47 which comes under DPSP has imposed duty on the State to raise the level of nutrition and the standard of living and to improve public health for ensuring the goal behind the right to healthcare. 

The Hon’ble Supreme Court of India in the case of State of Punjab and Others v. Monider Singh has observed that ‘Right to health is integral to the right to life under Article 21 of the Constitution’. However, quarantining as a measure can affect the fundamental Freedom granted under Article 19 of Constitution but this can be defended through a famous legal maxim- Sic Utere Tuo Ut Alienum Non Laedas which means restrictions vis-à-vis enjoyment of the fundamental freedom to the extent it affects another’s enjoyment of life, property and well-being. Also this right has to be enjoyed with some reasonable restrictions which can be imposed for the safety of public health. ‘Right to Privacy’ has been also used to contradict the imposition of quarantine however the right of privacy is an acquired right as mentioned through elaboration of Article 21 in various decisions of our Apex court. So, through power of quarantine, the centre and state government can affect the political and civil rights of people in India. 

The Epidemic Act, 1897

The Epidemic Act, 1897 was framed by British government after the bubonic plague outbreak at Bombay Presidency and soon after raged in the whole colony. It claimed twelve million deaths initially. 

Section 2 of the Act is significant as it permits the state and central government to take special measures and give regulations for the general public that helps in containing the spread of disease. It has a wide scope of legislation. Section 3 of the Act prescribes the penalty for disobeying of any regulation along with section 188 of Indian Penal Code, 1860. However, it also gives exemption to people who are doing acts in pursuance of good faith. 

The Epidemic Act, being almost 120-year-old legislation, is archaic and has limited tentacles, so it can be considered as non-functional in itself. This Act does not prescribe how quarantine measures should be taken during epidemic situations. There is no transparent reference mentioned about ethics and human rights during a pandemic situation in the country. Also, the ambiguity arises on total dependency of section 188 of IPC which deals with punishment on violation against regulations of government, can provide complete justice to victims of epidemic in the country. This Act being, pre-constitutional in nature provides eminent power to centre and states without any parliament overview. 

With the directions of the Hon’ble Prime Minister, a high-level Group of Ministers (GOM) has been constituted to review, monitor and evaluate the preparedness and measures taken for control of COVID-19. Many states including the government of Bihar introduced Bihar epidemic regulation 2020 for the smooth function. It empowers the government to forcibly “quarantine” any suspected person, to conduct mass screenings of suspects, sealing of any geographical area and take punitive action against those hiding symptoms of the virus or spreading misinformation. 

Disaster Management Act, 2005

Unlike the Epidemic Act, this legislation is exhaustive and has broader scope. The definition of Disaster as defined under section 2(a), can be simply interpreted to include COVID-19 under it. The Central Government has announced COVID-19 as a notified disaster. 

Section 10 of this Act deals with the monitoring and implementation of the National Plan and the plans prepared by the Ministries or Departments of the Central Government and gives overreaching superintendence power to the officer in charge. However, this Act does not speak about quarantine measures in particular. 

The National Health Bill, 2009

The National Health Bill, 2009 efforts to guarantee a legal context for providing essential public health services and empowers co-operation of Centre and the states for satisfactory response to public health emergencies. It mentions the obligations of government towards the public, however it lacks the ethical framework for protection of human rights during epidemics. An example can be taken from The Public Health Emergency Response Act of Mexico which clearly describes the individual civil rights of a person who is quarantined in the midst of a health emergency. 

Other laws related to quarantine in India

Quarantine of visitors in India is governed by the AirCraft Act and Indian Aircraft rules which gives powers to health officers appointed by the government to check the people entering the country from abroad. The officer can inspect the aircraft, its passenger and crew and subject them to medical examinations. He must follow the specific precautions with regard to period of quarantine, when there is spread of Communicable diseases. During the outbreak of Ebola in August 2014, Airport authorities of India followed the protocol and examined six nationals returning from Liberia but later on they tested negative. 

Union law also deals with Port quarantine. Similar restrictions on quarantine are provided in Indian Port Health Rules, 1955, following Indian Port Act. 

Quarantine laws in other countries and comparison with laws in India

In the United States of America, as per the Centre for disease control and prevention (CDC), the power of Quarantine derived from “police powers” granted broadly to states, counties and cities to protect public health. The power given to states to impose quarantine for control of COVID-19 is bigger in magnitude than any federal order. The laws vary from state to state or even locality. Riverside County mandated the quarantine when one of American flew home from Wuhan, China and tried to leave a California Military Base.

In 1824, the U.S. Supreme court, through a landmark case recognized quarantine power as unlimited state-based power. While looking into British laws related to quarantine, the parliament of England added the “Health Protection Regulation (coronavirus), 2020 under section 45R of the Public Health (Control of Disease) Act, 1984 which gives power to Police, public health and immigration officers to detain people suspected of COVID-19 and keep them quarantined, also exact £1000 fines can be imposed to those who do not follow the orders. The aim of these provisions is to ensure that proportionate measures can be enforced when necessary. Canada has an entire Federal Quarantine Act to curb the spread of COVID-19. It recently invoked the conventional Act and imposed mandatory self-isolation to travellers who have entered the country. The returning travellers are not allowed to take transportation like subways and trains. 

Conclusion

The quarantine legislation is improperly framed. It has been derived from a combination of laws such as The Epidemic Act, 1897, which is considered to be draconian law from British rule, as well as Air and Port Acts. In 2005, when the SARS epidemic outbreak, it arose concerns with regard to the severity of quarantine enforcement measures. Various reports came about disgracing of suspects and fellow citizens who were placed in quarantine and many patients in hospitals faced discrimination and confidentiality issue. Law is silent on the issue of mandatory home-based quarantine during such epidemic outbreaks. The associated laws are notoriously hard to reach to conclusion.

When imposition of quarantine is not done properly results in contagion of several healthy people, then the magnitude of liability will be bigger on which government, state or centre. There is no clear transparency on how much degree of quarantine measures the government can put in effect in Epidemic crisis. There must be guidelines for protection of Individual’s civil rights during Quarantine. The correlated laws are a bit controversial as quarantine as a concept has been opted from old practices. In India, there is no proper Medical tribunal to take up issues arising out of health calamity. In this brink of Catastrophe, more creative tools of law are required with respect to mandatory Quarantine and travel bans.

The National Health bill can be framed which promotes the beneficiary legislation on the controversial issue of public liberty and imposing quarantine measures. Apart from legislative interpretation, quarantine often affects the psychological pattern of humans. The negative effects from its implementation must be analysed as it can cause disbalance of human rights while securing public safety. The reports came out from suicide to anger management as well as anxiety arising out from loss of freedom during quarantining people, have created havoc. A study showed that mental health gets affected after younger people come from quarantine. Evidence synthesis can be taken as basis of legislation making while framing laws. Government can emphasis on humanitarian choice of quarantine over individual rather than authoritarian imposition. This hour of public health crisis demands support rather than restrictions. 

The post Power of Quarantine and related laws in India appeared first on iPleaders.

The article is written by Bodhisattwa Majumder, from MNLU, Mumbai. He can be contacted via mail (bodhisattwa@mnlumumbai.edu.in) or phone (+91-8240830901).

DISCLAIMER: I am not a professional. I am a penultimate year student who takes genuine interest to learn and help others. Every word of this article is based upon my personal experience, and expert advice which I have gained from the Internet, and certain kind individuals whom I have interacted with in my internships, college and LinkedIn. This article is for beginners, who think they have no clue about legal writing.

Select a topic first, Not the publisher

Yes. Select a topic first. Don’t choose the end first, basing your research topic on a “Call for Paper” would be limiting yourself to their demand, rather than flexing your passion and comfort. Trust me, you will have a lot of journal choices for any type of law you choose.

Take caution! Don’t try to convert your Moot Court Memorials or other assignments into research papers! I have often come across several law students trying to convert their memorials or academic projects into research papers for publications (often sinned that myself too), However, what I have found is, that it is a great setback for budding authors. You might feel that given that as you have already researched that field you have better chances and you will be able to publish easily. Firstly, the topics for the moot research are often not what the publishers or readers want. Secondly, already having worked in a lackadaisical way (projects in my case) brings in boredom and lack of interest and as a result, you are in a hurry to get it done with. After that, the result is a half-hearted submission which has higher chances of rejection. DONT DO THIS. Star afresh. Look for burning issues that align your passion. Research on the requirements of the publishing houses. Consult your professors about the grey areas. Trust me it’ll be much better.

Characteristic of a topic?

The topic should be URI. Unsettled, Relevant and Interesting. All these components are very important and I will tell you why.

Firstly, if it is an already settled topic, then you won’t be able to give any original thought. You would be simply compiling the stuff. You don’t want to do that.

Secondly, if it is 20 years old, nobody cares about it. The recruiters will spot your topic only if it helps them in their practice.

Thirdly, even if it’s a burning issue and unsettled, you will lose interest if its bland and does not match your passion. Take a topic which makes you think.

But, how to find a relevant topic?

It is the most difficult and tenuous process to publish a paper. It has no specific way but I have found the following steps helpful:

1. Follow market leaders. Partners, Associates, Firms on LinkedIn. They regularly post the latest issues which they face in practice.
2. Follow legal news. Livelaw, Bar&Bench amongst a few.
3. Subscribe to Law journals. (might cost a buck)
4. Set up Google Alerts on certain keywords.

This will take at least a few weeks. It’s a very boring process but once you get hooked on you will enjoy it.

Research: Where to study from?

You have to develop a knowledge base. This has to be done stepwise.

1. Preliminary Knowledge: All the articles you can find on this online through Google Searches, they might sound quirky and local but read what they want to say. Trust me although they are not authentic, but they can be surprisingly precise at times. Very easy to read, so you will not sleep while reading it. This will help you get the basics and set an argument in motion.
2. Detailed Reading I: Books. Commentaries from known publishers such as EBC, LexisNexis, Sweet and Maxwell, Bloomsbury etc. They help understand the nitty-gritty of the subject and also understand the evolution of the law. BUT, be aware they are not often updated and latest case laws might be missing. This will help you frame a tentative argument.
3. Detailed Reading II: Journals. Bring in the Big Guns. Manupatra, SCC, HeinOnline, West law et al. You will get the most recent, most updates and most authentic information. This will help you substantiate your arguments and provide the authorities. BEWARE, these are often very complex and might make you sleep. Kick the passion!

Drafting: I have an idea, but can’t frame it!

No one can help you here. You have to put in your twelve years of slavery to practice. Some tips on writing:

• Don’t schedule writing AFTER Research. Write simultaneously. Only when you sit down to write, you will know what you NEED.
• Be precise and simple. No need to throw in jargons.
• Don’t copy as it is. Learn to paraphrase on your mind. Read a sentence, close your eyes and type without looking again. You have the inbuilt power of paraphrasing.
• Try to follow a direction. Make a flow chart if needed. Guide the reader. 
• There should be a connection and straight flow between the sections.
• CITATIONS: Go to a reputed journal which follows your required citation style, look up in old volumes how they have done it. It’s the easiest way out. Googling never helps here.

Where to send the manuscript?

The second-most difficult job. Finding the appropriate journal. A balance between reputation and success rate is to be ensured. If you are reading this article, most probably too reputed will disappoint you and too bad will be a disappointment after all this hard work.

• What to look while searching for a journal?

1. Genesis: Year of the first publication, the older it is, the better.
2. Frequency (yearly, monthly, annually). The more the merrier (higher probability).
3. Brands associated with it. Either in the form of reviewer, sponsor, editor, publisher. (Always go for an NLU Journal)
4. Region. If it’s a foreign journal, no matter how shitty it is, it will impress the recruiters. 
5. Outreach. Very difficult to find, but usually google help.
6. Nature. If it’s a paid subscription-based, it’s probably good. But not the other way around.

• How to find a journal?

1. Google: Search with the following keywords. “_____Law + Journal + Submission + Call”, Set advanced search and list by recent.
2. Call for papers: Lawoctopus, LawLex etc. Check the ads. But beware, a lot of competition here.
3. Follow the heard: Check where your friends or seniors have published before. Ask them.
4. Connections: If you have them, you don’t need this article.

Sending process

• INSTALL “mailtrack” already. You need to know whether anyone is reading your emails.
• Always use institutional mail ids for these things. Good impression. Don’t keep any other emails apart from professional mails here. If you MISS it, you will regret for weeks.
• Follow up every 7 days. It is a long process, often takes more than months. Be patient, don’t irritate the editor.
• Make an attractive cover letter. Have a professional DP. Place a detailed signature. I will provide mine:

Then?

Relax, and wait for “the mail”. All the best.

Frequently asked Questions

• What do you think is the better route? Writing elaborate papers for journals or writing articles for these online blogs?

You have to do both. Blogs display that you’re up to date and most people read blogs they don’t have time for elaborate papers. But papers look good on CV and displays that you have in-depth knowledge.

• So how many papers one should right?

No watertight answer for this. Based on your capacity. I set a goal of 1 Paper and 2 blogs in two months.

• Any idea what these recruiting firms want to see on your profile?

Based on interviews which I’ve given, they want to see two things:

1. PASSION: The branch which you are joining, you have some interest on that and you’re just not there for the bucks.

2. How to prove you’ve passion? Publications. You’ve applied your mind and you’ve kept in touch with the market

• Who should we ask for guidance?

Different people serve different objects:

1. For Topics: Professionals, Teachers.
2. For Drafting/where to send: Peers, Seniors.

• Is Co-authorship a good choice?

They are luggage or pullers. Either they will slow you down due to their lack of knowledge or they will move so fast you won’t contribute much. Be clever, go for co-authorship only when the other person knows a person who knows another person. Guaranteed publication, that’s what makes a perfect co-author.

That’s all folks!

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post A step-by-step guide to writing a Research Paper appeared first on iPleaders.

So today is the day! We are finally announcing the winner of our Blog Writing Competition of the 1st week of March 2020 (From 2nd March 2020 To 8th March 2020). 

We’d like to say a big thanks to everyone for participating! It has been a great pleasure receiving your articles on a different legal topic, they were all amazing! 

And now we’d like to congratulate our top 5 contestants who become the undoubted winners. They will receive Prize money of Rs 2000, LawSikho store credits worth Rs. 1000 and a Certificate of Merit from team LawSikho.

They will also get an opportunity to intern at LawSikho under the direct mentorship of Ramanuj Mukherjee, Abhyuday Agarwal, Harsh Jain and Komal Shah. Their articles got published on iPleaders blog (India’s largest legal blog). Click here to see other perks available to them.

Their entries (see below) received maximum marks based on the average marks given by the panel of editors, and has been crowned the winners!

Meet our next 5 contestants who made it to top 10 here. They will receive a Certificate of Excellence from team LawSikho.

They will also get an opportunity to intern at LawSikho under the direct mentorship of Ramanuj Mukherjee, Abhyuday Agarwal, Harsh Jain and Komal Shah. Their articles got published on iPleaders blog (India’s largest legal blog). Click here to see other perks available to them.

Click here to see all of the contest entries. Click here to see our previous week’s winners.

Our panel of judges, which included editors of iPleaders blog and LawSikho team, choose the winning entry based on how well it exemplified the entry requirements.

The contestants have to claim their prize money by sending their account details at uzair@ipleaders.in within 1 month (30 days) of the date of declaration of results and not afterwards. Certificates will be sent on the email address given by the contestant while submitting the article. For any other queries feel free to contact Uzair at 8439572315 LawSikho credits can be claimed within three months from the date of declaration of the results (after which credits will expire).

Congratulations all the participants!

Regards,

Team LawSikho

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Blog Competition Winner Announcement (Week 1st March 2020) appeared first on iPleaders.

This article is written by Anukrati Gupta, a student pursuing B.B.A.LL.B. from Symbiosis Law School Noida. In this article, she critically analyzes the Judicial History of Income Tax and Cement Manufacturing Companies.

Introduction

As per the statistics culled out by the government of India in the recent years, India is the second-largest producer and consumer of the cement industry. The major demand for cement is under sectors like housing and real estate, public infrastructure and industrial development; these three sectors constitute the major part of the economy. Cement industry has granted employment to more than one million people directly and indirectly. The industry because of its expanded nature attracts a lot of investment both from India and other foreign nations; and because of the huge amounts of money involved it attracts a lot of income tax for the revenue department of India. It further involves the judiciary system for a better and smooth working as it helps in preventing biased evaluations by the Income Tax Authorities. 

Further, the production process of cement is not that complicated. For the production/ manufacture of cement, there are different kinds of minerals which are required by the cement companies as their raw materials. The four major raw materials are limestone, clay, gypsum and water. Raw materials other than water are usually derived by the way of mining and digging of quarries. The production process starts with the crushing and grinding of limestone and clay separately in ball mills. After the proper crushing and grinding, these two raw materials are mixed with each other in a proportion of 3:1. 

After obtaining the mixture of the correct proportion of water is added. The addition of water in this mixture leads to the formation of slurry. The slurry is then poured in a furnace which moves in a circular direction and because of this characteristic circular movement, it is also known as a rotary kiln. The function of this rotary kiln is to make the slurry mixture dry by the way of heating it. For the heating process, coal is used as a raw material. Dried hot clinkers (solid form) are the resultant of this heating process. These clinkers are then cooled down by the use of air which forms the cool clinkers. These cool clinkers are then further added in the ball mills for grinding; here gypsum is added with the clinkers and the reason for the addition of the same is to prevent the resultant product from hardening. And after all of the foregoing process, the ultimate resultant is ‘cement’. The cement is then packed in gunny bags which further becomes ready for the purpose sale. And it is after that the income tax comes into the picture as this when the income of the manufacturer gets involved. Now, it is necessary to understand the role of judiciary and Income Tax under the cement industry as it helps in preventing biased assessments by the Assessment Officer over the manufacturer’s income and for the same the following mentioned cases will prove to be helpful.

1. Commissioner of Income Tax vs. Saurashtra Cement Ltd. (2010) (Supreme Court) 

There are two types of receipts that are considered to be of importance under the Income Tax Act, 1961. Receipts under a business organization are exactly the opposite of what the expenses are and without them, there can be no existence of a business. The two receipts are Capital receipt and Revenue receipt; the primary difference b/w the two is that Capital receipts are the receipts of non-recurring nature which either create the liability of the company or reduces the company’s assets whereas revenue receipts are the receipts of recurring nature and are reported in the statement of income of the company.

In this following case, there was an agreement between the two parties for the purchase of additional Cement Plant. Within the said agreement there was a clause stating if the seller fails in the supply of the machinery within the time specified then the purchaser (assessee) is liable to receive 5% compensation on the respective machinery without the actual loss. Later in the case, the purchaser (assessee) suffered a failure in the supply of the machinery and for the purpose of the same received 8.5 Lakhs. The department assessed the compensation amount to income tax. The assessee was aggrieved with the same raised a similar question in front of the Court. 

Here, in this case, Supreme Court affirmed the decision of the lower court holding that the damages were directly and intimately linked with the procurement of a capital asset i.e., the cement plant, which led to delay in coming into existence of the profit-making apparatus. It was not a receipt in the course of the profit earning process. Therefore, the amount received by the assessee towards compensation for sterilization of the profit earning source, not in the ordinary course of business, hence is a capital receipt in the hands of the assessee. 

2. Glencore International AG vs. Dalmia Cement (2019) (Delhi High Court) 

In the following case law, there were two companies involved namely Glencore (Switzerland based firm) & Dalmia (Indian firm).

There was an agreement between both the parties regarding the purchase of coal. Glencore as per the clauses of the contract sent the consignment of coal, but Dalmia on the other hand for no good reason rejected the same. This Act of Dalmia of not accepting the consignment led to the breach of contract; for the purpose of the same Glencore instituted arbitration proceeding against Dalmia. The decision came in the favour of Glencore as it was proved by them that Dalmia was at fault and they had no specific or good reason to reject the delivery of coal consignment. Leading to the said decision Glencore requested for an arbitral award. 

Dalmia went to the High Court and under Section 48(1)(b) of the Arbitration Act took an objection against the same stating that there was no proper notice received by him as to the appointment of the arbitrator. Here again, the decision came in favour of Glencore. And further Glencore received compensation for the breach of contract.

A further question which came to the Court was: whether the amount received by Glencore towards the Breach of Contract is liable for taxation in India or not?

The Income Tax Authority contended that the amount received by the assessee was a ‘windfall gain’ and under Article 22(3) (talks about ‘other income’) of the DTAA between Switzerland and India, the said income will be taxed in India. Also, the department considered the money received by Glencore as arbitration cost and legal cost and stated it to be taxable under Article 22 as ‘fees for technical services’.

The Court here held that Article 22 covers income only from lotteries, puzzles, gambling etc which can be taxed in India and not the compensation received for the Breach of Contract. 

3. India Cements Ltd. vs. Commissioner of Income Tax, Madras (1965) (Supreme Court) 

The assessee, in this case, was a cement manufacturing-based public limited company. During the accounting year, it obtained a loan of 40 Lakhs rupees from the Industrial Finance Corporation of India; the loan was basically for the charge on fixed assets of the company. Now, while obtaining this loan there were several expenditures incurred by the Assessee. 

The question of law, in this case, was whether this expenditure can be allowed for deduction under Section 10 of the Act. 

The assessee for the purpose of taxation charged this expenditure in the profit and loss account for that year and instead showed it in the balance-sheet as mortgage loan expenses. The assessee wanted to treat the same as revenue expenditure but Madras High Court gave its opinion against the notion. The assessee not being satisfied with the judgment passed by the High Court appealed to the Supreme Court. The Supreme Court observed that the expenditure incurred by the assessee was exclusively for the purpose of business. So, for the purpose of the question raised in the Court, the expenditure should be regarded as revenue expenditure for the purpose of deduction.

4. Assam Bengal Cement Companies vs. CIT (1995) (Supreme Court) 

According to the facts of this case the appellant company is Cement Company which is involved in manufacturing and selling of cement. The facts further go on to state that the appellant company acquired the lease of certain limestone quarries for the purpose of manufacture of cement; the lease acquired was for 20 years with a clause for renewal for a further term of 20 years. According to the clauses of the agreement, the rent reserved was a half-yearly rent of Rs. 3,000 for the first two years and thereafter half-yearly rent of Rs. 6,000 with provision for payment of further royalties in certain events. Further, as per clause 4 and 5 of the lease agreement, there was some special amount payable as “protection fees”. The appellant following the agreement paid sums of Rs. 40,000 in accordance with two covenants and claimed deduction under provisions of Section 10(2) (xv) of the Act. The appellant contended that such payments are not the expenditure of capital nature and thus are liable to be exempted under the Act.

The question which was to be decided in this case was whether the assessee is right in claiming the payments as capital expenditure? 

Income-Tax Officer, Appellate Assistant Commissioner, Appellate Tribunal and High Court rejected the contention of the appellant. Aggrieved by the previous decisions the appellant went in appeal before the Supreme Court against judgment and Order of High Court. The Court reached a conclusion stating that Income-tax authorities, as well as the High Court in regard to the nature of payments being a capital expenditure, are correct and the sums of Rs. 40,000 paid by the appellant was not allowable as deductions under Section 10(2). Further, the Court went on to state the difference between the two expenditures. The Court defined capital expenditure as expenditure incurred for acquiring or bringing into existence assets (income-earning assets) which is majorly for enduring the benefits of the business. On the other hand, if any asset brought for running the business or working with it to produce profits is revenue expenditure. The Court also stated that the aim and object would define the nature of expenditure.

5. Dalmia Cement Ltd. vs. CIT (1976) (Supreme Court) 

In the following case, the appellant/ assessee was the owner of four cement factories. One of the factories was situated in Pakistan. The assessee initiated an order for the supply of the machinery/ complete unit for the manufacture of cement. The order was confirmed by the seller in the year 1947 and the agreement between them stated that the supply will be in the year of 1948. India was divided in 1947, so the machinery which was supposed to be delivered to the plant set up in Pakistan was sent to Orissa with an agreement between the government and assessee. The contract further stated that the machinery will be further sold to the Orissa Cement Company. So in the year 1949 when the machinery was delivered to the assessee and sold to Orissa Cement Company, the assessee earned a profit of 7 Lakhs. 

The question forwarded to the Court was the treatment of this profit earned by the assessee.

Dalmia/ the assessee contended it to be capital revenue. On the other hand, the revenue department explained the same to be a business transaction under profits and gains for business and profession and stated that under the definition of business it is an adventure in the nature of trade and further will be business revenue and hence will be taxed. The Court here agreed with the department and gave a decision in favour of the revenue department. 

6. CIT Vs M/s. Poddar Cement Pvt. Ltd. Etc. (1997) (Supreme Court) 

The SC, in this case, ruled that for the purpose of taxation, the term ‘owner’ could not be interpreted in the strictest sense by restricting its meaning to only the ‘legal owner’ of a property. Giving a constructive interpretation to the term owner, the Court opined that the income would be chargeable to tax in the hands of the person who received or was entitled to receive income from the house property in his or her own right, and not on behalf of the owner. 

“One cannot reasonably and logically visualize as to when a person in actual physical control of the property realizing the entire income and usufructs of the property for his own use and not for the use of any other person, having the absolute power of disposal of the income so received, should be held not liable to tax merely because a vestige of legal ownership or a husk of title, in the long run, may yet clothe another person with the power of residual ownership when such contingency arises which is not a case even here.”

7. Xstrata Coal Marketing AG vs. Dalmia Cement (2019) (Delhi High Court) 

In the following case law, there were two companies involved namely Xstrata Coal Marketing (Switzerland based firm) & Dalmia (Indian firm).

There was an agreement between both the parties regarding the purchase and sale of coal. The contract stated the number of coal shipments, the code of conduct and other relevant information and the rights of the parties. Everything was fine till the first shipment but there raised some issues regarding the second shipment which further led to disagreement between the parties. Xstrata with respect to the same terminated the contract and instituted arbitration proceedings against the same. In the arbitration, the decision came in the favour of Xstrata and for the purpose of the same Xstrata requested for an arbitrational award.

Dalmia went to the High Court and under Section 48(2) (b) of the Arbitration Act took an objection stating the reason that the award, if passed, will be against public policy. The Court here gave the decision in favour of Xstrata. And further, they received compensation for the breach of contract.

A further question which came to the Court was: whether the amount received by Glencore towards the Breach of Contract is liable for taxation in India or not?

The Income Tax Authority contended that the amount received by the assessee was a ‘windfall gain’ and under Article 22(3) (talks about ‘other income’) of the DTAA between Switzerland and India, the said income will be taxed in India. Also, the department considered the money received by Glencore as arbitration cost and legal cost and stated it to be taxable under Article 22 as ‘fees for technical services’.

The Court here held that A22 covers income only from lotteries, puzzles, gambling etc which can be taxed in India and not the compensation received for the Breach of Contract.

8. Dalmia Dadri Cement vs. CIT (1980) (Delhi High Court) 

The following case talks about four different grounds relating to the calculation of tax for the assessee in the mentioned financial year i.e. 1962-63.

The assessee was a manufacturing company which was involved in the business of cement. The business included both manufacturing and sale of cement. For the purpose of sale, the companies use gunny bags (jute bags) to pack the cement for efficient and easy transportation. The companies usually use both new and second-hand gunny bags for the same purpose. But a government mandate came out in 1960 which stated that second-hand gunny bags for the purpose of selling cement can’t be used. With respect to the same mandate, the assessee ordered a huge consignment of gunny bags. Later on in the next year due to scarcity of jute, the mandate was removed, and owing to the fact that jute became a scarce material the price of jute increased. The assessee sold these jute bags and earned a profit of around Four Lakhs. So the question put forth by the Court was, what will be the treatment of this profit earned.

The Court here, in this case, stated that bags, if not sold, would have been used for the purpose of manufacture and sale of the cement (which constitutes a part of the business). And hence this will be treated as a part of the trading operation, it will be taxed by the revenue department.

The second ground talked about the treatment of the commission paid in shares borrowed for the purpose of pledging them. The Court here, in this case, stated it to be a permissible deduction under Section 40(b) of the Act.

The third ground relates to the gratuity that is to be paid to the employees on either retirement or death. The Court here held that if the employer of the organization is under definite obligation with the employee then the deduction of any immediate payment or if any present or future payment is allowed.

The fourth ground talks about the situation where the assessee bought its own issued debentures. The money paid for buying the same was more than the face value. The assessee here claimed deduction of this specific payment. The Court here declined the contention of the assessee and stated that the expenditure is in capital nature and hence deduction cannot be allowed. 

9. Asbestos Cement Ltd. vs. Commissioner of Income Tax (1993) (Bombay High Court) 

Asbestos who is an assessee, in this case, is a UK based cement manufacturing company. Asbestos sold its shares of worth Rupees 22 Lakhs in India; this sale was approved by the government. The transaction which took place in the form of sale of a share was capital in nature which automatically led to capital gain receipts. 

The taxation on this receipt was to be calculated; both the assessee and department assessed the receipt in two very different methods. The assessee first converted the cost of acquisition of shares into pounds at the prevailing rate and also converted the share price into a pound. Then calculated the capital gains from the amounts converted as pounds and then converted the same into Rupees. On the other hand, the department calculated every transaction in the rupee currency and further assessed the amount. The resultant amounts from both methods had huge differences in them. The question under consideration was to find the correct computation of capital gains amount. The assessee, in this case, contended that their place of business was not in India and the accounts were maintained in the United Kingdoms so the computation done by them was absolutely correct. 

Bombay High Court, in this case, gave its decision in favour of the revenue department stating that such method of computation can only be exercised when the transactions are expressed in terms of foreign currency. Further also mentions that the sale and purchase both were regarding Indian currency. So, the computation done by the revenue department was absolutely correct.

10. Baroda Cement & Chemical Ltd. vs. Commissioner of Income Tax (1985) (Gujarat High Court) 

The assessee here in this case because of the breach of contract received compensation from the other party. The assessee contended this receipt to be non-recurring in nature, which further means that the receipt is capital in nature and cannot be taxed. But the department contended it to be wrong and assessed it to be taxable. 

So here, a question was put forth by the assessee stating that whether the damages received from the ‘Breach of Contract’ is chargeable under capital gain?

The High Court, in this case, answered this question in favour of the assessee and the reasoning given by the Court was that to consider a receipt as capital gain there needs to be a transfer whereof some consideration is received by the assessee for extinguishment of rights in a capital asset. The Court further stated that consideration and damages are two very different things and hence should be taxed differently. 

11. CIT vs. Saurashtra Cement and Chemical Industries (1973) (Gujarat High Court) 

The facts of this case state that the assessee was a cement manufacturing company. For the institution of the manufacturing process, the assessee leased a mining ground for quarrying of limestone. Later on, the assessee placed an order for plant and machinery for one Crore. Following that the machinery was later on installed and the manufacture of cement was initiated. There were several expenditures incurred by the assessee by the way of salary, travelling expense, brokerage, bank guarantee, rent, electricity insurance etc. Further, the assessee claimed a deduction for installation of machinery and quarrying of limestone.

The question before the Court was whether this expenditure, depreciation and development rebate for the extraction of limestone from mines can be treated as business expenditure and further can be allowed to be deducted from the income? 

Assessee contended that as these expenses were a part of the business and hence the expenditure should be allowed to be deducted. Also, the extraction of limestone cannot be treated as a separate business. The Court held that: 

(a) procurement of raw materials; 

(b) manufacture of the product; 

(c) sale; 

all the three things constitute a business and any expenditure incurred over the three will be treated as business expenditure.

12. CIT vs. Madras Cement Ltd. (2001) (Madras High Court) 

The facts of this case state that assessee incurred a huge expenditure in installing and commissioning a new cement mill in pursuance of modernization program whereby four existing cement mills were considered outdated by the assessee and owing to that replaced it with new ones. The assessee treated the expenditure as current repairs in his books and for his return on income stating that the installation of new machinery in place of an old one will lead to repair expenses. The Court answered this question in favour of the revenue stating that it does not fall within the scope of Section 31(1) of the Act. And further, there is a limit of a stretch of the imagination and the old machinery was totally discarded so it cannot be considered as repairs in any explanation.

A further question raised in the Court was whether subsidy received should be deducted from the cost of assets for the purpose of allowing depreciation, and via the help of previous decisions by various Courts it was held that no such deductions should be made. Further another question under consideration was whether guarantee commission paid by the assessee as revenue expenditure? This question was again answered in favour of the assessee and hence considered to be revenue expenditure.

13. CIT vs. Madras Cement Ltd. (2002) (Madras High Court) 

The assessee, in this case, was involved in the business of manufacture of cement. The assessee incurred some expenses in lying on a cement surface on the tennis Court on the benefit of the employees, erecting street lights in the housing colonies for the employees. The question which came up, in this case, was whether this will contend as capital expenditure or revenue expenditure. The assessee wanted it to be treated as revenue expenditure and revenue department, on the other hand, wanted to treat it as capital expenditure which further shouldn’t be allowed for a deduction for the purpose of calculation of taxation in the required assessment year.

Court gave the decision in favour of the assessee stating that it is not a permanent benefit and further any subsidy or benefit provided to the employees are to be considered as revenue expenditure as it is usually done for the betterment of employees so that their efficiency can increase.

14. Panyam Cements and Minerals Industries Ltd. vs. ACIT (1977) (Andhra Pradesh High Court) 

The facts of this following case state that under Sections 32 and 41 (1) of Income Tax Act, 1961 the assessee i.e. a cement manufacturing company received a certain amount as power concessions on existing rates. The assessee contended that the receipt they received was in the nature of windfall and casual and hence was not taxable. Income Tax Officer (ITO) on the other hand observed that receipt was in nature of rebate from Government towards power tariff and was accessible as revenue receipt. The question raised was whether the amount so received by the assessee was taxable or not?

The Court analyzed the given scenario and held that in pursuance of Government policy to supply electricity at concessional rate amount paid to assessee towards expenditure incurred by him was not casual or windfall receipts. And further, under Section 41(1) of the Act, the requirements were fulfilled for this specific income to be taxable. And hence it was stated that this income is liable to include in the total income of the assessee and hence will be liable to be taxed.

Further another question in front of the Court was whether the expenditure incurred by the assessee for the construction of the bridge can be claimed as a deduction or not? The facts stated that the bridge was constructed for the absolute necessity of the workers. Owing to such facts the Court held the expenses to be necessary for the purpose of business and hence can be allowed to claim deductions for. 

15. CIT vs. Manglam Cement Ltd. (2004) (Rajasthan High Court) 

In this following case, the meaning and scope of entertainment expenditure were widened. Here, in this case, the assessee spent a certain amount of money on gifts, food, beverages etc. The Court here, in this case, considered this expenditure to be entertainment expenditure under Section 37(2)(A) of the Act. Further, the Court stated that such types of expenses shouldn’t be ignored even if there is a contract, a custom followed or is a part of the usage of trade.

16. Bharathi Cement Corporation Pvt. Ltd. vs. ACIT (2018) (ITAT Hyderabad) 

In the following case, the assessee (Bharati Cement Corp.) was engaged in a business, dealing with the sale and manufacture of cement. For the purpose of taxation, the assessee filed his return on income with the department. The facts clarify that the assessee during the assessment year did not commence the business and has only earned interest on fixed deposits which he filed under the head income from other sources (share premiums) and hence, there was no income from the head income from business or profession. During the assessment proceedings, AO noted that assessee was incorporated as the company with limited liability. He treated the receipt of share premium by the assessee as income under Section 28(iv) of the Act stating that the directors and shareholders hugely benefit out of such investments and further the returns on the same should be taxed properly. On appeal, the Commissioner confirmed the addition made by AO. 

The assessee appealed to the tribunal and contended that the AO was wrong in stating that the investors have not consented before the selling of the shares and further benefitted. And further, the Court stated that the assessee’s income can be held liable for taxation under the head business or profession only when it is well established that the directors and investors have made huge profits out of such investments. And also mentioned that certain benefits do pass down but what needs to be checked is that have they really benefited out of it. The Court here ordered further investigation so as to work upon application of human probabilities and circumstantial evidence for the purpose of the same.

17. Ambuja Cements Ltd. vs. Dy. Commissioner of Income Tax (2019) (ITAT Mumbai) 

In the following case, the facts state that the assessee company is engaged in the sale and manufacture of cement. For the assessment year under consideration, the assessee filed its return of income. In course of assessment proceedings, the Assessing Officer while verifying the return of income and computation of income filed by the assessee found that the assessee had claimed Minimum Alternate Tax (MAT) credit of Rs. 20,12,95,237, pertaining to the assessment year 2006-07. However, while computing tax on book profit under Section 115JB of the Act, the Assessing Officer allowed MAT credit under Section 115JAA of the Act for an amount of Rs.6,99,46,873. The assessee challenged the reduction of MAT credit in an appeal filed before the first appellate authority. The revenue department contended that the MAT credit deducted by the assessee was a carried forward MAT credit. Here the assessee was an amalgamated company and was using the MAT credit of the amalgamating company.

The tribunal here took the view from various different cases and stated that the allowance of MAT credit of an amalgamating company at the hands of the amalgamated company can be done and is legal. And further stated that the assessee was correct in deducting Rs. 20,12,95,237 rupees as MAT credit. And also that any section under the Income Tax Act, 1961 does not specifically disallow the carrying forward and set-off of MAT credit of an amalgamating company.

18. M/S. Gujarat Ambuja Cements vs. Dcit Rg. 3(1) (2018) (ITAT Mumbai) 

This case talks about various deductions which were claimed by the assessee and further stating that it can be allowed by the department or not.

1. Expenditure incurred for the purchase of flowers, sweets etc during Diwali/ Dussehra. AO here disallowed the expenditure claimed, and on the appeal in the tribunal, it was held that the consistency of the Court’s decision will be given priority and hence this expense will be allowed to be deducted by the assessee.
2. Expenditure incurred by the assessee of amount 4.50 Lakhs towards consultancy charges paid for advice on civil construction. This amount was also disallowed by the AO, but again as in the preceding assessment years the expenditure claimed by the assessee has been allowed by the Tribunal, so here again, the expenditure was finally held to be deducted.
3. Expenditure incurred on service charge. This was treated the same as the previous expenses were treated by the Tribunal. 
4. Disallowance of expenditure on employee stock option (ESOP), the Tribunal here stated that the deduction can be claimed only in the year in which the employees have actually exercised the option on the basis of the share price at the relevant time. And further, as the condition was followed by the assessee the deduction was allowed.
5. Disallowance made under Section 14A, for reference materials on record and rival submissions were considered and it was summarized that the disallowance was made on an ad-hoc basis but however after considering the quantum of dividend income earned in the assessment year the disallowance was fair and reasonable. And hence the disallowance was not granted.
6. Interest income and truck hire charges were contended by the assessee to be treated as business income and on the other hand, the AO wanted this particular income to be assessed under income from other sources. The assessee contended that income under question is earnings by temporary deployment of the surplus and utilized funds, out of money borrowed for the purpose of business. The assessee’s contention was accepted here.
7. Disallowance of proportionate deduction on the premium on leasehold land claimed under Section 37(1) of the Act. The Court hereby taking view of the previous judgments came to the reasoning that this was a capital expenditure and the deduction disallowed by the AO was correct.
8. Disallowance of unutilized MODVAT credit under the provisions of Section 145A of the Act. The Court here relied on the Ambuja Cement Ltd. case (ITA no.3359/Mum./ 2005) and answered the question/ ground in the favour of the assessee.
9. Further, the grounds related to community welfare expense, temple expense, prior period expense, mine prospect charges, foreign exchange loss, disallowance of expenses claimed, Gujarat earthquake relief were raised by the revenue department which was partly accepted by the revenue department.

Conclusion

The major goal of the Indian Judiciary is social, political and economic justice to all of its citizens and this justice includes defeating the concept of biases as well. If one takes a look at the basis of the Indian Judiciary, it can be noted that it works on the presumption of innocence i.e. it is better that ten guilty persons go free than one innocent person suffer which means nothing wrong should be done with the people of this nation. 

Under the Income Tax Act, there come various instances where the question of how the calculation of the income tax has been done by the Assessing Officers comes into the picture. The assessee has the authority to challenge the amount of revenue calculated by the officers. Under such circumstances, the precedents given by the Court in various previous decisions turn out to be of great help. The precedents further help in understanding the basis of the law used in the case by the Courts and works as a good academic tool for others. 

Also, the above helps in preventing the biased and wrong assessments by the assessing officers as the precedents act as a rule of law to the others which should be followed strictly. Thus the previous judgments will help the cement manufacturing companies in avoiding wrong assessments and will further save them with the biasness of the Assessing Officers.

The post Judicial History of Income Tax and Cement Manufacturing Companies appeared first on iPleaders.

The article is written by Chetan Swaroop Monga. He is a partner at M/s Shelly Monga & Associates.

Introduction

Government of India has been making tremendous efforts in clearing backlogs/disputes/appeals under direct and indirect taxes which has resulted in the launched settlement schemes under Direct Tax (Vivaad Se Vishwas Scheme) & Indirect tax (Sabka Vishwas Scheme). On the similar lines, MCA i.e Ministry has come up with the scheme called Companies Fresh Start Scheme 2020 (also called CFSS -2020) vide its General Circular No. 12/2020 for one-time application of condonation of delay of filing the various forms, documents and returns.

Background of the Scheme

The Ministry of Corporate Affairs had been receiving various representations from various stakeholders requesting for a scheme wherein the defaulting companies may file the various returns, forms and documents without paying the additional fees on account of being late. The representations were analyzed and the MCA came up with the Companies Fresh Start Scheme 2020. There were large number of defaulting companies which were willing to file the required documents, forms and returns but were reluctant because of the hefty additional fees that they were required to pay for the belated /late filings. After the launch of this scheme companies will be motivated to make all the necessary compliances and start afresh. This is yet another welcome step and is receiving appreciation from various stakeholders.

As per the scheme, defaulting company means a company defined under the Companies Act 2013 and which has made a default in filing of any of the documents, statements, returns etc including annual statutory documents on the MCA 21 registry.

Details of the Scheme

CFSS-2020 will be effective from 1st April 2020 and will end on 30th September 2020 which means the companies have been given a period of 6 months approximately to be compliant once again without paying any additional fee for being late in filing the necessary documents, returns and forms. In a nutshell, defaulting companies shall be required to pay only normal fees as per Registration offices and Fees Rules 2014 and no additional fee will be payable of the documents, forms and returns.

In addition, this scheme gives an opportunity to inactive companies to get their companies declared as “dormant company” under section 455 of the Companies Act 2013 by filing e-form MSC-1 at a normal fee or apply for striking off the name of the company by filing e-form STK -2 at the prescribed fee.

The application for seeking immunity in respect of belated documents can be made electronically by filing form CFSS-2020 (this form can be filed without any fee) after the closure of the scheme (but not after the 6 months from the closure of the scheme) and after the documents, forms and returns are taken on file or on record or approved by the Designated Authority (Registrar of Companies).

Impact of filing CFSS-2020 will be that the designated authority shall withdraw the prosecutions before any courts and proceedings pending before adjudicating authority in respect of which the immunity has been granted by the designated authority(Registrar of Companies).

Some special cases

1. If the defaulting company has filed any appeal against any notice, complaint, order passed by court or by an adjudicating authority, it can file an application under this scheme for immunity certificate only after withdrawing such appeal and furnish proof of such withdrawal with the application (CFSS-2020).
2. Where due to delay of filing any document with the registrar, Order of penalties was imposed by an adjudicating officer and no appeal has been filled as on today then:

• Where the last date for filing appeal falls between 1.03.2020 to 31.05.2020 (both days included), a period of 120 additional days shall be allowed to file an appeal against Regional Director u/s 454(6), provided during such additional period no prosecution shall be initiated against the companies and its directors/officers.

Cases where this Scheme will not apply

• To companies against which action for final notice for striking off the name u/s 248 of Companies Act has already initiated by the designated authority (the RoC).
• Where an application had already been filled by the company for action of striking off the name of the company from the ROC.
• Companies which have amalgamated under a scheme of arrangement or compromise under the act.
• Where an application has already been filled for obtaining the status of Dormant Status.
• To vanishing companies (Vanishing Companies are those companies which had raised funds from public through initial public offers (IPOs) and subsequently failed to comply with the listing/ filing requirements of Registrar of Companies (ROC) and the Stock Exchanges for a period of two years and were not found at their registered office address at the time of inspection done by authorities / Stock Exchange).
• Forms related to increase in authorize capital (SH-7) and charge related documents (CHG-1, CHG-4, CHG-8 and CHG-9).

Other details

Under this scheme, a total of 62 forms will be allowed to be filed with MCA as follows:

• Under Companies Act 1956, 8 forms are allowed to be filed
• Under Companies Act 1956, 54 forms are allowed to be filed.

Details of these forms are now available at MCA home page (http://www.mca.gov.in/MinistryV2/homepage.html)

The Scheme does not absolve the Company or its Officers in Default from any substantial violation of law. The immunity is only with respect to the filing of the belated documents under the Scheme. Example filing of annual return and balance sheet under the scheme will give immunity with respect to the penalty for filing these belated documents. However, if the Annual General Meeting is not convened within the statutorily prescribed time, violation of section/ law for which prosecution or adjudication may be initiated. 

Conclusion

This is a really a pivotal move from the Ministry of Corporate Affairs where it is providing a chance of a lifetime to clear all the backlogs created by the companies and come out of the web and fear of non-compliances. It should be grabbed by the companies at the earliest and they should not even have an iota of doubt about it. Apart from that MCA also intends to clear all past non-compliances in filing of documents. This will give an opportunity to MCA to remove Inactive Company and update its records to monitor and govern few compliant companies only and that too with all updated documents. 

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Companies Fresh Start Scheme 2020 (CFSS -2020) appeared first on iPleaders.

This article is written by Disha Lohiya, a student pursuing B.A.LL.B. from National Law University, Jodhpur. In this article, she discusses the provisions related to Charge under Section 100 of Transfer of Property Act, 1882.

Introduction

Charge is a concept which is defined under Section 100 of Transfer of Property Act, 1882 [1] (hereinafter TPA) and its registration is covered under Companies Act, 2013. [2] A charge is an interest or a right which is created over an asset or a property. It can be either on immovable property like land or building or on movable property like a car, gold etc.

“Charge” as defined in TPA, 1882

Section 100 of the TPA, 1882 defines charge as, “Where immovable property of one person is by an act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge.

Nothing in this section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.” [3]

Essentials Of a Valid Charge

There are certain essentials which need to be fulfilled to create a valid charge.

Immovable property

• The charge must be created against an immovable property which can be a current or future property belonging to the borrower.

It is nothing but a device to create security which can be enforceable in court. [4] To create charge against immovable property, it is necessary that it should be in written form. [5] The most essential thing to be kept in mind is that there must be a clear intention to use the property as a security for the payment of the money. [6]

• A charge cannot be created if the immovable property is not owned by the person from whom the payment is due.

For example- A wife sought for the creation of a charge on house property in a maintenance suit. The court held that since the property was neither constructed nor owned by the husband, no charge can be created against such property. [7]

Does not amount to a Mortgage

• A charge is not a mortgage as there is no transfer of property nor any right is transferred but a personal obligation is created or a right to payment out of a specified property is generated. [8]
• It has been specifically mentioned in section 100 that a charge doesn’t amount to mortgage, although all the provisions which apply to a simple mortgage shall also be applicable to charge. [9] In simple mortgagee, the mortgagor is not required to give the possession of his property to the mortgagee. Under a mutual agreement, it is decided that if the mortgagee fails to pay the money within the prescribed time period, then the property can be sold as per the law. There is a transfer of an interest in the property in a simple mortgage, but there is no such transfer in a charge. Despite this difference, the section says that “The provision hereinbefore contained which apply to a simple mortgage shall, so far may be, apply to charge.”
• A charge is a wider term as it also includes a mortgage i.e. every mortgage is a charge but not every charge is a mortgage. [10] 

The Calcutta High Court held that:

“If an instrument is expressly stated to be a mortgage and gives the power of realization of the mortgage money by the sale of the mortgaged premises, it should be held to be a mortgage. The fact that the necessary formalities of due execution were wanting would not convert the mortgage into a charge. If, on the other hand, the instrument is not on the face of it a mortgage, but simply creates a lien, or directs the realization of money from a particular property, without reference to sale, it creates a charge.” [11]

The charge created by an act of parties 

• The parties themselves create a charge by entering into an agreement. No particular form of words or language is required to create a charge.

It will be sufficient to create a charge if it can be seen from the document that there is a clear intention to use the property as a security for the payment of the money, without transferring any interest or right in the property. [12] 

The remedy of the holder of the charge is against the property charged only. [13]

For example- A inherited a property from his grandmother. He receives a certain amount of rent from that property. Now on his own volition, he executed an agreement to pay a certain portion of the rent to B. B will have a charge over the said property.

In the said transaction A doesn’t owe any money to B nor does B have any right over the rent accruing from that property. But by entering into an agreement for payment of some amount to B, A by his own act has created a charge over the property which can be duly enforceable by B if A fails on his part.

Charges arising by operation of law

• A charge can also be created by the operation of law. It means the charge is created without the will or intention of the parties, but the law enforces them to comply with certain obligations.

For example- B made full payment of purchase money to A in advance. But A is neither transferring the property nor registering it in the name of B. A charge will be created by the operation of law over the said property in favour of B.

Exception

Section 100 provides two exceptions under which no charge can be created. They are as follows:

1. The charge which is created on an immovable property which is also a trust property in favour of a trustee for incurring expenses in the execution of his trust i.e. maintaining the trust property.

For example- A and B entered into an agreement for the transfer of a property with a condition that B will maintain A’s grandson C, from the rent occurring out of the said property until C turns 18. The expenses incurred by B will be a charge upon the trust property, but this charge cannot be enforced by selling the said property as it would lead to the destruction of the trust which is prohibited under Section 32 of Trust Act. [14]

B can only be reimbursed from the income coming out of such property and can stop any further disposition of the property until his expenses are paid.

2) A property upon which a charge had been created is brought by a person in consideration without having any notice of the said charge, then such charge cannot be enforced against him.

Types of Charge

Fixed Charge

• The charge is created over ascertainable assets i.e. land, building, machinery, goodwill, copyright etc.
• At the time of the creation of the charge, there is a clearly specified and defined property, the identity of which doesn’t change during the period of the loan.
• In such an arrangement, the borrower is only left with the possession of the asset and the lender has full control over the asset.
• The borrower doesn’t have the right to sell, transfer or dispose of and prior permission is required.
• There is an obligation to pay off the due amount first.

Floating Charge

• The charge is created over unascertainable assets i.e. assets, vehicles, debtors, etc.
• It is dynamic in nature i.e. the value and quantity fluctuate periodically.
• The borrower has the right to sell, transfer or dispose of and no prior permission is required.
• No obligation to pay off the due amount first.

Crystallization is a process in which the floating charge is converted into a fixed charge. It generally occurs when:

• The borrower defaults on payment and the lender takes action to recover the debt.
• At the time of winding up of the company.
• The company ceases to exist or carry on the business.
• Appointment of a receiver by court.

Registration of Charges 

Under section 77 of the Companies Act, 2013 every company creating a charge shall register the particulars of charge signed by the company and its charge-holder together with the instruments created. [15]

Therefore all types of charges are required to be registered in accordance with the Act, whether created within or outside India.

A company must file with the Registrar detailed information of the charge, along with the Charge Instrument or its authenticated copy, in respect of certain charges, within 30 days of the creation of a charge. If it is not filed, it shall be void as against the liquidator and any other creditor of the company. This does not, however, mean that the charge is altogether void and the debt is not recoverable. So long as the company does not go into liquidation, the charge is good and maybe enforced. [16]

Condonation of Delay

If the registrar is satisfied that the company had sufficient reason for not filing the details and instrument of charge within 30 days of the formation of such charge, then it can allow for such registration after 30 days but within 300 days after the creation of the charge. The request for extension shall be submitted in Form No. CHG-10 and shall be accompanied by a statement from the corporation signed by the secretary or director claiming that owing to such late filing, the rights of the intervening creditors of the company shall have no adverse impact. If the corporation fails to file the charge even during this three-hundred-day span, it may ask the Central Government to prolong the duration in compliance with Section 87.

Difference between Mortgage and Charges

A mortgage is a legal process whereby a person borrows money from another person and secures the repayment of the borrowed money and also the payment of interest at the agreed rate, by creating a right or charge in favour of the lender on his movable and/or immovable property. [17] 

According to Section 58 of the Transfer of Property Act, “A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.” [18]

While differentiating between charge and mortgage, the Supreme court in JK(Bombay) Private Ltd v New Kaiser-I-Hind Spinning and Weaving Co Ltd held that:

“While in the case of a charge, there is no transfer of an interest of property or any interest therein, but only the creation of a right of payment out of the specified property, a mortgage effectuates the transfer of property or an interest therein. No particular form of words is necessary to create a charge and all that is necessary is that there must be a clear intention to make a property security for payment of money in praesenti.” [19]

Conclusion

Hence, every mortgage is a charge but not every charge is a mortgage. A charge is an interest created over an immovable property for securing payment of the amount which is due to the party. The property is not transferred to the lender and only interest is created. It is neither a lien nor a mortgage but some properties of both are present in a charge. 

References

 [1] Section 100, Transfer of Property Act, 1882.

 [2] Section 77, Companies Act, 2013.

 [3] Supra, note 1.

 [4] Jnanendra Nath v Sashi Mulch AIR 1940 Cal 60, (1940) 44 Cal WN 240, 186 IC 333.

 [5] Mulla, The Transfer of Property Act 741 (10th Edition, LexisNexis Butterworths)2005.

 [6] Ray Chand v Basappa AIR 1941 Bom 71.

 [7] Vasantha v Chandran AIR 2002 Mad 214, p 216.

 [8] Gobinda Chandra v. Dwarka Nath,(1908) ILR 35 Cal 837(cited in https://shodhganga.inflibnet.ac.in/bitstream/10603/31643/13/13_chapter%205.pdf).

 [9] Mulla, The Transfer of Property Act 742 (10th Edition, LexisNexis Butterworths)2005.

 [10] Ibid.

 [11] Matlub Hasan v Mt Kalawati 147 IC 302, AIR 1933 All 934.

 [12] Ray Chand v Basappa AIR 1941 Bom 71.

 [13] Mulla, The Transfer of Property Act 741 (10th Edition, LexisNexis Butterworths)2005.

 [14] Section 32, Trust Act,1882.

 [15] Section 77 of the Companies Act, 2013.

 [16] Ibid.

 [17] Debi Singh And Ors. vs Jagdish Saran Singh AIR 1952 All 716.

 [18] Section 58, Transfer of Property Act, 1882.

 [19] JK(Bombay) Private Ltd v New Kaiser-I-Hind Spinning and Weaving Co Ltd, 1970 AIR 1041.

The post Charge under Section 100 of the Transfer of Property Act, 1882 appeared first on iPleaders.

This article has been written by Nivrati Gupta, a student at Nirma University, Ahmedabad. In this article, she introduces and provides insights into the concept of Additional Dispute Resolution.

Introduction

A democratic country has an inevitable requirement of continuously advancing, making continuous variations in the policies and law and making efforts to make it a more socially politically and economically developed state. A major pillar of democracy is the judicial body which holds a powerful stand in achieving the above. Traditional courts were made to solve disputes between the people and safeguard the constitution. But with time and gradual increase in population the disputes on civil and criminal matters also started burdening the courts with abundant cases. With the recent introduction of information technology, the burden has furthermore increased. The fact that a large number of these cases which the traditional courts deal with are on very trivial issues which are also not to be ignored because of these matters worth hearing get piling up. The vast case log that is pending in the courts the government and judicial committees recommended alternate methods of dispute resolution (ADR) via Mediation and Negotiations. 

In this modern era where courts all around the world are burdened with cases and file loads, ADR is a widely accepted alternative to resolve disputes which may be regarding divorce, tax or commercial disputes like merger and acquisition or a dispute which involve a disagreement between parties and many people are turning towards these dispute resolution methods to resolve before acquisition disputes. The procedure taken to resolve disputes here is affordable, less procedural, less time consuming, the promise of confidentiality and gives more control to the individuals involved in the dispute and yields more efficient results. Many Jurists have preferred and advocated for ADR as a post-proceedings resolve settling mechanism. ADR is also being used more frequently in commercial and company based disputes. 

Concept

Additional Dispute Resolution (ADR) also known by the name External Dispute Resolution. It is a method that encompasses numerous methods and techniques aimed to resolve disputes. It has been practised since traditional times. The main aim and the technique around which this dispute resolution work is to use a less intricate procedure that around which the judicial courts work. 

ADR includes direct negotiations, outside judicial settlements, arbitration, mediation, informal and formal tribunals, and mini-trials. All these might be binding, non-binding or advisory in nature. Nature here may be dependent upon that respective country jurisdiction and the legalization of Additional Dispute Resolution committees. 

Objectives of ADR 

• Affordable and speedy trials with less procedural work. 
• Aims to settle the disagreement peacefully by way of compromise, negotiation or fair settlements.
• Uses a direct approach to settle the dispute– one to one conversations and rigorous discussions to give a better understanding of each party’s view. 
• Explanatory in nature- gives in-depth information about the judicial policies and rules without being binding on the party. 
• Works on the principle of diplomacy- win-win for both parties. 
• Communication is the key- the more the parties at dispute communicate the more it increases the chances of coming to a mutually agreeable point. 
• Maintaining confidentiality– Keeping the information and dispute classified and inside the organization. 
• Creating pre-dispute guidelines and rules to save from future issues and give a systematic framework. 
• The most important aim- avoid judicial proceedings and trials.

The Supreme court of India has also in many instances emphasized the need of ADR: In one case M/s Guru Nanak Foundation Vs M/s, Rattan Singh & Sons. 

“Interminable, time consuming, complex and expensive Court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to Arbitration Act, 1940 (Act for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceeding under the Act has become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with ‘legalese’ of unforeseeable complexity.” [1] 

Modes of Additional Dispute Resolution 

Mediation 

Mediation in eased negotiation, the decision of the mediator is not binding. There are basically three parties in a mediation, a mediator, who practices neutral interest in the subject matter of the dispute or party and the two parties in dispute. The mediator holds no judicial authority and decision-making power; his mere role is to show a broad view and come up with a favourable solution to help the party come to a mutually acceptable approach. It is a process that comes into place when both parties consent to such a resolution mechanism and are committed to the decision or agreement settled upon.

The process involves coming together of the parties for a joint session, where the guidelines of the mediation which include- a confidentiality clause are explained to the parties. The guidelines and rules are not rigid and can be changed on the consent of both parties. In the next step, the parties explain their position and dispute, later the mediator holds a confidential and one to one conversation. This helps the mediator to come up with a more mutually agreeable settlement. Mediations hold a good success ratio because first, they are very cost-effective, though the agreement done here is not binding in nature but can the contract be legal and can be enforced like any other contract. Second mediation is not a lose-win situation, even if the parties till the end of the mediation do not come in agreeable terms the doors of traditional litigation are always open. 

Negotiation

Any assembly of two or more parties aimed to reach a mutually intended beneficial settlement is negotiation. It can be held either between the parties or the parties and counsel. Negotiation is a part of Additional Dispute Resolution as well as a part of litigation. In negotiation the third party roles do not involve much communication with the parties nor do they have any authority to impose a resolution. Negotiation is the first informal stage to resolve a conflict, it involves identifying the problem and interests. A negotiation is only successful when the solution is a win-win for both parties and both parties feel they are having an upper hand. In negotiation, if there is a third party it is very important for the negotiator to be well collected with all the facts and fixes of both the parties. A Negotiation won’t be successful if either of the parties feels like they are not in their intractable position. 

Mini-Trials 

Mini-trials can be said as the last institution in a dispute resolution mechanism. It is held after all the facts and circumstances are laid clear. Mini- trials are pliable in nature and basic litigation rules are set. Strengths and weak points are again analyzed and each party is being represented by their respective counsels unlike in negotiation and mediation. Here a third party a mediator acts as a counsellor or advisor. After all the discussions with the disputed parties, the advisor rules a decision which is also non-binding but prompts the disputed parties to call for a further mutually agreeable resolution. The main purpose of having a Mini- trial is giving the parties a chance to sit on an outside legal dispute resolution committee and come up with a more economically and time-efficient resolution or mutual settlement. 

Arbitration

Arbitration is a dispute resolution mechanism in which the disputed parties choose and a neutral and independent arbitrator, the arbitrator can be a person or an institution. The dispute may be an ongoing one or which may arise in the future course of time. It is agreed upon prior to the arbitration that any decision given by the arbitrator shall be binding in nature and shall be abided upon but also will not be mandatory. Here the parties can either submit their resolutions or dispute before the dispute arises, to prevent future complications or also after the dispute has arisen. Arbitration is in many ways similar to that of the judicial courts. Rules and provisions to be followed upon are decided beforehand. The Arbitration Law is a recognized approach and the procedural system is not less than that of the traditional courts. 

Arbitration is also of two forms private and judicial arbitration. Amongst which in ADR, private arbitration is the most widely used. Prior agreements are made in private arbitration where future disputes that may arise will be governed under the said agreement and the parties decide to keep matters falling under the decision criteria to be treated outside the court via private arbitration. The most use of this arbitration is done for company and labour regarding issues. Judicial arbitration is the one followed by our traditional courts which are mandated and given power under the respective regulations and rules. It follows state and federal law. Arbitration is a flexible means of dispute resolution that allows the parties to impose and create a formulated structure to address issues and disputes. The arbitrator practices wide powers to come to a mutually beneficial relief. The awards that may be granted by the arbitrator is an award which is procured by misconduct or corruption or one owned by fraud. 

The various procedures that fall under Additional Dispute Resolution have been discussed above. 

The Base of Additional Dispute Resolution 

Bona Fide Intention

Through the course of ADR methodology, the different alternative methods are structured to work within an adversarial context. If the parties negotiate in a competitive adversarial mode or a constructive problem-solving mode, both can be used. The most cooperative ADR procedures will be strengthened by a duty to bargain in good faith on the participants. This does not mean an obligation on parties to behave against their best interests. The parties are duty-bound to conduct fair and effective negotiations. When the talks are conducted with mutual self-interest and the interests of another are ignored, the parties will not be in a position to negotiate a satisfactory settlement. Nevertheless, the proceedings under the ADR Process Mechanism, the procedure used and the procedures applied are always carried out honestly in good faith and without prejudice to any of the parties. The ADR Program Mechanism has the power to permanently resolve the dispute.

Third-Party Roles 

The ADR method consists of different approaches such as conciliation, negotiation or mediation, which is often carried out with the help of a third party who is either appointed as conciliator, mediator or negotiator. The third-party Mediator is committed to resolving their dispute with disputants with the laudable property. He has the opportunity to consider the complexity of the dispute and provide fair incentives for the parties to represent their cases effectively. He also gives them careful hearing and is able to control impulses during conciliation, given an unpleasant situation. Third-party Mediator is committed to settling their dispute with laudable land disputants. He has the ability to consider the nature of the conflict and provide equal incentives for the parties to best represent their cases. He also allows them effective listening, and, in an adverse situation, is able to control impulses during conciliation. 

Legal History of ADR in India 

Alternate dispute resolution was acknowledged after the coming of British’s, after the formation of Bengal Regulations of 1772 and 1781 which recognized non-traditional court dispute resolution committees and provided the allowance of submission of disputes via arbitrator. 

Then later Arbitration Act VIII, 1857 came into place which codified the procedure followed by courts. In this Act, sections 312 to 325 dealt with suits coming via arbitration which acknowledged the ADR committee without the involvement of the civil courts. The Arbitration Act of 1889 which was a born of the English Arbitration Act of 1889 was the first pillar law. Arbitration Act 1940 replaced the act of 1889 and had ADR regarding provisions in Section 104 of the IInd Schedule of Code of Civil Procedure 1908. 

In India, Lok Adalats are also a subject of ADR. They were given statutory authority in 1987 which came into 1995. The Arbitration Act was replaced by the Arbitration Act, 1996. 

Application of Section 89 and Order X Rules 1A, 1B and 1C by way of the 1999 amendment to the Code of Civil Procedure, 1908 is a revolutionary step forward taken by the Indian Parliament in implementing the ‘Court Referred Alternative Dispute Resolution’ method. Section 8 of the Arbitration and Conciliation Act, 1996 is of a peremptory sort. It is mandatory for the court to refer the case for alternative dispute settlement in India if all the proof is proved and there is an arbitration arrangement and the parties have, however, submitted an application before the first declaration on the nature of the dispute is made. It is solely the court’s discretion whether to refer the case in India for arbitration or for other alternative dispute resolution or electronic dispute resolution.

Existing Online ADR Services

– Ombuds Office 

– World Intellectual Property Organization (WIPO)

Conclusion

The whole process and mechanism of Additional Dispute Resolution consist of numerous techniques as discussed above – Mediation, Mini-trials, Arbitration, Negotiations and Lok Adalats in some parts. 

ADR has proved to be a very effective and time-saving process and a substitute for the traditional courts for specific matters like company and labour. The ADR does not aim to replace the working of judicial courts but to divide the burden of the shoulders off the courts with handling the trivial and settlement issues with also being a pocket-friendly solution. It works on the platform of justice, impartiality, good faith, and confidentiality. 

But despite all the success of the ADR it is important to remember that it is not a substitute for every legal dispute. Many people organizations are still resisting ADR because the substantive, procedural, and evidence-based protections provided in informal civil litigation are missing. If a claimant claims that by waiving the formalities of civil procedure, one will lose so many rights and privileges, ADR may not be the correct tool for settling conflicts that involve violation of rights or matters related to crimes. 

References

•  M/s Guru Nanak Foundation Vs M/s Rattan Singh & Sons, A.I.R 1981 SC p-2075 at 2076.

The post Introduction to the concepts of Additional Dispute Resolution  appeared first on iPleaders.

This article is written by Stuti Modi, from Jindal Global Law School, Sonipat.

Introduction

Good faith is one of the most powerful General Principles of law, overarching an entire legal order. It ensures international legal order in a phase where Customary or Treaty law is not yet shaped. Article 38 (1) (c) of the ICJ Statute directs that the Court “shall apply the general principles of law recognized by civilized nations.” The nature of good faith as an overarching legal principle makes it difficult to define in absolute terms.[1] Hence, the aim of this paper shall not be an attempt to define it but rather to describe and exemplify its place in international law.

Good faith in various subject areas of Public International Law

Good Faith in Sources of Law

• Treaties

As held by the ICJ in the Nuclear Test Case “One of the basic principles governing the creation and performance of legal obligations is good faith. Trust and confidence are inherent in international cooperation, in particular in an age when this cooperation in many fields is becoming increasingly essential. Just as the very rule of pacta sunt servanda in the law of treaties is based on good faith, so also is the binding character of an international obligation. Thus, interested States may take cognisance of unilateral declarations and place confidence in them, and are entitled to require that the obligation thus created be respected.”[2] Hence, based on good faith, the ICJ has found that that a State can be bound by a unilateral act alone like a public statement made by a State, with an intention to be bound, can create legal obligations, which could otherwise only be created through a treaty, by imposing the legal maxim of pacta sunt servanda.

Moreover, Article 18 of the VCLT of 1969 reads as follows: A State is obliged to refrain from acts which would defeat the object and purpose of a treaty when: (a) it has signed the treaty or has exchanged instruments constituting the treaty subject to ratification, acceptance or approval, until it shall have made its intention clear not to become a party to the treaty; or (b) it has expressed its consent to be bound by the treaty, pending the entry into force of the treaty and provided that such entry into force is not unduly delayed. It facilitates creation of a bond of trust among the concerned states, such that no one of these states, in a disloyal manner attempt to defeat the object and purpose of the treaty while it is not yet in force and thus not yet legally executory. It imposes a duty upon the state to formally notify that it renounces ratification to the treaty incase the State does not want to participate any more to the treaty it has signed but not yet ratified. Furthermore, good faith is adhered to by ensuring protection of legitimate expectation of a minimally loyal behavior along with protection of the object and purpose of a transaction against frustration by unilateral acts of some state is ensured.

In addition, Principle of estoppel forbids a state which has applied a treaty for a prolonged time-span and thereby created legitimate expectations that it considers the treaty applicable and also reaped advantages from the application of the treaty; to plead at its discretion that the treaty had not been validly ratified. As can be seen, good faith as protection of legitimate expectations operates here as a sort of substitute principle of effectiveness by recognizing ‘ratification by conduct’.[3]

Furthermore, Article 45 of VCLT concerning Good Faith and the Loss of the Right to Claim the Invalidity of a Treaty, deals with applying estoppel or acquiescence, in order to protect legitimate expectations and treaty stability. Real intention is not necessary when state behaves in a certain way, they are considered by the virtue of good faith to be bound and acceptance is thus objectively imputed, if at all. Legally, this can manifestly be called acceptance. This is supported by a legal maxim that a state should not benefit from its own contradictory behavior.[4] Acquiescence to maintaining a treaty has been applied under customary international law a long time before its codification in Article 45 of VCLT.

The two main aspects while Interpreting Treaty are: (i) The primacy of the spirit of the treaty over an excessive attachment to the black-letter wording; and (ii) the search for a reasonable interpretation, in the sense of what an honest and reasonable party could and should have understood with regard to the text as it has been adopted.[5] These aspects are in line with principles of good faith and prevents exploitation of parties to a treaty.

There are certain legal norms flowing from good faith which impose obligations on the treaty parties in the Execution Phase. These duties extend beyond the mere interpretative aspects mentioned above. There are different types of duties including the General Duty of Cooperation,[6] The Duty not to Defeat the Object and Purpose of the Treaty after its Entry into Force[7] and the Obligations of Rectitude.[8]

• Customary International Law

In the continuous process of demand and response, normative patters emerge through the creation of legitimate expectations as to future conduct, and thus through legal instruments such as reliance, acquiescence or estoppel. Ultimately, all these institutions are rooted in the doctrine of good faith as the depositary of the Reasonable Expectation Doctrine. However, the reasonable expectations theory, cannot purport to provide a sufficient explanation for the formation of all customary rules. This is manifest for the axiomatic customary rules at the apex of the system (pacta sunt servanda); but it is also true for a series of other rules, like customary rules hardening into existence in the course of a formal codification process. The formation of customary law is too multi-faceted and complex a process to be caught up in one-size-fits-all.

Good Faith in Jurisdiction of States

Jurisdiction or competence is a legally recognized power or duty to do something which has been reiterated in Island of Palmas case (1928), where the rights conferred by sovereignty are matched by the duty to protect the rights of other states in the territory where that state enjoys its sovereignty.[9] There are several issues with regard to the creation and loss of jurisdiction, which are based on, or at least trigger, considerations of good faith. Some of them flow from the notion of reliance on good faith (legitimate expectations), as is the case of ‘acquisitive prescription’. While others flow from the necessary link between the exercise of a competence and the aims for which it was granted, as in the notion on abuse of rights. In other words, good faith displays two main functions in the context of competences, that is, the protection of legitimate expectations and the protection of aims and purposes.

Good Faith in Law of International Organizations

• Article 2, § 2 of the UN Charter

According to the letter of article 2, § 2, the Members undertake to ‘fulfil in good faith the obligations assumed by them in accordance with the present Charter’, and this with a certain aim being ‘in order to ensure to all of them the rights and benefits resulting from membership’. It becomes more understandable if one considers that the obligation of good faith reflects customary international law. Moreover, other subjects than states are also bound by this principle. Thus, good faith is a principle from which duties flow for all the organs of the UN.[10] The principle of good faith allows the organs of the organisation the shaping of flexible duties and expectations with regard to member states in an attempt to find solutions to major or minor issues of contention, and sometimes even to major constitutional crises.[11]

• International Administrative Law

The protection of staff members of international organisations has produced an important branch of international law, called administrative international law. As was stated by the Court of Justice of the European Communities in the Lachmüller case of 1960, the principle of good faith dominates the contractual relationships between the organization and the staff member.[12] We therefore find all typical aspects of public law good faith in this area of international jurisprudence namely the protection of legitimate expectations, the consequences flowing from acquiescence and estoppel, the prohibition of abuse and arbitrary action and the prohibition of misuse of authority.

• International Commercial and WTO law

Commercial law is heavily dependent on notions of legal certainty and confidence between the contracting parties. No one engages into investments and commerce without some guarantees on the foreseeability of action and on concomitant protection of his economic interests. Thus, well before the WTO was created, international commercial law and arbitration practice relied on the principle of good faith.[13] The principle of good faith has founded in this subject area the various rules such as the doctrine of legitimate expectations; doctrine of abuse of rights; estoppel; pre-contractual duties; in analogy to article 18 VCLT, 1969; the duty to negotiate in good faith gave rise to similar concretizations as in general international law. Good Faith also directs the interpretation and execution of contracts; as well as the withdrawal from contracts; there is a good faith duty to attempt to mitigate the amount of damage suffered through an unlawful act by taking reasonable measures. Moreover, a party is not allowed to profit from its own wrong. There exists duty to cooperate to the administration of evidence in arbitral procedure and the parties shall not undertake acts that aggravate the dispute or prospectively hamper the execution of the final judgment.

Good Faith in the Law of International Responsibility

It has been claimed that the whole law of international responsibility is but a manifestation of the principle of good faith taken as an expression of pacta sunt servanda and obligatio est servanda.[14] This is an extremely broad statement and if followed, it could be said that the whole legal order based on agreements and practice is ultimately but an expression of the principle of good faith. However, there are certain principles on which the responsibility relies-

1. Ultra Vires Responsibility- The criterion of reliance on good faith is dependent upon the criterion of action in ‘capacity’. But the solution finally chosen is not based entirely upon that principle. Other aspects than simple apparent authority is taken into consideration for deciding whether an agent or organ acted in ostensible authority.
2. Exceptions to the Exhaustion of Local Remedies Rule- The exceptions to the rule of Exhaustion of Local Remedies is based on the conception of good faith. The three exceptions include Inexistence or Lack of Effectiveness of the Local Remedies, Official Assurances on the Availability of Local Remedies and other situations of Estoppel.
3. Clean Hands Doctrine- The doctrine of clean hands has considerably declined in the modern case law. The ICJ has for itself refused to apply this doctrine outside the context of diplomatic protection, for example when the US claimed that a case brought by Nicaragua and leading to two judgments of 1984 and 1986 should have been declared inadmissible on account of the ‘dirty hands’ or ‘unclean hands’ of Nicaragua.[15]

Good Faith in the Law on the Peaceful Settlement of International Disputes

The law for the peaceful settlement of international disputes rests on two pillars being the principle of cooperation and the principle of consent. The principle of cooperation is concerned since the attempt at settlement gives rise to some extent to a common process, like a judicial procedure, which can be a success only if there is a minimum of loyalty and coordinated effort. The principle of consent is relevant since all the means for settling international disputes rest ultimately on the acceptance of the states involved. In both contexts, the principle of good faith plays a major role: in the context of cooperation for the protection of the common finalities in the process; in the context of consent as a limitation on the true will of a subject in favor of considering the objective meaning of a certain conduct and what other subjects could and should have expected on the basis of such conduct. Thus, as has been said, the principle of good faith dominates the subject area of the pacific settlement of international disputes. This is facilitated by ‘negotiations in good faith’, Provisional Measures by ways of pendente lite, prohibition of abuse of procedure, Prospective Overruling, Execution of Arbitral and Judicial Awards.   

Good Faith in the International Law of Investments

• Protection of Legitimate Expectations (PLE)

Its formal basis is the principle of good faith and the Fair and Equitable Treatment (FET) clause, or an analogy to common principles of municipal administrative laws. The principle of PLE has been applied mainly in three contexts being Contractual Arrangements, Informal or Formal Representations and General Regulatory Framework under Municipal Law.

• Prohibition of Abuse of Procedure

The principle of abuse of procedure applies to the cases where the investor restructures his assets by the creation of new corporations, by acquiring a new corporate nationality which allows the application of a Bilateral Investment Treaty (BIT)[16] with the sole aim of getting access to arbitration. If a purportedly new claim is substantially the same as a previous one and is resubmitted under some circumventing legal constructions (transfer of the claim to another entity), it will be dismissed under abuse of procedure.

Good Faith in the Law of Armed Conflicts

Good Faith along with playing a significant role in the law of peace, also contributes significantly to the law of armed conflict. The main provision on perfidy is today article 37 of Additional Protocol I of 1977 to the four Geneva Conventions of 1949. By the said provision, it is prohibited to kill, injure or capture an adversary by resort to perfidy. Moreover, acts inviting the confidence of an adversary to lead him to believe that he is entitled to, or is obliged to accord, protection under the rules of international law applicable in armed conflict, with intent to betray that confidence, shall constitute perfidy. Good faith has to play an essential role in this context too.

The Interrelation of Good Faith with Sovereignty

The principle of internal sovereignty has been understood as the supreme authority of a State within its territory;[17] while the external sovereignty is the dimension that pertains to the international rights and duties of a State in relation to other States. In 1927, the PCIJ developed the Lotus principle,[18] which stated that good faith elements to a State’s conduct has a limiting effect on its external sovereignty. Accordingly, a state might have its supreme authority or sovereignty limited when aspects of good faith come into play, and these aspects necessitate behavior that contravenes what a state might otherwise want to do.

Conclusion

From the above discussion, it can be safely inferred that the main function of good faith includes protection of the legitimate expectations of the subjects of law and search for stability, legal certainty and foreseeability and protection of the object and purpose of legal processes against excessive unilateral action jeopardizing the common processes and interest. The principle further prohibits abusive and arbitrary action, notably the use of legal entitlements for aims and purposes alien to their grant and harmful to others or to the collectivity at large. As international law becomes more fragmented and dispersed in ‘self-contained’ regimes, the role of good faith will extend and create more permutations of this limitation, as, fundamentally, good faith acts to give legal value to the expectations that States have in the actions of other States. Good faith might therefore not be readily definable in abstract terms, it is however indispensable.

References

[1] William Tetley, ‘Good Faith in Contract: Particularly in the Contracts of Arbitration and Chartering’ (2004) 35 J Mar L & Com 561, 563.

[2] Nuclear Tests Case I.C.J. Reports (1974), p. 253 para 46.

[3] Military and Paramilitary Activities in and Against Nicaragua (Jurisdiction and Admissibility) (1984) ICJ Reports 413 – 15.

[4] Vienna Convention on the Law of Treaties, A Commentary (Berlin, 2012) 765.

[5] North Atlantic Coast Fisheries (1910) XI RIAA 187, 188. 

[6] Rainbow Warrior Case (1990) 20 RIAA 215.

[7] Military and Paramilitary Activities in and Against Nicaragua (Merits) (1986) ICJ Reports 135ff. 

[8] Fisheries Jurisdiction (UK v Iceland, Jurisdiction) (1973) ICJ Reports 15– 16,  § 28 – 29.

[9] Island of Palmas (1928) II RIAA 839.

[10] A Verdross and B Simma, Universelles V ö lkerrecht, 3rd edn (Berlin, 1984) 47.

[11] Kolb Rober, Good Faith in the Law on the Peaceful Settlement of International Disputes, (1^st edn, 2017).

[12] CF Amerasinghe, The Law of the International Civil Service, vol II (Oxford, 1988) 682.

[13] Palbalk Ticaret v Norsolor (1979) 29 Revue de l ’arbitrage 530.

[14] Lukashuk,  ‘Introduction’, in M Bedjaoui (ed),  Droit international— Bilan et perspectives, vol I (Paris, 1991) 320.   

[15] Military and Paramilitary Activities in and Against Nicaragua (Merits) (1986) ICJ Reports 392ff. 

[16] Phoenix v Czech Republic (2009) ICSID/ARB/06/6.

[17] Customs Regime between Germany and Austria (Advisory Opinion) [1931] PCIJ Rep Series A/B 57.

[18] The Case of the SS Lotus (France v Turkey) (Judgment) [1927] PCIJ Ser A No 10 4.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Principle of Good Faith in International Law appeared first on iPleaders.

“This article is written by Jasmine Madaan, from Vivekananda Institute of Professional Studies (VIPS). This is an exhaustive article which describes the various places where one can complain against people who are illegally violating a curfew or lockdown.”

Introduction

The downhearted truth is that breaking the law isn’t something new for India. Now more than ever it is important for people to understand that a lockdown is to prevent them and the country from getting trapped into the horrendous arms of coronavirus. Yet if you find someone violating the lockdown or curfew then what should you do as a responsible citizen? To whom should one complain? This article will provide answers to these questions.

Where can I complain against a person who is illegally violating a curfew or lockdown?

Firstly, it is important to know the difference between a lockdown and a curfew. In a lockdown, four or more than four people are not allowed to gather in the lockdown area whereas in a curfew, people are not allowed to come out of their houses for a specific duration of time. Essential commodities can be availed in a curfew only during a particular time specified by the government whereas in lockdown it can be availed anytime without clustering. Punishment level is graver in case of violation of curfew than a lockdown.

Click Here

Police

Police are the most essential team to ensure enforcement of law and order in the country. It is seen that police are continuously persuading people to confine themselves within their homes as it is their duty to maintain peace and protect the citizens of the country. One can report to the police about the violation of the lockdown or curfew. The All India helpline number of police is ‘100’. ‘112’ is the National Emergency Number. Different states have their own helpline numbers as well. One can either complain by calling the helpline number, writing an email to the respective email IDs of the state’s police or by sending a message, video or photograph on WhatsApp. Here is a list of helpline numbers of the different states or Union Territories released by the Ministry of Home Affairs on April 2, 2020:

The list of contact details of police of few States is given below:

• Delhi police:  Helpline number for COVID-19- 011-23469526 (24×7), Email ID- covid19-helpdesk@delhipolice.gov.in
• Maharashtra police(headquartered at Mumbai)- One can provide the information on CCTNS. Control room helpline number: 22822631/ 22026636/ 22026680; WhatsApp number: 7506777100/ 7506888100
• UP Police- WhatsApp number: 7570000100 
• Punjab Police

Similarly, one can find the contact details of other States’ police on Google.

But the question arises: what happens after booking them for violation of lockdown?

Section 144 of the Code of Criminal Procedure does not allow gathering of four or more people in the restricted area which is at present, the whole country. This Section empowers the administration specifically a magistrate, sub-divisional magistrate, or any other executive magistrate to impose it. It can be imposed for two months but if the normalcy is still not restored then it can be extended maximum to six months. One cannot organise or attend any mob protests and marches etc. One can’t wander on the roads. The Section also restricts carrying any sort of weapon in the restricted area. Violators of the lockdown can be booked for “engaging in the rioting”. Police can detain the violators. The maximum punishment for violating the lockdown i.e. section 144 is imprisonment for three years. 

Section 188 of the Indian Penal Code provides that if anyone violates the order promulgated by a public servant then the police have the power to arrest the violator. If disobedience causes or tends to cause any- 

• Obstruction;
• Annoyance or injury;
• Risk of obstruction;
• Risk of annoyance or injury;

To any person who is lawfully employed, then the violator can be punished with simple imprisonment for a term which may extend to one month or fine or both. The fine cannot exceed Rs. 200.

Section 188 of the Indian Penal Code also provides that if the disobedience causes or tends to cause: 

• danger to human life;
• danger to health; or 
• danger to safety;
• Riot or affray

He shall be punished with imprisonment, fine, or both. Imprisonment can extend to six months and fine to Rs. 1000.

Due to the pandemic, if anyone is seen wandering off on the streets, he/she can be booked under Section 270 of the Indian Penal Code. The Section provides that if anyone is found malignantly doing an act, or knows or believes such act to be likely to spread any dangerous disease to life or infection, shall be punished with imprisonment that may extend to two years or fine, or both. One can be jailed without bail.

Since the whole world is following the principle of social distancing, it is not a smart move to put people in jails therefore police is nowadays opting various different methods to punish the violators:

• People are being punished to do sit-ups while holding their ears.
• Being given a stern warning 
• Police are using lathi charge
• Detaining the vehicles of the violators
• In some parts of India, policemen were seen giving roses to the violators to request them to stay at home
• Police are making people apologize to society by clicking them while making them hold a paper on which it was written ‘I am an enemy of the nation because I will not stay at home’
• Police are also imposing fines or arresting people who are found on the roads without any valid purpose.

We all know that police can take measures to stop people from violating the lockdown but the law does not authorize police to use unnecessary physical force on people. Even during the first few days of the lockdown, the e-commerce delivery boys were beaten up by the police. Need it to be reminded that at various places while punishing, the rule of social distancing is not being followed at all. The act of police to evacuate protestors at Shaheen Bagh was a part of their duty keeping in mind the overall national public interest. In the previous days, social media has been flooded with posts of police’s brutality against violators. Two deaths of civilians, one of an ambulance driver in Pune and another of a resident of West Bengal, has alarmed the situation. Many journalists, politicians, celebrities, and others have posted on social media about the brutal acts of police and pleaded to the government to take action against such behaviour or at least stop this from happening.  

If somebody who has already tested positive for coronavirus or someone who is a suspected case under quarantine violates it, he can be punished under Section 271 of the Indian Penal Code. Under this section, a person can be punished with imprisonment for a maximum of six months, or fine, or both.  

The situation during a curfew is a little different. People are not allowed to even get out of their houses except during the relaxation time set by the government. The punishment is severe for its violation and can lead to immediate detention, in some cases even shoot at sight.

Other authorities

One can also reach out to the state authorities who are responsible for ensuring the proper implementation of the lockdown or curfew. It includes state governmental or quasi-governmental bodies. One can either contact them via email or on social media. A recent article of the Economic times states that army troops are being prepared in case they are called to manage the lockdown situation in the country. If this happens, then one can also complain to them.

Social media

Social media is considered to be the strongest tool of the 21st century. One can just sit at their home and communicate with the whole world and can raise their voice against the wrong. Over the past few days, social media platforms are flooding with posts related to the lockdown due to COVID-19. 

It is important to note that social media can be used as an effective platform to complain about the violators of the lockdown or curfew. One can post the picture, video or in writing about the place where the violation is being done, the time and the number of people. Twitter, Instagram, Facebook, etc. can be used to report about the violators. While posting on these platforms it is important to tag the authorities i.e. the police of the state, government of the state, action team, and government of India. One can easily search for their official Twitter, Instagram and Facebook handle. 

More than ever, the world is going digital these days. A recent example of this is- In Surat, a total of 28 people were nabbed by the Surat police for violation of the lockdown with the help of social media. They were able to resolve 15 complaints made by people on their Facebook page. People had sent pictures along with the location of the violators on the twitter and Facebook pages of the local police. Many people have also complained about people who are still going to the gyms even when they are shut.

Conclusion

When you ignore someone violating the law, you are also at fault for not stopping that person. It is not important to do it yourself but one can definitely approach the competent authorities via different modes available. Use your voice to protect yourself, your family, your nation and the world. Before complaining just make sure of the fact that it is a violation indeed and that the person seen on the roads is not there for a valid reason. Let us not forget that ‘We stand stronger together’.

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 Where can I complain against a person who is illegally violating a Curfew or Lockdown? appeared first on iPleaders.

So today is the day! We are finally announcing the winner of our Blog Writing Competition of the 1st week of March 2020 (From 9th March 2020 To 15th March 2020). 

We’d like to say a big thanks to everyone for participating! It has been a great pleasure receiving your articles on a different legal topic, they were all amazing! 

And now we’d like to congratulate our top 5 contestants who become the undoubted winners. They will receive Prize money of Rs 2000, LawSikho store credits worth Rs. 1000 and a Certificate of Merit from team LawSikho.

They will also get an opportunity to intern at LawSikho under the direct mentorship of Ramanuj Mukherjee, Abhyuday Agarwal, Harsh Jain and Komal Shah. Their articles got published on iPleaders blog (India’s largest legal blog). Click here to see other perks available to them.

Their entries (see below) received maximum marks based on the average marks given by the panel of editors, and has been crowned the winners!

Meet our next 5 contestants who made it to top 10 here. They will receive a Certificate of Excellence from team LawSikho.

They will also get an opportunity to intern at LawSikho under the direct mentorship of Ramanuj Mukherjee, Abhyuday Agarwal, Harsh Jain and Komal Shah. Their articles got published on iPleaders blog (India’s largest legal blog). Click here to see other perks available to them.

Click here to see all of the contest entries. Click here to see our previous week’s winners.

Our panel of judges, which included editors of iPleaders blog and LawSikho team, choose the winning entry based on how well it exemplified the entry requirements.

The contestants have to claim their prize money by sending their account details at uzair@ipleaders.in within 1 month (30 days) of the date of declaration of results and not afterwards. Certificates will be sent on the email address given by the contestant while submitting the article. For any other queries feel free to contact Uzair at 8439572315 LawSikho credits can be claimed within three months from the date of declaration of the results (after which credits will expire).

Congratulations all the participants!

Regards,

Team LawSikho

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Blog Competition Winner Announcement (Week 2nd March 2020) appeared first on iPleaders.

Introduction

The spread of fake news has caused economic and political instability in specific regions. Some people create and spread false information to ruin the reputation of other people and organizations. Millions of web users get information from various social media platforms. Some governments have created laws to control the spread of fake news on social media. Read on to learn more about it.

The Specter of Overreach

India, the Philippines, and Myanmar started regulating online content after misinformation started causing tension and political unrest. It is difficult for social media platforms to regulate fake news without getting support from governments. They advocate for free speech and open internet. For example, Mark Zuckerberg talked about the coronavirus outbreak earlier this month. He stated that Facebook is committed to removing conspiracy theories and false claims.

Chinatown, Singapore has few people in recent days due to the COVID-19 outbreak. Critics claim that some countries are using the outbreak to justify their legislation. Instead, they should address misinformation through other ways without limiting free speech.

The Government of Singapore is deliberating on creating a law that will target fake news in encrypted applications like WhatsApp. Tech firms cannot read messages although the law covers social media platforms. The new law allows state ministers to determine fake news and instruct social media sites to remove misinformation that threatens the integrity of elections, the public’s view of the government and security threats.

Discriminating Unjustifiable and Justifiable Content

Some people believe that creating laws against fake news is a challenge to nations that lack freedom of speech and electoral integrity. But, first world countries like Germany are struggling to enforce laws that don’t target admissible content.

Germany passed a law against fake news on January 1, 2018. It targets different social media sites like Twitter and Facebook. The law requires such platforms to delete fake information and hate speech posts in a day. The government will fine any platform that violates the law up to €50 million. But it has started reviewing the law since some justifiable information is locked in these platforms. Facebook sponsors a deepfake detection challenge by giving awards and funds to researchers who innovate new methods of detecting doctored videos.

The Association of German Journalists has criticized the law. They claim that social media platforms are not publishing information that might be misinterpreted under fake news law. It will increase the self-censorship of information in the future.

Fake news is a major concern for the Australian government. Many people cannot distinguish between justifiable and unjustifiable content. For example, during the last federal election held in May, fake news claimed that the Labor Party wanted to introduce a death tax on Facebook. Rumors claimed that the Liberal Party adopted the news in attack ads. Even so, the Australian parliament hasn’t passed a law against fake news. Instead, they have been urging social media sites to remove fake news in time.

Media and Propaganda Regulation

The Government of Bangladesh created a new bill in October 2018 that regulates propaganda. Anyone found spreading fake news about the 1971 war when Bangladesh won its independence from Pakistan will be imprisoned. The bill bans people from posting frightening content on social media. Journalists in the Asian nation are concerned about the law, according to The Economist.

In August 2019, the police arrested one photographer for spreading propaganda after supporting a student protest. He might be imprisoned for seven years for violating the law, according to Freedom House. The government has detained several web users since it passed the bill. The Dhaka Tribune published that the state arrested 22 people on cybercrime charges since November 2019. Later, Twitter and Facebook deleted fake pages and accounts that posted about the government.

Election Misinformation

The Federal Police announced on January 9, 2018, that it has created a task force to identify and punish people who publish fake news in Brazil. The move targeted misinformation about the October 2018 Brazilian presidential election. Emmanuel Macron, the French President has put several measures to prevent the spread of electoral misinformation. Agencia Publica has collected 20 draft bills from the Brazilian Congress by May 11, 2018. They focused on banning the spread of propaganda online a few days to the general election. Individuals who violate the bill will pay a fine of R$1,500 or face eight years imprisonment.

The Brazilian government signed a deal with Google and Facebook in 2018. It required the two platforms to control misinformation that third parties create and spread, according to The Rio Times. Even so, the document excludes any new projects that Google and Facebook will start in Brazil.

Luis Fux, the Brazilian Supreme Court Justice signed another agreement with local political parties in June 2018. The Superior Electoral Court created a multimedia fact-checking webpage that listed clarifications that people circulated before the 2018 Brazilian presidential election.

Misinformation Control

Burkina Faso’s parliament passed a law in June 2019 that prohibits the spread of fake news about human rights, terrorist attacks, destruction of property and security operations. Offenders will be jailed for 10 years or pay a fine of £7,000. Several rights groups criticized the law claiming that it will prevent journalists from reporting about national security.

Cambodia stepped up its fight against misinformation before the July 2018 general election. The government passed a law in May 2018 that allowed it to block media that threatens the country’s security. Offenders will face a two years jail term or pay a $1,000 fine for spreading misinformation. Three state ministers will check all social media posts, according to The Guardian. Many Cambodians have a murky understanding of how the government defines fake news.

A member of the ruling party said in 2018 that the law applies to media stations that spread misinformation. The Cambodian government launched a television program early last year that will address fake news.

Fake news spread on social media can reach millions of people. For instance, misinformation about the 2016 US presidential election influenced some voters to defect from supporting Barack Obama to Hillary Clinton. France, Germany, Russia, Malaysia, and Singapore are some of the countries that have passed laws against fake news.

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Laws against Fake News in Social Media appeared first on iPleaders.

This article is written by Akarsh Tripathi, a first-year learner of Symbiosis Law School Noida. In this article, he talks about the software and tools used by law firms to work from home.

Introduction

Amid the global pandemic due to the spread of novel COVID-19, every sector is shifting to remote working programmes such as work-from-home. It is one of the best possible ways to tackle the disruptions coming in the way of global business. Like other industries; law firms are also adopting new technologies and practices in order to move towards a ‘virtual law firm’. As long as there is a proper internet network available to the staff of a law firm, the setting up of a remotely working law firm can surprisingly be a much easier task. These vast arrays of software help law firms to thrust themselves into a more advanced and upgraded system, benefiting their clients.

However, not every law firm can use the same tech-management system. It is practically impossible for small-sized law firms to make such huge investments. In this article, we will also discuss the software and law practice management tools that many small-sized law firms are using currently. This can be helpful for firms who are looking for ways to overcome the lockdown caused by the COVID-19 outbreak and without going through any major IT infrastructure change. In the end, we shall also discuss the deficiency due to which switching to a remote-working programme is difficult for companies.

Various software and tools used by law firms to work from home

Time and Billing Software

Earlier lawyers and even law firms used paper timeslips and a notebook-paper based invoice system for billing purposes. This has been replaced by accounting programs that have both time and billing features available. The role of such software is usually to track time, make invoices and account reconciliation statements. Softwares like PCLaw do the work of billing for individual attorneys too.

Some of the widely used accounting and time billing software are Quickbooks, Tabs3/PracticeMaster, etc. For small law firms, RTG can be used, which is a basic product used for legal time and billing purposes. In case, any law firms are looking for a separate Time Billing Software, then Bill4Time is the king of leading law practice management software.

Video Conferencing Software

Even though we are targeting to move towards a remote-working and virtual law firm, the truth is, there are some things that can never be replaced. Well, embracing technological developments, we can’t say ‘never’. So is the case with face-to-face meetings. Video conferencing software has successfully been able to replace this requirement, so that you can have face-to-face interaction, without the physical presence of the person.

Law firms need to have a common software for video meetings in their offices. They need to train their staff as well so that they know how they can use the technology. Some of the leading software for video conferencing are Google Meets, Skype for business, Microsoft Team and Zoom, etc. Softwares like Zoom, also have features like the virtual background as an attempt to make these meetings look more professional. Although there are built-in cameras in every computer system these days, if law firms want to have a better quality video conferencing cameras, they may use webcams for the same. The Logitech HD Pro Webcam C920 is one of the best quality webcams that is used by most of the firms.

Sooner or later, even the courts will switch to this technology and adapt themselves to court proceedings via video conferencing. Then, lawyers and clients won’t be required to physically appear in court. The arguments and witness testimonies, etc all will be done via video conferencing.

Law Practice Management (LPM) Software

Technologies like these are proliferating in these years. It’s no more a daunting task for firms to have them saved on a cloud-based storage system. These software help lawyers to get real-time access to all documents and data at any time, anywhere.

Such a streamlined system will benefit the client as well as the lawyers which will further result in better client service. Such software also aims to go paperless and provide law firms with the comfort of being able to share client data, documents, etc.

While doing this, they must take proper precautions related to cyber-security procedures, because most of the data is confidential and using a third-party service might invite some unwanted risks and threats.

For small-scaled law firms, there are cloud-based software applications like ‘Actionstep’  and Dropbox which are affordable and can thus help firms to tackle the problems caused due to global lockdown crisis situations.

It is high time that law firms start using such software which will help them organize themselves in a better manner. Such software assists law firms to manage client-related documents, files, and information by storing them in a single place and making them accessible for clients as well as their attorneys. Don’t forget to check out Clio and Cosmolex, which are some legal software widely used by lawyers and law firms.

CRM Software

CRM stands for Client Relationship Management software. Experts say that clients prefer having sophisticated technology-based solutions so that they can have access to the legal advice and consultancy of lawyers in a much more comfortable manner.

The need for providing such services online is on an upsurge, which must be acknowledged by the legal community. The reason behind this is simple and very obvious: cost-effectiveness.

Law firms are trying to keep up with the upcoming new technology and building a client-focused firm by embracing the tools and software available.

For all these tasks, we have software and tools such as MyCase, Legal Files, etc which provide unparalleled features to help lawyers with client management systems.

Collaboration-enabled Document Processing Tools

In law firms, lawyers don’t work individually, rather there are teams and departments working on different projects in real-time. Here comes the need of having software that enables lawyers to collaborate and work together on a particular document.

For this, we have collaborative word processing tools which let users share access with others so that they can also view the documents, suggest edits to it, and well, can actually make edits by themselves. There are many great document assembly software like TFT Home(TheForm Tool), Microsoft’s QuickParts which have convenient user interfaces suitable for business purposes.

Also, while working on these word documents, many of them need to be signed. Now since they are in the form of softcopies, taking printouts, signing them and then scanning those documents again doesn’t sound like a feasible approach. For this, we have software like DocuSign through which you can digitally sign on documents.

Intra-firm Communication System

Having a streamlined system is a major factor on which the success of a virtual law firm is based. For this law firms need an intra-firm(within the firm) communication system Law firms have these regular phone systems set up throughout the offices. These phone systems may seem to be cost-effective.

However, the cost adds up quickly when they require a receptionist to answer and transfer the calls, and subscription of voicemail services. One advanced software to replace this system and beneficial for a virtual law firm is VoIP(voice over internet protocol). The only requirement is that of an internet connection.

Employees of the law firm can make and receive calls, store messages and even do conference calls. Another widely used software for these purposes is Slack.

Law firms must also keep in mind, which tools are supposed to be used, and when they must be used. Having separate communication platforms within the law firm can help lawyers to distinguish between normal and urgent/priority information.

Tools like ‘Loom’ can be used to provide training to the employees of the firm in the form of recorded lectures. Documents like those including some kind of guidelines for the team can be shared amongst the lawyers through various doc sharing software.

Freelancing

Once law firms shift to a virtual world, there will surely be no need for the maintenance staff of law firms or any other requirements, which will also save a lot of money for the firm. But what about the people who provide essential assistance to the lawyers of the firm? Who will do the secretarial jobs of attorneys? Well, we have a solution for this problem too.

Independent contractors or freelancers can help lawyers to take some burden off them, and delegate the work. Hire freelancers from Freelancer and Upwork to help you with a paralegal or executive assistant or secretarial work.

Misc. Tools

1. Online Fax Services

This isn’t something which is newly invented. Online Fax services have been in existence for almost more than a decade. However, not everyone knows about it. This helps lawyers by providing them with secure cloud-based fax services. Check out some online fax services like MyFax, eFax (and many more) which will provide professionals to send documents via computer and even smartphones.

2. Scanning Tools

In order to be able to work from home, law firms need to eliminate hard copies of the documents to conserve their storage space. This can be done by making scanned copies of the existing documents. This also helps in having a better record-keeping system within the firm. Tools like ScanSnap iX 1500 are highly recommended for such business purposes.

3. Speech-to-text dictation tool

Earlier lawyers used dictaphones, which they had to hand it over to someone so that the voice notes could be translated and typed. This has been replaced with the voice-recognition technology, through which lawyers can simply dictate their notes, and it will be typed as they speak. Some of the leading software in this regard are GoogleDocs Voice Typing,  Diction.io, etc.

Barriers

1. 1. Security:- The advent of technology also invites threats to the security and privacy of data, many of which are confidential. Thus, it is highly advisable for law firms that they start reviewing their security systems to ensure the safety of data. Using software and tools with end-to-end encryption is one of the very basic things to keep in mind while switching over and moving towards a remote-working programme.
   2. Accountability:- Law firms need to make sure that setting up a virtual law firm doesn’t cost them a lack of accountability. For this, they must keep a proper track of employees’ work, which again brings up the requirement of some kind of software and tools. 
   3. Miscellaneous issues:-
      1. Lawyers who work from home need to make sure they have proper and ample internet data and a good network speed because almost every task needs to be synchronised with the servers of the firm. For this, the employees can check their bandwidth network and speed online. Ookla Speed Test is one of the best online internet speed testing software.
      2. Proper home office setup is also required for lawyers to be able to work properly at home, as they may be required to do video-conferencing meetings from time to time.

Thus, to have a successful virtual law firm, there are a lot of software applications and tools available. Firms need to assess their needs and determine which technology to invest in. Bottom line is that the end result would be efficiency and effectiveness in the working of the law firm.

Conclusion

Don’t wait for this “social distancing” and lockdown to come to an end. Law firms can use this opportunity and upgrade themselves to a whole new advanced level, streamlined in a manner that gives quality services to clients.

Such software and the cost some of them bear for their procurement may inculcate second thoughts in the minds of law firms, especially small-sized law firms who were thinking about setting them up. However, the reality is, that these advanced systems and tools are like an investment with huge benefits.

Many law firms don’t have every software required for them to keep moving forward with remote working systems, and not get affected by this unprecedented crisis. They need the right tools which can help them integrate and synchronise their emails, calendars, file notes, documents, bills, and accounts, etc. For this, they also need to invest money but investing in operating systems, and tools like these will provide long-term benefits.

Apart from acquiring such software; Law firms are also required to give proper training to their employees so that they know how they can optimally use these technologies to their benefit. Even when the lockdown situation ends, law firms should switch to remote working programmes, i.e. creation of virtual law firms, and building a virtual legal community.  At the end Law firms need to analyze the current technology they possess in comparison to the resources they’ll need to meet the aim of having a well functioning new aged “virtual law firm”.

References

1. Best Legal Softwares-2020 https://www.softwareadvice.com/legal/ 
2. Practice Management Software Programs for Attorneys  https://www.thebalancesmb.com/legal-management-software-programs-for-law-firms-14148
3.  COVID 19 Challenges:- https://www.legalexecutiveinstitute.com/covid-19-challenges-law-firms/

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 Software and tools used by Law Firms to Work-from-Home appeared first on iPleaders.

This article is written by Widaphi Lyngdoh and Pradyumna Mishra, students of National Law University, Jodhpur. In this article, they have discussed employee protection goals in India, emphasizing mainly on a balance between workmen dues and claims of creditors under IBC and whether it is a fair practice or not.

“.. However, last but not the least, we request the creditors and the Resolution Professional to somehow see that the Company is sold as a going concern and the interest of workers/ employees be protected to their level best.” [1]

-The Hon’ble high court in the matter of Reid & Taylor

Introduction

The requirement to pay workmen dues was always there not only legally but also socially, because of the lower socio-economic standard of the workers. Lack of knowledge of their rights and laws were the most exposed factor in the bankruptcy of a debtor. In most of the cases, it was found that companies started doing such dues and payments through ‘strategic bankruptcy’. And hence stringent laws were needed to ensure the protection of right and payment of workmen dues. 

Earlier the act did not provide any safeguard or any mechanism for the payment of workmen dues. Also, there were substantial problems as the workmen dues were on a lower priority and the 11th Schedule of the Code proposes that there should be no application of Section 326 and 327 of the Companies Act, 2013 in the event of liquidation under the Code. Due to this, section 11 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 was rendered null and void.

Hence in 2016, the LokSabha realized the need to provide social security to the employees and the priority under the waterfall mechanism is given to the workmen dues.

The mechanism provided under IBC 2016 can better be understood as a marketing mechanism which aims at protecting the interest of the useful corporate debtors and provides a liquidation mechanism for unviable corporate debtors. This liquidation mechanism is one of the most undefined but reasonable aspects of the code, which is tagged in terms of procedure and hierarchy. Such tagging has been done for section 53 of the Code as ‘Waterfall mechanism’. It aims to distribute sale of liquidation assets in a hierarchy, where the use of the word ‘shall’ makes it compulsory to adhere to the hierarchy provided under section 53. 

Section 53 of the IBC envisages the liquidation waterfall mechanism which provides the hierarchy of payment after the sale of liquidation assets. Priority should be given to the debts below to all other debts.

• The expenses incurred during the liquidation proceeds and resolutions. 
• The dues of workmen for a twenty-four months period after the liquidation commencement dates and debts owed to secured creditors.
• Wages and unpaid dues of the employees, other than the workmen for 12 months period preceding the commencement of liquidation proceedings. 
• Financial debts owed to unsecured creditors.
• Amount due to the Central Government and the State Government for the period of two years in whole or in part including the amount to be received on account of Consolidated Fund of India and the Consolidated Fund of a State.
• All other debts owed to a secured creditor, including unsecured debts.

During an insolvency proceeding, workers who are the nerve Centre of a company adversely suffer. With the amendment of the Act and the Code, consideration has been given to prioritize the “workmen dues”. However, the term has not been defined in the code itself and instead explanation to section 53 has placed reliance for its definition on Section 326 of the Companies Act. Ironically, both the sections (Section 326 and 327(7)) application are not included during liquidation proceedings under the court. This, in turn, creates a gap in the interpretation of the term “workmen dues” and its definition has become open to interpretation which is explicated (usually) in such a manner which is detrimental to the workmen’s interest. Even after such eloquent drafting, the legislatures were unable to provide clarity with regards to the formation of liquidation assets under section 36 of the code rather they have provided the hierarchy of payment with the use of word ‘workmen dues’. No further clarification was given on what all payments will be included.

Where does the problem lie?

The implication of the term “workmen dues” as used under Section 53 carries a tinge of ambiguity. If we look at the explanation, as stated above, the term corresponds to meaning as assigned under Section 326 of the Companies Act, 2013 (Companies Act). Different kinds, almost all types of payment due to workers are included within its ambit (under the term workmen due). These sums even include dues in respect of pension, gratuity, provident funds and any other fund meant for the workmen’s benefit. Hence, relying on the explanation of Section 53, an inference can be drawn that even security dues which are workmen dues are covered under the ambit of waterfall provision.

The above reason was adopted by the liquidator for denying payment of gratuity and social security dues to workmen assigned for Moser Baer India Limited (corporate Debtor). Instead, he included these under the waterfall mechanism.

Significance of Provident Fund Dues

The intricacies of the proceedings of insolvency are sometimes used against the workers by the employers by way of “Strategic bankruptcies” to elude statutory dues and to renegotiate the rights and wages of the workers due to their lack of understanding of the complex process.

No safeguard was provided in the initial stages of the draft court; however, the representatives of the EPF Organization briefed the Joint Parliamentary Committee during the course of the deliberations that lower priority had been placed on the payment of debts in the draft code and the EPF dues. Moreover, Section 326 and 327 of the Companies Act, 2013 will not be applicable in cases of liquidation as proposed by Schedule 11th of the Code. Pursuant to this, Section 11 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 was rendered null and void.

The Attention of the committee was also being drawn towards the Supreme Court Judgments which rendered that priority should be given to the EPF dues over any other debt. [2]

The Joint Parliamentary committee pursuant to the above submission, submitted to the LokSabha in its report on the 28th of April, 2016 that “the provident, the gratuity and the pension fund provides a social safety net to the workmen and employees, hence it needs to be secured in the event of bankruptcy of a partnership firm or liquidation of a company.” [3]

It also stated in its recommendation, that the sums which are due to any employee or workman from the pension, provident and the gratuity fund shall not be included in the liquidation estate assets.

The dues that are payable under the MP and EPF Act are statutory dues which are payable to the workers. And it is one’s Right to life’s intrinsic fragment. Hence, a distinction can be drawn between wages which aren’t protected and rights which are protected from the creditors. Due to this reason, the committee decided that clause 36(4)(a)(iii) of the code will be substituted by “all sums due to any workman or employee and from the provident, the gratuity and the pension fund”. [4]

Moreover, recommendations were made as to the inclusion of new sub-clauses under Section 155(2) “all sums due to any workman or employee from the provident fund, the pension fund and the gratuity fund.” [5]

Section 155 states “that all property which belongs or is vested in the bankrupt shall be included in the estate of the bankrupt on the day of the commencement of the proceeding. It lays down three things that should not be included, these are, property held by the bankrupt on trust for any person, the excluded assets and lastly all the sums that are due to any employee or workman from the pension, gratuity and the provident fund shall be excluded.” [6]

Similarly, workmen’s Gratuity funds have been safeguarded from attachment during either liquidation or winding up.

Harmonizing with the above-said provision, the 2016 IBC also excludes gratuity funds from being part of the bankrupt’s estate or the liquidation estate.

Since the gratuity funds, the pension funds and provident funds provide a social safety net for workmen, their proceeds are secured and will not be included in either the bankrupt’s estate or the liquidation estate.

Case Laws

In the case of Precision Fasteners Limited v Employees’ Provident Fund Organization the Hon’ble National Company Law Tribunal, Mumbai Bench gave a clear guideline to liquidate employee’s provident fund before paying any other creditor. Hon’ble NCLT said that EPFs are worthy enough to get prioritized higher than the creditors. The Bench stated, “the sums which are due to employees and workmen from the gratuity, provident and Pension funds under sub-clause (iii) of section 36, shall not be included in the liquidation estate.”

It further stated that workmen and employees are entitled to provident fund and other benefits by the virtue of the operation of law, such benefits and dues are the assets of the employees and not the company, Court used the deeming fiction to infer that there is no need to make a separate interest to legitimize such claims as such interest are already there in the form of pension fund/provident fund etc. Earlier, as per the EPF Act, the provident fund had an overriding effect over all other dues including unsecured and secured creditors. However, IBC 2016, by excluding workmen’s dues from the liquidation estate did two things; firstly it extended the earlier law that was in existence, secondly, it strengthened the right of the workmen regarding PF/Pension/Gratuity fund dues by entirely excluding this asset from the liquidation estate which in turn leaves it open to the PF authority or the workmen to realize their pension fund/gratuity fund/provident fund dues without waiting in a queue of the water-fall mechanism.” [7]

While deciding the above duty to ensure that the workmen dues are excluded from the liquidation estate and they are consequently paid to them as per section 53 are of the liquidator, the main objective is to make employees realize that their interests are given higher priority even from the cost of liquidator which is deducted from the liquidation estate. The Court provided the reasoning for the above by interlinking the workmen dues with the Right to Life. The court observed that a workman spends and works his whole life considering that some part of his salary will be saved which will be given to him after retirement and that will be a valuable source of income and support for him. Thus you cannot include workmen dues in the liquidation estate to pay off the debt of the company and infringe the inalienable right of people. Other dues shall also include provident fund, pension and gratuity payment as these must be considered as the property of workers lying with corporate debtors. Hence these payments cannot be claimed by the creditors as a matter of right. 

Similarly, in the case of Alchemist Asset Reconstruction Company Ltd. v Moser Baer India, the NCLT Bench was of the view that assets of the corporate debtor do not include provident, pension, and gratuity fund as mentioned in section 53 of the act for the settlement of the claims of the creditor. 

A fine comparison and distinction were drawn between section 326 of Companies Act and section 53(1)(b)(i). Where Section 53 covers workmen dues for the period of 24 months, section 326 does not provide any such time limit or period. Adhering to the judgment of Precision Fasteners Limited v Employees’ Provident Fund Organization it held that workmen dues are not the part of the corporate debtor’s assets and they are the property of the employees. Hence as per section 36 employees’ dues including provident fund, pension and gratuity fund shall be excluded from the liquidation estate. 

Moreover, the above case also settled the position of law by restricting the overriding effect of Section 268 of the Companies Act. Section 268 empowers the Companies to act to override the IBC 2016 in case of any contradiction. But in this case, the court prevented workmen dues from this overriding effect and held that it will not have any bearing over the assets of the workmen (relating to Provident Fund, Pension Fund and gratuity). The Hon’ble Bench has taken the following view by providing reasoning that protection of workmen is the intention of the IBC 2016 and hence no law in force should infringe that. 

Thus the intention of the code is to deliberately keep provident fund and pension fund away from the liquidation estate and from the clutches of the liquidation process in what so manner under the strict protection of section 36. In simple terms, these dues should be paid on priority before the liquidation process commences and should not be subject to the mercy of the creditors or the priority-ladder of the waterfall mechanism.

Conclusion

Workmen and employees are the pillars of strength of the economy; therefore, safeguarding their interest during their employer’s insolvency and bankruptcy proceedings is a necessity. Also focusing on recuperating jobs of employees (social and human Capital) from an unfeasible to a feasible enterprise should be indispensable.

The following comments were made by The International Association of Restructuring, Insolvency and Bankruptcy Professionals on the inefficacy of insolvency regimes in resolving problems related to the experiences of the employees in events of insolvency of their companies: “Whenever a company goes through a liquidation process treatment of workmen dues is an emotional and survival question for the employees. Employees, who are the lifeblood of the enterprise, they are the assets of the company but not their pensions. Nowadays newspapers are filled with the news of employees not getting their benefits. The legacy costs associated with employees’ benefits, pension claims and wages can amount to an enormous sum and is often among one of the most intractable issues when it comes to the confrontation in restructuring a company.” [8]

Glancing at other countries’ legislation, the aspect of employees’ interest at the time of insolvency is well recognized in the UK as two separate laws are enacted for dealing with insolvency and employment matters. For employment separate Transfer of Undertakings (Protection of Employment) Regulations (TUPE) has been enacted which priorities workmen dues in liquidation. [9]

In Italy, the Marcora Law in order to rescue employees from companies which are distressed, employee’s buyout is practised. Moreover, a collaboration between stakeholders was also made possible by creating schemes of financial support that provides assistance to distressed companies suffering through economic difficulties. Workmen participation was highly encouraged in running and facilitating the everyday work of the firm. The employee buyout in Italy has created and saved as many as 239,300 jobs and 257 new employees owned firms were created wherein most of them have adopted the worker cooperatives model, managed and owned by the employees themselves. [10]

The legislature of Italy has created favourable mechanisms and legal frameworks in order to help raise employee’s capital.

The attempt of the IBC 2016 and every other regime or legislation in the world at large is to find and create a balance between the employment protection goals on one hand and rescuing companies that are insolvent on the other.

In India by the virtue of the waterfall mechanism the code aims at protecting the social and legal rights of the workmen in the liquidation process. Waterfall mechanism not only ensures distribution but also works as a watchdog which prevents practices like ‘Strategic Bankruptcy’. 

To further this idea the bankruptcy and insolvency code since its enactment has provided relief to different classes, the unique feature of the waterfall mechanism has not been given the clarity and understanding it deserves.

Moreover, the IBC along with empowering employees with the requisite legislature to help them in recovering their unpaid wages and salaries during the resolution proceedings of the corporate debtors also allows them to keep their source of livelihood alive.

Adding on to that, the new precedents that evolved in recent years has helped in furthering the trend and in upholding the purpose of the legislature as well as the act.

References

[1] Edelweiss Asset Reconstruction Co. Ltd. v Reid and Taylor India LimitedC.P.No.382/IB/MB/MAH/2018.

[2] E.P.F. Commissioner v. O.L. of Esskay Pharmaceuticals (2011) 10 SCC 727.

[3] Report of the joint committee on the Insolvency and Bankruptcy Code, 2015, Sixteenth Lok Sabha, April, 2016/vaisakha 1938(saka).

[4] Section 36(4)(a)(iii) of The Insolvency and Bankruptcy Code, 2016.

[5] Section 155 (2) (d) of The Insolvency and Bankruptcy Code, 2016.

[6] Section 155 of the Insolvency Bankruptcy Code, 2016.

[7] Precision Fasteners Limited v Employees’ Provident Fund Organisation C.P.(IB)1339 (MB/2017)

[8] International Association of Restructuring, Insolvency and Bankruptcy Professionals, 2005.

[9] Jensen Anthony. A report on Insolvency, Employee Buy Rights and Employee Buyouts, A strategy for Restructuring.Ithaca Consultancy.

[10] VoineaAnca. The path to worker buyouts: Does the UK need its own ‘Marcora Law’?

The post Employee Protection Goals in India: A balance between workmen dues and claims of creditors under IBC  appeared first on iPleaders.

This article is written by Melita Tessy, a student at School of Law, Christ University. In this article, she discusses the theoretical and conceptual framework of family law mediation.

Introduction 

Modern mediation refers to a movement that gathered momentum in the 1970s in the United States, in the 1980s in Australia and the United Kingdom and in the 1990s in much of Europe, Africa and India. [1] 

The need for accessible and affordable dispute resolution was identified in the Pound Conference, formally known as ‘The National Conference on the Causes of Popular Dissatisfaction with the Administration of Justice’ in the address given by Frank Sander. [2] 

The above-mentioned conference took place in Minneapolis in 1976 and addressed issues relating to the perceived crisis in access to justice. A similar voice of dissatisfaction was being heard globally.

Taking the themes that emerged from the then dissatisfaction with access to justice, writers such as Blankenburg, Galanter and Johnson continued to debate on the visions for the justice system. These visions included the introduction of mediation. [3]

In India, the 129th Law Commission of India Report [4] and the report by The Malimath Committee (Committee on Reforms of the Criminal Justice System constituted in November 2000) recommended that a provision for settlement of disputes outside the court be created by the legislature. Based on this, section 89 of the Civil Procedure Code, 1908 was inserted in 1999. [5] 

This section deals with out-of-court settlement mechanisms such as arbitration, conciliation, judicial settlement including Lok Adalat settlements and mediation.

However, there is no specific legislation governing mediation in India. Voluntary mediation is treated as a purely contractual creature established and regulated in accordance to the agreement between the parties and Court Referred or Annexed Mediation under section 89 of the Civil Procedure Code is governed by the Mediation Rules of 2003.

As a result, there is no statutory definition given to the term ‘mediation’. A widely accepted definition of mediation is given by Goldberg and Sanders. According to them, ‘mediation is negotiation carried out with the assistance of a third party. The mediator, in contrast to the arbitrator or judge, has no power to impose an outcome on disputing parties.’ [6] 

Thus, conceptually, mediation is an assisted decision-making process.

Family mediation refers to the process of settlement of family law disputes such as divorce, partition, restitution of conjugal rights and so on through the process of mediation. Family disputes deal with the sensitive personal issues of people and can often involve children. Mediation in this scenario, because of its facilitative and confidential nature, can make the process of settlement of these disputes much easier in comparison to litigation.

With time, the areas of family mediation practice have expanded beyond those arising from divorce and separation and include child protection, child abduction, the homeless young and other kinds of family disputes such as intergenerational family matters. [7]

In this paper, the theoretical and conceptual framework of family mediation under Alternative Dispute Resolution in India is explored.

Legal Framework

Mediation in India is traced back to the Panchayat system that existed since the Vedic Ages. It is believed to be the oldest mode of out-of-court settlements in India. However, the modern-day methods of alternative dispute resolution in India cannot be directly linked to the Panchayat system due to the colonization of the Indian subcontinent by the British. During the colonial period, various legislations were passed by the British rulers to regulate the locals, especially those that lived near the Presidency towns. Arbitration was widely promoted as a means of settling disputes. The Civil Procedure Code of 1859 and various Regulation Acts such as the ones in 1781, 1787 and 1793 laid down the procedure for arbitration in India with the objective of arriving at a mutually-beneficial result between the parties. There are no reliable records as to how successful these efforts were.

Later, the Indian Arbitration Act in 1899 based on the English Arbitration Law of 1889. The Act of 1899 was repealed in the year 1940 and laws relating to arbitration were redrafted and consolidated as the Arbitration Act, 1940 based on the English Arbitration Act of 1934.

After Independence, the word ‘arbitration’ was incorporated under Entry 13 of the Concurrent List of the Indian Constitution. Subsequently, the Arbitration and Conciliation Act, 1996 was enacted based on the UNCITRAL (United Nations Commissions on International Trade Law) Model Law to keep up with the new challenges that liberalization, privatization and globalization of the economy presented to the judiciary. The 1996 Act superseded the Arbitration Act of 1940.

It is clear from the above paragraphs, that the development of alternative dispute resolution was primarily restricted to Arbitration. Conciliation was given some significance only in the year 1996. Despite this, however, these developments indirectly allowed the legal minds of the country to understand the need for mediation and although slow-paced, provide minimally for its regulation.

Coming to Family Mediation, The Hindu Marriage Act and the Special Marriage Act prescribe mediation as the desirable mode of dispute resolution. This can be seen in sections 23(2) and 23(3) of the Hindu Marriage Act of 1955 which make it mandatory for the court in the first instance to try mediation in every case where it is possible, in keeping with the nature of the case. Corresponding provisions can be found in Section 34(3) and 34(4) of the Special Marriages Act.

Research Questions

1. What is the scope and what are the shortcomings of mediation in India? What is the scope of family law mediation in India?
2. What are the steps to be taken to improve mediation in India? 

The History of Alternative Dispute Resolution in India

The ancient Indian jurisprudence recognised two methods by which disputes between citizens could be settled, viz. judicial process in the Court established by the King and the other by various categories of Arbitration Institutions. [8] 

The earliest known model of Alternative Dispute Resolution was the Panchayat system created during the ancient Vedic ages, where the head of the family or the chief of the community acted as the Panchayat head, and whose commands were believed to be the voice of God and was obeyed unquestionably. [9]

During the colonial period in India, various regulations and rules were framed to introduce alternative dispute resolution mechanisms into the legal systems in the Presidency Towns of Madras, Bombay and Calcutta. However, these regulations were concerned with arbitration primarily and laws to facilitate other forms of out-of-court settlements such as mediation and conciliation were not developed.

The Regulation Act, 1781 recommended judges to direct parties to approach a mutually agreed person to settle the disputes among them. However, in such cases, an award of the arbitrator could not be set aside unless there were two witnesses who testified that the arbitrator had committed gross errors or was partial to a party. [10]

Regulation of 1787 laid down rules for referring suits to arbitration with the consent of the parties. However, there was no detailed provision to regulate the arbitration proceedings, nor any provisions for the consequences of the award not being made in time or for the situation in which the arbitrators differed in their opinion. [11]

Regulation XVI of 1793 came up with provisions referring suits to arbitration and submitting them to the decision of the Nizam. Further Regulations XXI of 1793 and XV of 1795 made provisions to promote references of disputes of certain description to arbitration. They even laid down procedures for reference, award and set aside. They further recommended criteria for the appointment of arbitrators. Regulation VI of 1813 allowed arbitration in suits, with respect to rights in land and disputes regarding the forcible disposition of land. Regulation XXVII of 1814 allowed Vakils to act as arbitrators, removing an age-old bar on acting as such. [12]

The act of 1840 passed by the Legislative Council of India amended the law concerned with the arbitration. Section 312 to 327 of the Code of Civil Procedure, 1859 permitted references to arbitration in pending suits. The Code allowed arbitration without the intervention of courts.

Later, the Indian Arbitration Act was enacted on arbitration law in the year 1899. It was based on the English Arbitration Law, 1889. It recognised the concept of arbitration agreements and it allowed reference of present and future disputes to arbitration. The Act of 1899 was repealed in the year 1940 and laws relating to arbitration were redrafted and consolidated as the Arbitration Act, 1940 based on the English Arbitration Act of 1934.

After Independence, the word ‘arbitration’ was incorporated under Entry 13 of the Concurrent List of the Indian Constitution. To increase efficiency, the Indian economy was liberalised, privatised and globalised. This created new challenges in settling large numbers of commercial disputes. The Arbitration Act, 1940 proved insufficient in tackling these new issues. This led to the adoption of the UNCITRAL (United Nations Commissions on International Trade Law) Model Law by India which enacted the Arbitration and Conciliation Act, 1996 superseding the Arbitration Act of 1940. 

In Babar Ali v. Union of India and Others [13], the constitutionality of the 1996 act was challenged. However, the court was of the opinion that the Act was not unconstitutional and in no way did it offend the basic structure of the Indian Constitution.

The government has since independence made efforts to encourage the various types of alternate dispute resolution so as to reduce the burden on courts, improve time efficiency and reduce costs for the parties. However, there are still significant improvements to be made, especially in the field of mediation.

Mediation and Courts in India

The pressure on the judiciary due to a large number of pending cases has always been a matter of concern as that being an obvious case of delay. Therefore promoting widespread use of mediation and conciliation as an effective means of settling disputes without resorting to the formal litigation process has been at the forefront of the Indian Judiciary over the last decade.

In ONGC v. Collector of Central Excise[14], the dispute was between government and department and PSU. It was held by the Supreme Court that public undertaking to solve the disputes amicably by mutual consultation in or through good offices empowered agencies of government or arbitration avoiding litigation. The Government of India was directed to constitute a committee consisting of representatives of different departments to monitor such disputes and to ensure that no litigation comes to court or tribunal without the committee’s prior examination and clearance.

In Salem Advocates Bar Association v. Union of India,[15] the Supreme Court held that after referring a matter to admissions and denials, courts should direct the parties to opt for one of the modes of Alternative Dispute Resolution specified in Section 89. It was observed in this case that the intention of the legislature behind enacting Section 89 is that where it appears to the court that there exists an element of a settlement which may be acceptable to the parties, they, at the instance of the courts, shall be made to apply their mind so as to opt for one or the other of the four Alternative Dispute Resolution mechanisms mentioned in the section and if the parties do not agree, the court shall refer to one or the other of the said modes.

Subsequently, in Afcon Infrastructure Ltd. V. Cherian Varkey Construction Pvt. Ltd.[16], the Supreme Court laid down the summarized procedure to be followed by the referral judge while referring a matter to an alternative dispute resolution method under section 89 of the Civil Procedure Code. As per the procedure, preliminary hearings are to be fixed once the pleadings are complete but prior to the framing of the issues. At this stage, the judge should independently consider the suitability of the case for referral to Alternative Dispute Redressal. In the event the case falls under a suitable category, the judge should obtain the consent of both parties and explain to them the choice of Alternative Dispute Resolutions available, nature and process of the mechanism, and the costs involved. In the absence of consensus, the judge should simply refer simple matters to Lok Adalats and more complex matters to mediation. Once the settlement is reached through Alternative Dispute Redressal, the court will proceed to make a decree in terms of the settlement in accordance with the principles of Order 23 Rule 3 of the Civil Procedure Code and in case no settlement is arrived at, the court will hear the suit. Therefore, based on the case, courts may mandatorily refer to certain categories of matters to Alternative Dispute Resolution.

Mediation around the World

The four countries discussed below are discussed because they have something to offer to the mediation system in India. This section does not consist of a comprehensive collection of facts relating to all aspects of mediation in the countries discussed. Rather, the data provided is limited to relevant details that facilitate understanding of the scope of regulation of mediation. The data is largely obtained from the book ‘Mediation Practice and Law’. [17]

Spain

Spain passed the law on mediation in civil and commercial matters effective from July 2012 to give effect to the 2008 European Union directive on Mediation. Till the passage of the Act, mediation as an alternative dispute resolution mechanism was not widely used in Spain, although the concept of mediation was not unknown in the country. [18]

The 2012 Act applies to civil and commercial matters in Spain with the exception of consumer, employment and public administration mediations, and criminal cases. Cross-border mediations are covered under the Act if at least one of the parties is based in Spain and the mediation takes place in Spain. As per the Act, parties are compelled to attempt to mediate in good faith if there is a mediation clause in a contract. Provisions of the act deal with the qualification of mediators, initiating mediation, confidentiality, restriction on litigation or other legal proceedings during mediation and enforceability of settlement agreements, both domestic and foreign.

The Act specifies that to qualify as a mediator, an individual has to pass specified courses such as law, psychology, negotiation, communication, ethics, etc. In Spain, mediators can be held liable for any damages caused by their actions and are required to have a civil liability insurance policy.

Limitation period is suspended for the duration of the mediation but resumes if the constitutive session is not held within 15 days from the date that the mediator received notice of the mediation. Settlement agreements are binding on the parties.

Italy

Mediation has been used in Italy for several years in family and labour related matters, but only in the last fifteen years has it gained prominence. Several laws provide for mediation, but the European Union Mediation Act, 2011 incorporated into the system is the main law on the matter. The law provides that mediation can only be conducted by mediation bodies accredited by the Ministry of Justice.

Tax incentives and tax credit are available to parties who opt for mediation. A duty is imposed on lawyers to inform their clients in writing about the option of submitting the dispute for mediation and the financial incentives of doing so. The presence of lawyers during mediation is mandatory. The non-attendance of a party at a mediation session without valid justification results in penalties in the form of court costs in future litigation.

The law provides for criteria to be fulfilled by mediators for accreditation and the minimum training required. They may be held liable for misconduct or gross negligence or improper behaviour. Mediation bodies are required to have insurance cover of at least Euros 500,000. 

Austria

Austria was one of the first countries of the European Union to enact comprehensive legislation on mediation through the Civil Law Mediation Act of 2004. Under this Act, mediators must have proper education and qualifications and be registered with the Ministry of Justice. For registration, a mediator must be qualified through training, of at least 29 years of age, with no criminal record and with professional liability insurance. Breach of the confidentiality obligation is punishable by a term of imprisonment of up to 6 months or a fine.

Australia

Mediation in Australia is conducted as a court-connected procedure. There are a few institutions that conduct mediation like the Institution of Arbitrators and Mediators, Australia, the Association of Dispute Resolvers, National Dispute Resolution Advisory Council, Law Society of New South Wales and the Victoria Bar Mediation Centre. In Australia, legal representatives can be held liable for not informing clients of this requirement.

Australia does not have any law for the regulation of mediators, though a voluntary National Mediation Accreditation System has evolved as the primary source of mediator standards since 2008. Accredited mediators are required to hold indemnity insurance. 

Recommendations to improve Mediation in India

The following recommendations are based on mediation trends in the countries discussed above and the Mediation Rules of 2015. The recommendations are as follows:

• In India, the Central Mediation Rules provide the qualifications necessary to be a mediator in court-connected mediation centres. However, they don’t provide qualifications for mediators in private centres. This leaves private mediation largely unregulated which can leave inexperienced and underqualified mediators providing sub-par services to the parties. Framing rules based on the system in Spain and Austria can enhance private mediation in India. The 2012 act governing mediation in Spain specifies that to qualify as a mediator, an individual must pass specified courses such as law, psychology, negotiation, communication, ethics, etc. This is followed by training specific to the practice. For registration, as a mediator is Austria, among other things, one must be qualified through training, of at least 29 years of age and with no criminal record. Adopting these provisions can make mediation well-known and attract youngsters into the field. This has the additional benefit of creating employment opportunities. 

As per Rule 5 of the Mediation Rules 2015, court-empanelled mediators need to have a minimum of 10 years of experience as a lawyer or they need to be a Judicial Officer of the Higher Judicial Service or they need to be an expert or professional with fifteen years standing. All these qualifications take a long time to achieve. A lawyer with a ten-year practise might, in most cases, find it profitable to continue his practice when compared to beginning a new mediation practice. The same can be said for an expert or professional with 15 years standing. Retired judges, bureaucrats and senior executives can also be court-empanelled mediators. But it is to be noted that the said individuals are not half as hungry for jobs as youngsters would be. They have a plethora of high-profile tasks to choose from once they retire. For example, they may be tasked with heading committees, quasi-judicial bodies, advisory roles, mentoring and so on. For these reasons, the qualifications required to be a court-empanelled mediator must not be the same as the qualification required to be a private mediator. If it is possible, even the criteria to be a court-empanelled mediator must be widened.

• Under Rule 26 of the Mediation rules, no honorarium (fees) is paid to court-nominated mediators in cases where a settlement is not reached by the parties. Given this situation, it is sadly, reasonable to assume that this might make the mediator act in his own interests as opposed to those of the parties when it comes to settling a dispute. In fact, the highest fee a mediator can acquire per settlement is when it comes to family law disputes such as matrimonial cases, custody, guardianship, probate, partition and possession. Upon settling one such family law dispute, a mediator is entitled to a payment of Rs. 3000. If he has settled two or more of such connected cases, he is given a maximum of Rs. 4000. If mediation is to ever become a sustainable career choice, this pay structure must be modified by increasing the fees per settlement.
• The second recommendation is concerned with insurance. In Spain, mediators are required to have a civil liability insurance policy. Mediation bodies in Italy are required to have insurance cover of at least Euros 500,000. In Austria, mediators are required by law to have professional liability insurance. Accredited mediators in Australia are required to hold indemnity insurance. These requirements provide a safety net to the parties to a mediation. They give legitimacy to the mediation profession. Parties will be compensated for any losses they suffer due to the negligent actions of the mediators. For the said reasons, mediators must be mandated to have professional liability insurance in India. 
• The law in Italy provides that mediation can only be conducted by mediation bodies accredited by the Ministry of Justice. A similar regulation can be framed in India so that the quality of mediation can be high. 
• In Italy, a duty is imposed on lawyers to inform their clients in writing about the option of submitting a dispute for mediation and the financial incentives of doing so. This alone can greatly popularize mediation and its benefits can be successfully reaped. 
• Another important aspect of popularizing mediation would be by making it a part of law-school and business-school curriculum in the form of an elective course. 
• The last recommendation is the most obvious one. It is for the legislature to pass an act that governs mediation. Till the passage of the 2012 mediation act in Spain, mediation as an alternative dispute resolution mechanism was not widely used in Spain, although the concept of mediation was not unknown in the country. Passing an act for mediation in India can have the same effect in India as passing an act for mediation had in Spain.

Types of Models of Mediation

There are four main models of mediation. They are:

1. Facilitative Mediation; 
2. Evaluative Mediation; 
3. Transformative Mediation and;
4. Expert-advisory Mediation. [19] 

They are differentiated on the grounds of objectives, procedures and value assumptions.

Facilitative Mediation

In the facilitative style of mediation, the mediator is in charge of the process, but the parties are in charge of the result.[20] This mediation model may be adopted where the parties, on their own accord, cannot reach a conclusion as to what procedure must be followed in conducting the mediation proceedings. This type of mediation generally consists of joint sessions where all the parties are present and importance is given to the interests of the parties.

In facilitative mediation, caucuses are held on a regular basis. They want the parties to have the major control on decisions made, rather than the parties attorneys.[21] This is the first and most common form of mediation. The goal of this type of mediation is a win-win settlement where the mediator helps all the parties achieve a mutually beneficial result.

Evaluative Mediation

An evaluative mediator guides the parties in reaching resolution by highlighting the weaknesses of their cases, and predicting what a judge or jury would be likely to do. Evaluative mediators are more concerned with the substantive legal rights of the parties rather than focusing on positions and interests and evaluate based on legal perceptions of fairness. The mediators meet quite often in separate meetings with the parties and their attorneys, practising shuttle diplomacy.[22] The evaluative mediator is totally responsible for organizing the process of the mediation, and also directly influences the outcome of the mediation.

Evaluative mediation is oftentimes court-mandated or court-referred mediation. Attorneys normally work with the court to decide the mediator and are active participants in the mediation. The role played by the parties are most often much less active here when compared to facilitative mediation.

Transformative Mediation

This type of mediation came after facilitative and evaluative types of mediation. It was propagated by Professors Baruch Bush and Joseph Folger in 1994. [23] 

According to Leonard Riskin “in some ways, the values of transformative mediation reflect those of early facilitative mediation, in its interest in empowering parties and transformation.” [24] 

In a transformative style of mediation, the parties are responsible for the formulation of both the process and outcome of mediation, and the mediator has to follow the lead. [25]

Both facilitative and transformative types of mediation are focused on empowering the parties and their interests. This can promote greater ownership of the agreed settlement by the parties, making them more willing to abide by it. However, the said types can take much longer to settle when compared with evaluative mediation. They can also end without a settlement reached. Another issue that plagues facilitative and transformative mediation is a power imbalance. The party/parties with greater bargaining power (Access to Legal and Technical Experts, Greater Spending Capability) can dominate those with lesser bargaining power since the mediator takes a backseat and it is up to the parties to play an active role in negotiating a settlement. When the mediator is involved to a great extent, the process has more credibility. Evaluative mediation too, however, has its disadvantages. The positions of the parties will be fixed as it is based on the party’s rights rather than interests. This might lead to polarization. The parties in evaluative mediation may be more reluctant to collaborate with each other to find a solution and a win-win situation may become harder to achieve when compared to facilitative and transformative styles of mediation.

Expert-Advisory Mediation

This type involves a high intensity of mediators intervention in the problem. Expert Advisory mediators are typically senior lawyers or other professionals chosen on the basis of their expertise in the subject-matter of a dispute and their pre-eminence, rather than their mediation practice skills.[26] Parties are generally accompanied by legal representatives. A positional bargaining approach similar to that in evaluative mediation is adopted rather than an interest-based one. That is, the parties hold a fixed position regardless of underlying interests. The advantage is that the parties focus on the issues common to all of them rather than the interests specific to each of them. 

Expert advisory mediation may be useful where there is a power imbalance between parties. The party/parties with greater bargaining power will not be allowed to dominate those with lesser bargaining power because the mediation process and its results will be respectively controlled and directly influenced by an expert mediator who is concerned with the rights of the parties and not their bargaining ability or interests. This type of mediation can be court-mandated quite often.

Court-annexed Mediation

Court-annexed mediation refers to court-referred or court-mandated mediation proceedings under section 89 of the Civil Procedure Code where the referral judge oversees the mediation proceedings conducted by the mediator. It is governed by the Mediation Rules of 2015. It is one of the types of court-annexed alternative dispute resolution mechanisms. The 129th Law Commission of India report notes that:

When a court refers a case to a court-annexed mediation service, keeping the overall supervision of the process, no one would feel that the system parts with the case. This also gives a larger public acceptance for the process, as the same time-tested court system, which has acquired public confidence because of integrity and impartiality retains its control and provides additional service. [27] 

Advantages of Mediation 

According to Goldberg and Sanders, ‘Despite the lack of ‘teeth’ in the mediation process, the involvement of a mediator alters the dynamics of negotiation.’[28] This altered dynamic is a preferable one as the mediator helps the parties understand each other’s views, provides new legal and technical information and makes an assessment of the alternatives to a settlement. The advantages of mediation are enlisted below:

• Mediation is more time and cost-effective than arbitration and litigation. Parties to a mediation settlement need not go through long court waiting lists. It is advantageous compared to conciliation for those who want guidance, but also want to come up with solutions by themselves. It is ideal for those who want to make use of the least intrusive process in reaching a settlement.
• The mediation process is a flexible one. The structure of the mediation process is not rigid. Rule 10(a) of The Mediation Rules of 2015 allows the parties to decide on the procedure to be followed by the mediator in the conduct of mediation proceedings. If they don’t reach an agreement regarding the procedure to be followed, Rule 10(b)(i) gives the mediator the power to fix, in consultation with the parties, a time schedule, the dates and the time of each mediation session, where all parties have to be present. The same opportunity is not provided by traditional courts to the parties in a case. Rule 10(b)(ii) even allows the mediator to hold the mediation session at any convenient location agreeable to him and the parties. This level of flexibility is highly desirable to the parties who opt for mediation. However, the currently applicable Mediation Rules of 2015 does not have this provision. Rule 11 of the 2015 rules merely state that a matter referred to the mediation must be settled by the structure usually followed, including but not limited to, introduction and opening statement, joint session, separate session(s) and closing. 
• The efficiency that mediation offers does not only benefit the parties but also benefits overburdened civil courts by reducing their workload.
• Mediation assures privacy under Rule 21 of the 2015 rules by allowing all mediation sessions to be attended only by the concerned parties or their counsel or the power of attorney holders. Other persons can attend only with the permission of the parties and with the consent of the mediator. This level of privacy cannot be guaranteed in in-court settlements. 
• Rule 12 of the 2015 rules state that Mediation is not bound by The Evidence Act, 1872 or Code of Civil Procedure, 1908. This in itself extends the flexibility of the Mediation process. Confidentiality to be maintained by the parties and the mediator under Rule 20 of the 2015 rules is another attractive feature of mediation.

Theories of Mediation

According to Ury, Brett, & Goldberg, there are three methods that can be used in conflict resolution.[29] These three methods are applicable to mediation. These three methods give rise to three different theories of conflict resolution. The first and third theory is applicable to facilitative and transformative models of mediation, while the second is applicable to evaluative and expert-advisory mediation. They are:

The Theory of Power-oriented Conflict Resolution

A party using power to resolve a dispute seeks to prevail over the other party by using force: physical, economic, or psychological. An example of physical force would be a civil rights group blocking access to a restaurant believed to be discriminating in hiring; economic force would be the civil rights group organizing a consumer boycott of the restaurant; psychological force would be a member of the civil rights group refusing to talk to one of his friends until he stopped patronizing the restaurant. Threats to take harmful action if one’s demands are not met are another use of power. Determining which party is more powerful without engaging in a potentially destructive power contest is difficult. This is because power is largely a matter of perception and each party’s perception of its own and the other party’s power may differ. Additionally, once a power struggle has begun, it can easily spiral out of control as each party invests more and more resources for fear of losing a decisive battle. The restaurant believed by the civil rights group to be discriminating may, for example, engage high-priced lawyers to seek millions of dollars in a defamation action designed to bankrupt the civil rights group. The latter, in turn, may seek to persuade suppliers not to do business with the restaurant. In the end, a power contest results in costs for both parties, even if one capitulates.

The Theory of Rights-oriented Conflict Resolution

Another way to resolve disputes is to rely on an independent standard with perceived legitimacy or fairness, such as the law or a contract between the parties, to determine which party is “right.” A problem with this approach is that rights are rarely clear. One party relies on a law that supports its position; the other party relies on a different law or a different interpretation of the first law. To resolve the question of whose rights, standard or interpretation should prevail, the parties often need to turn to a third party, an arbitrator or judge, to make a binding decision. Involving a third party decision-maker is frequently a costly and time-consuming procedure. Furthermore, the loser may only grudgingly comply with the third-party’s decision, leading to further disputes. Finally, a conclusion that one party is right and the other wrong may end their existing relationship and the prospect of any future relationship. Think of the number of divorced couples, who, after a bitter court fight over child custody, are soon back in court because they cannot cooperate on some new child-related issue.

The Theory of Interest-oriented Mediation

Interests are peoples’ needs, desires, concerns, or fears, the things they care about or want. Interests underlie people’s positions, the tangible items they say they want when they make or reject claims. Reconciling interests is not easy. It involves probing for deep-seated concerns, determining which interests are more important than others, devising creative solutions that reconcile interests, and making trade-offs and concessions. But, interest-based agreements are possible in many disputes. Recall the quarrel between husband and wife about whether to spend money on a new car. Suppose that his underlying interest was to impress his friends and hers was reliable transportation. An interest-based solution might be to buy a high end, but less expensive, used car with a long-term warranty, so satisfying the wife’s interest in reliable transportation and the husband’s interest in impressing his friends. In the land-use permit dispute, both the government agency and the user groups may have an interest in conserving the park for future use. As a result, the agency may agree to issue a use permit if the users agree to leave the campsite in a pristine condition and solicit volunteers for the annual park clean-up day.

Family Law Mediation

Matrimonial disputes are a key area for the use of mediation. When mediation first started as a structured process, it was introduced for matrimonial and industrial disputes. Even before trained mediators came on to the scene, family counsellors were common. Sometimes psychologists and even divorce lawyers try to reconcile differences between the couple. The very nature and composition of a family unit – domestic, sensitive, emotional and private – draw a presumption for the use of consensual dispute resolution. [30]

Mediation of matrimonial disputes has many advantages in comparison to litigating the same. Family mediation creates a safe space for analysing touchy topics and enables rational thinking in difficult circumstances. This, in turn, enables the parties to understand each other and draw up solutions that are mutually favourable. When issues are solved this way as opposed to a time-consuming, adversarial process, there is much less to recuperate from.

In fact, the process in itself creates scope for inner-healing and reparation of the relationship between both the parties as there is no fighting involved. Keeping confidential delicate and intimate issues is another attractive feature of mediation. Parties are more likely to be honest and willing to open up regarding their feelings and interests, especially since either party can meet up with the mediator separately. Children involved in mediation as opposed to court proceedings are less likely to suffer from neglect and emotional and physical insecurity as the process endeavours to be quick and empathetic to their needs. 

Indian statutes concerned with family disputes emphasize the need for attempting reconciliation and out-of-court settlements. Settling through reconciliation in family disputes received statutory recognition in India even before the enactment of Part III of the Arbitration and Conciliation Act of 1996.

Importance of Family Law Mediation

The traditional approach in most family law disputes has been for each partner to consult their own lawyer and for the two lawyers to negotiate on their client’s behalf, reach agreement if possible or, if not, hand over to a judge the responsibility of making decisions. The judge makes an order that is imposed on the parties based on the facts before him.

For couples unable to reach an agreement on their own, the only alternative, therefore, was to transfer responsibility for negotiating and decision-making to third parties. So, mediation emerged to fill a space hitherto unoccupied, which none of the existing services, welfare, advisory or therapeutic on the one hand and lawyers and the courts on the other, could in nature have filled. 

Statutory Provisions concerned with Family Law Mediation in India

The Hindu Marriage Act and the Special Marriage Act prescribe mediation as the desirable mode of dispute resolution. This can be seen in sections 23(2) and 23(3) of the Hindu Marriage Act of 1955 which make it mandatory for the court in the first instance to try mediation in every case where it is possible, in keeping with the nature of the case. Corresponding provisions can be found in Section 34(3) and 34(4) of the Special Marriages Act. The court must make every endeavour to bring about a reconciliation between the parties to the dispute, and may refer the matter to a person nominated by the parties or by the court to effect a reconciliation.

Section 89 and Order XXXII-A of the Code of Civil Procedure, 1908, which makes it obligatory for the court to refer all suitable disputes to arbitration, conciliation, mediation or judicial settlement. Section 14 of the Protection of Women from Domestic Violence Act, 2005 provides that the court can refer the matter to conciliation at any stage of the dispute. The Family Courts Act of 1984 makes a slight departure in Section 9 of the Act making it the court’s obligation to try and bring about a settlement between the parties. 

Conclusion

Backlog of cases in judicial bodies due to an overwhelming number of petitions undermines the fundamental goals of in-court processes. It also violates the fundamental right to a speedy trial under Article 21 laid down in Hussainara Khatoon & Ors. v. Home Secretary, State of Bihar. [31] Each and every dispute need not be heard by a judge in a court. This gives courts the opportunity to reduce the backlog by referring cases to alternate dispute resolution mechanisms once a case is deemed fit for such mechanisms. Popularizing mediation and other alternative dispute mechanisms, setting up mediation centres in every district and training mediators needs to take place so that justice is assured to all those who seek it. 

At the same time, precautions must be taken to not overburden court-connected mediation centres. Cases must not be referred to mediation indiscriminately as all cases are not suitable for the same. The act of referring a case to mediation with an intent to delay court proceedings or to avoid a judge must be identified and discouraged by levying a fine. Pre-litigation mediation and non-litigative mediation must be promoted in suitable areas so that mediation does not denigrate to a solely court-controlled process. In cases where parties select and pay their own mediator, the room for success is greater as they have confidence in the mediator’s ethics, ability and neutrality. They pursue the process earnestly since it is funded by them. This also ensures that they refrain from resorting to delaying tactics and avoiding judges.

References

[1] N. Alexander, Global Trends in Mediation (1st Edition, Kluwer Law International, 2006)

[2] Frank E. A. Sander, Varieties of Dispute Processing: Address at the National Conference on the Causes of Popular Dissatisfaction with the Administration of Justice (Levin and Wheeler, 1979)

[3] M. Cappelletti, Alternative Dispute Resolution Processes Within the Framework of the World Wide Access-to-Justice Movement, 56 Modern Law Review 287 (1995)

[4] Law Commission of India, Report on Urban Litigation Mediation as an Alternative to Adjudication (129th Report, 1988)

[5] The Civil Procedure Code (Amendment) Act, 1999, No. 46, Acts of Parliament, 1999 (India)

[6] Stephen B. Goldberg, Sander and Rogers, Dispute Resolution: Negotiation, Mediation and other Processes (3rd Edition, Aspine Law and Business, 1999)

[7] Marian Roberts, Mediation in Family Disputes: Principles of Practice (3rd Edition, Ashgate Publishing Company 2008)

[8] Dr Kane, History of Dharmashastra: Volume 3 (1st Edition, Bhandarkar Oriental Research Institute, 1968)

[9] Maine, “Ancient Village Communities”, Ancient Law: Its Connection with the Early History of Society, and Its Relation to Modern Ideas (1st Edition, Hardpress Publishing, 2019)

[10] Rishab Sinha, Sarabjeet Singh, “Taking Alternative Dispute Resolution To The Common Man”, … http://www.adrcentre.in/images/pdfs/Taking%20Alternative%20Dispute%20Resolution  %20To%20The%20Common%20Man.pdf

[11] Nripendra Nath Sircar, Law of Arbitration in British India, 1962

[12] Vishnu S Warrier, Arbitration, Conciliation and Mediation (1st edition, LexisNexis, 2015)

[13] Babar Ali v. Union of India and Others, 2 SCC 178 (SC: 1999)

[14] ONGC v. Collector of Central Excise, 4 SCC 541 (SC: 1995)

[15] Salem Advocates Bar Association v. Union of India, 1 SCC 49 (SC: 2003)

[16] Afcon Infrastructure Ltd. V. Cherian Varkey Construction Pvt. Ltd, 8 SCC 24 (SC: 2010)

[17] Sriram Panchu, Mediation Practice and Law (2nd edition, LexisNexis, 2015)

[18] Arevalo, Irene, Mediation in Spain, IBA Mediation Committee Newsletter, April 2005, pg.29

[19] N Alexander, The Mediation Metamodel: Understanding Practice, 26 Conflict Resolution Quarterly 97 (2008)

[20] Leonard L Riskin, “Understanding Mediators” Orientations, Strategies, and Techniques: A Grid for the Perplexed, 1:7 Harv. Neg. L.R 7 (1996)

[21] Anirban Chakraborty, Law & Practice of Alternative Dispute Resolution in India: A Detailed Analysis (1st Edition, LexisNexis, 2016)

[22] Lela P. Love, The Top 10 Reasons Why Mediators Should Not Evaluate, 24:4 Florida State University Law Review 937 (1997)

[23] Robert A. Baruch Bush and Joseph P. Folger, The Promise of Mediation: Responding to Conflict Through Empowerment and Recognition (1994)

[24] Leonard L Riskin, ‘Understanding Mediators’ Orientations, Strategies, and Techniques: A Grid for the Perplexed, 1:7 Harv. Neg. L.R 7 (1996)

[25] Id.

[26] Supra 9

[27] Supra 4

[28] Supra 6

[29] Ury, W. L., Brett, J. M., & Goldberg, S. B., Getting Disputes Resolved (1st edition, Cambridge, 1993) 

[30] Sriram Panchu, Mediation Practice and Law (2nd edition, LexisNexis, 2015)

[31] Hussainara Khatoon & Ors. v. Home Secretary, State of Bihar, AIR 1369 (SC: 1979)

The post The Theoretical and Conceptual Framework of Family Law Mediation appeared first on iPleaders.

The article is written by Milind Rajratnam, from Dr Ram Manohar Lohiya National Law University, Lucknow.

Introduction

The institution of marriage gives rise to obligations, conjugal relations and certain rights between the spouses and this is the reason why law seeks the discharge of those marital obligations. In India, conjugal right is believed to be inherent in the very institution of marriage and not a mere creation of statute.

But in cases where foreign element, i.e. Private International Law, is involved, then for the purpose of resolution of Conflict of laws, the Courts resort to the Principles of Comity or Courtesy and in some cases, the Courts also use the Principle of reciprocity.

Till date, there is no specific and cogent legislation in India with regards to NRI marriages and there is an urgent need of legislative intervention in this matter as delivering Justice to all by way of legislation is far more satisfactory way of dispensing Justice, than delivering Justice on a case by case basis.

This article will be analyzing the existing measures through which the Indian Courts deal with NRI marriages and will also be pointing out the loopholes present in them.

Marriage and Divorce

The basic belief relating to marriage is that it is a sanctified union which joins two individuals for life. Divorce is a serious issue which devastates the interest of the parties involved and therefore the courts should make every attempt to save the marriage and should insist on the performance of marital obligations.

Sharing of common life, including all the happiness and misery associated with it, is the essence of marriage. Living together is a symbol of sharing such aspects of marriage, while living apart indicates disruption of the essence of marriage and if this disruption goes on, then it has the tendency of causing breakdown of marriage.

The institution of marriage gives rise to obligations, conjugal relations and certain rights to both the spouses and therefore the law seeks the discharge of these marital obligations. Withdrawal from state of things is considered to be violation of marital obligations and duties[i]. Marital obligations are safeguarded and protected because they are considered to be the foundation of a family. In every family system, divorce is discouraged to a large extent and is permitted only in grave circumstances and that too in a manner specified by law.

The Supreme Court in Bipin Chander Jai Singh Bhai Shah v Prabhawati[ii]observed that withdrawal from a state of things, i.e. “the home”, is desertion. For desertion to be a ground of Divorce under Section 13(1)(ib) of the Hindu Marriage Act, 1955, two conditions need to be fulfilled. Firstly, there has to be intention to bring the cohabitation to an end permanently (animus deserendi) and secondly, there must be factum of separation. Also, with regard to the deserted spouse, another two essential conditions, i.e. absence of consent and absence of conduct giving reasonable cause to the other spouse to form intention to desert the matrimonial home, has to be proved by the complainant[iii].

Justice Chandrachud in N.G. Dastane v S. Dastane[iv] said that the court has to take into consideration the particular couple that has approached the court, and not the ideal couple because ideal couple will probably not approach the court for the resolution of differences between them. Lord MacDermott in Preston Jones v. Preston Jones[v]observed that, while dealing with cases involving the issue of divorce, there should be strict enquiry conducted and the marriage bond should not be left aside lightly as it involves the status of parties. This observation is still relevant in Indian context and therefore every possible efforts should be made in order to save the marriage and bring about reconciliation between the parties.

Matrimonial Problems faced as a result of NRI Marriages

In India, over the years, the issue of NRI marriages has gained substantial importance by virtue of it assuming alarming dimension due to the fraudulent trappings of Indian Women by the People of Indian Origin (PIOs) and Non-Resident Indians (NRIs). Since there is not any specific and cogent legislation with regard to NRI marriages in India, there is an urgent need of legislative intervention.

Matrimonial disputes are already one of the most complex areas for legal intervention and it becomes more complex when one of the parties of the marriage belong to an area beyond the borders of India. Such marriages then enter into a maze where there is a conflict of laws of different nations.

There are some typical issues that arise in NRI marriages which are pointed out by the National Council for Women after conducting research on actual cases in different nations. Some of them are:

• Abandonment of women by her husband after being taken to the foreign country.
• Brutal assault, battering and abuse of women, both mentally and physically, by the husband and his family members.
• Capturing and holding of the women in the foreign nation for the sake of huge sum of money as dowry.
• Giving false information relating to the job, salary and property to the family members of the women before marriage, and later conning the women into marriage.
• Hiding of the status of pre-existing marriage by the husband.
• Husband who has obtained divorce from women through an ex-parte decree by making false representations without her knowledge in other legal systems.
• Women encountering jurisdictional obstacles in Indian Courts due to unavailability of cogent legislation in this regard[vi].

Current legal status on disputes arising out of NRI Marriages

In order to deal with the foreign decrees of matrimonial matters, there is a need of well-developed Private International Law body that has the power of recognition, reorganization and solemnization of marriages alongwith checking the legitimacy of a foreign decree of divorce. In India, the rules of Private International Law is either scattered in different legislations, i.e. Special Marriage Act, Foreign Marriage Act, etc., or have been evolved by the courts. But these are not cogent enough to deal with all sort of issues that arise in a NRI marriage as they are deeply based on the English Rule of Private International Law.

Although the courts in India have repeatedly appealed to the legislature for enacting a law that seeks to prevent the injustices that are caused to the Indian wives of those NRIs who obtain an ex parte decree of divorce without the knowledge of their wives, from courts of foreign jurisdiction. There is also a need for such a provision in that enacted law that gives recognition and solemnization of foreign marriages here.

In the case of Y. Narsimha Rao v Y. Venkata Lakshmi[vii], the SC held that jurisdiction assumed as well as the grounds of decision made by the foreign court should be in consonance with the matrimonial laws under which the parties are married.

Just like the European Nations did under the Brussels II framework on Regulation of Recognition of Foreign Orders, India should also enter into bilateral/ multilateral agreements with other nations for purpose of recognition of matrimonial decrees given in courts of foreign jurisdiction.

The Foreign Marriage Act of 1969

In order to fulfill the assurance of a law that will deal with marriages in which one of the party is a foreigner, the Parliament came up with the Foreign Marriage Act in the year 1969[viii], which contained provisions for marriages of Indians who are residing outside the territories of India, or one of the parties to the marriage is a foreigner. It has borrowed most of the provisions from the Foreign Marriage Act, 1892[ix] of Britain and Marriage Act, 1961[x] of Australia.

Although the Foreign Marriage Act was an improvement in this regard, but it doesn’t contain any provision which explicitly deals with divorce, nullity of marriage and other matrimonial reliefs. Also, it has certain loopholes that are critically analysed hereafter:

1. Not overriding: The provisions of this act are additional provisions and do not have overriding effect over the existing laws which means that it is depended upon the discretion of the person who is marrying a foreigner or is marrying in a foreign nation, to decide whether they want their marriage to be solemnized under this Act or not.
2. Incomplete Act: This Act can be said to be an incomplete Act as it deals with only three factors relating to foreign marriages, i.e. solemnization of marriage, process of solemnization and the registration of marriage. Apart from these three, there is no provision dealing with the issue of divorce, nullity of marriage, maintainance, citizenship of child born out of such marriages, etc.
3. Inadequate Provisions for Penalty: By virtue of Section 19[xi], 20[xii] and 21[xiii] of the Act, it is evident that the punishments and penalties, prescribed under the Act applies only to the Indian party of such foreign marriages and this has the tendency of limiting the scope of this Act as in cases like that of desertion, where one of the party files a suit for desertion and the other challenges the said suit on the ground of marriage not to be subjected to Indian laws, then anomaly will be created by virtue of Hindu Marriage Act being only applicable when both the parties are Hindu. So, in such cases, the foreign party will easily evade the punishment and only the Indian party will be subjected to the penal provisions of this act.
4. Use of ‘may’ in Section 4 and 17 of the Act: The use of word ‘may’ in Section 4[xiv] and 17[xv] makes this Act an enabling legislation. This act does not contain provision that make the solemnization and registration of marriage, a compulsion. In order to make it a compulsion, the act should have contained the word ‘shall’ or ‘must’ in the place of ‘may’.

Suggestions

In India, the laws that can deal with the issues arising in NRI marriages are scattered in different legislations which makes the amendment in so many legislations a difficult and time-consuming task, therefore it is proposed that there should be single legislation dealing with all the issues arising out of NRI marriages which contain the following frameworks:

• It should make the registration of NRI marriages compulsory, notwithstanding any existing provision under any law.
• The NRI party should be required to compulsorily file an affidavit stating that he is not already married or divorced, before the solemnization of marriage.
• There must also be amendment in the Indian Passport Act to provide a separate page in the passport containing details regarding the marital status, photograph of spouse, etc.
• The proposed law should also provide that the marriage between an Indian and an NRI will only be legitimate within India if the marriage takes place under this Act.
• In order to protect the wife from ex parte decree that is usually obtained by the NRI husband in case foreign marriage, the proposed law should specifically state that such an ex parte decree that is obtained without the knowledge or consent of the wife shall not be enforceable in India.
• The proposed law should also provide for adoption and child custody of child born out of such NRI marriages.
• There should be recognition of the property of the married couple as joint property by law and it should be divided between both of them in accordance with the provision of law and not according to the whims and fancies of foreign courts.
• The proposed law should also provide for bilateral co-operation between the Indian government and the overseas authority with regard to the aggrieved women abroad.

Conclusion

To think of “Uniform Private International Law Rules” is like a dream which will not come true and therefore there is a need to resort to more feasible options such as bilateral agreement between nations on issues arising out of matrimony, like Britain has done. To resolve the issue of conflict of laws in matrimony, the British Parliament came up with the Foreign Judgments (Reciprocal Enforcement) Act, 1933[xvi]. Section 1 of the said Act talks about bilateral agreements between nations for the recognition of foreign marriages[xvii].

Also, as already been discussed about the complexities that the Indian Courts have to face in the absence of a cogent legislation with regard to NRI marriages, there is an urgent need of the Parliament to take cognizance of the matter and enact a legislation pertaining to it.

References

[i] Bipin Chander Jai Singh Bhai Shah v Prabhawati, AIR 1957 SC 176.

[ii] Id.

[iii] Mulla Hindu Law, 20^th ed., India.

[iv] N.G. Dastane v S. Dastane, AIR 1975 SC 1534.

[v] Preston Jones v. Preston Jones,[1951] A.C. 391, 417.

[vi] http://ncw.nic.in/PDFFiles/Book-NRI_Marriage.pdf; last visited on March 30, 2020.

[vii] Y. Narsimha Rao v Y. Venkata Lakshmi,1991 SCC (3) 451.

[viii] The Foreign Marriage Act, 1969.

[ix] Foreign Marriage Act 1892, Chapter 23 (56 & 56 Vict.).

[x] Marriage Act 1961, No. 12, 1961.

[xi] Section 19, The Foreign Marriage Act, 1969.

[xii] Section 20, The Foreign Marriage Act, 1969.

[xiii] Section 21, The Foreign Marriage Act, 1969.

[xiv] Section 4, The Foreign Marriage Act, 1969.

[xv] Section 17, The Foreign Marriage Act, 1969.

[xvi] Foreign Judgments (Reciprocal. Enforcement) Act, 1933. [23 GEO. 5. CH. 13.]

[xvii] Section 1, Foreign Judgments (Reciprocal. Enforcement) Act, 1933. [23 GEO. 5. CH. 13.]

LawSikho has created a telegram group for exchanging legal knowledge, referrals and various opportunities. You can click on this link and join:

The post Conflict of Laws in Matrimony appeared first on iPleaders.