In this blog post, Soumya Deshawar, a student of University of Petroleum and Energy Studies, Dehradun, analyzes the different aspects of fair use which have been provided as rights to the disabled people and the special provisions for them. The post also explains Digital Rights Management Systems, and how the disable people are being affected by it.

Copyright Law, which protects the rights of many on one hand, has become a barrier to access information on the other hand. This particularly is prevalent in the developing countries. Many developing countries that have signed the internationally accepted Intellectual Property Agreements set down the minimum standards for the protection of copyright. Most of the countries have neither yet incorporated such requirements into their National Copyright Laws due to socio-economic and political reasons, nor have they taken any advantage of the limitations and exceptions allowed in such international agreements. This concludes that many developing countries have no provisions in their National Copyright Laws for persons who are visually or print disabled, resulting in the restriction or blockage of access to information for persons with sensory disabilities, thus overriding their fair use rights. Many of such disabled people are distant learners because of their inabilities.

“India Is First to Ratify the “Marrakesh Treaty” Easing Access to Books for Persons Who Are Visually Impaired” [1]

India became the first nation to approve the Marrakesh Treaty for facilitating access to the published works for blind people, the ones who are visually impaired, or are otherwise print disabled. Till date, more than seventy-five states, who are the members to WIPO have signed the Treaty that was adopted on 27th June, 2013 by means of a diplomatic conference that was organized by WIPO and was hosted by the Kingdom of Morocco in Marrakesh. This treaty will be taking effect after twenty ratifications are presented to WIPO. India was the first to officially notify WIPO of its ratification.

India’s Permanent Representative to the United Nations in Geneva, Dilip Sinha said, “India supports the Marrakesh Treaty for its human rights and social development dimension. The speedy ratification of the Treaty reflects India’s commitment to facilitating access to published works for the millions of blind, visually impaired and otherwise print disabled persons.” He further added “We hope other countries will follow India’s lead quickly so the Treaty can enter into force and we begin to see real and tangible benefits for the world’s blind and visually impaired community.”][2]

This treaty facilitates the access of published works to the persons who are blind, visually impaired, or in any other way, are print disabled and addresses the “book famine” by calling for its contracting parties to implementnational law provisions that authorize the reproduction, circulation and facilitating the availability of published works in  formats that are accessible. An example of such formats is Braille, through boundaries and exceptions to the rights of copyright holders.

This treaty also consists of provisions for the interchange of such format works that are accessible, across borders by institutions that attend to the people who are blind, visually impaired, and print disabled. It will synchronize limitations and exceptions so that these institutions can function across borders. The fast production of such works in accessible formats should elevate the total number of works existing so that it eliminates the replication and increases efficiency.

 The Treaty also intends to facilitate guarantees to authors and publishers that the system will not uncover their published works for any misuse or their distribution to any person other than the actual beneficiaries. The Treaty restates the prerequisite that the sharing of works to cross-borders, that have been created keeping in mind the limitations and exceptions, must be limited to certain exceptional cases which do not clash with the usual exploitation of the work and do not vaguely prejudice the legitimate interests of the right holders.

Background

There are some 285 million persons in the world who are blind and visually impaired as per the World Health Organization, out of whom, 90 percent reside in developing countries. A survey conducted by WIPO in 2006 revealed that less than 60 countries have limitations and exceptions sections in their national copyright laws that mark special provisions for the ones who are visually impaired.

The findings of World Blind Union conclude that, out of the millions of books published each year in the world, not more than 10 per cent are made obtainable in formats which are accessible to the people who are visually impaired.

Special Provision for Access to the Disabled

Compulsory License for the Disabled

Section 31B of the Copyrights Act, 2012 lays down provisions for the compulsory license in works for the help of the disabled. The Copyright Board, on a request for a CL by anyone working for the benefit disabled on the basis of profit or for the purpose of business shall dispose of such an application in a period of not more than two months from the date on which the receipt of application is provided.

The Compulsory License so issued must stipulate the means and format of publication, the term of the compulsory license and the number of replicas that may be provided including the royalty to be delivered.

Fair Use Rights for the Disabled

The clause (zb) lately added to the section 52(1) of Copyrights Act, 2012, provides for fair use of the published work for the benefit of the people who are disabled. It enables the adaptation, reproduction, issuance of copies or communication to the public of a work in any format that is accessible to the disabled to access the works comprising of sharing with any disabled person for personal use, educational purposes or research. These rights are available to all the people or organizations that are working for the benefit of the disabled persons.

Digital Rights Management Systems

Digital technology has the potential to transform the lives of sensory-disabled people. For example, the synthesizers that convert text-to-speech allow the words displayed/typed on the screen to be read out loud and the images so displayed to be described orally. This allows the blind people to understand the text by hearing. Also, software that allows a computer to respond to the commands given orally, instead of written commands by keyboard or a mouse helps the visually impaired people to operate the computer with ease. Screen readers which decode the electronic text into Braille are also available.

Awkwardly, DRMs restrict the above activities. For instance, e-books from Adobe have the inbuilt capacity to be read out loud by a computer, but the owners of rights use technological protection methods to turn off this application by Adobe. These measures block the access for blind people, even when they have authentically purchased the original work. Such things override the exceptions provided by copyright laweven when no legal barriers exist, and create technological barriers. International IP agreements and national laws in some countries prohibit users from evading or bypassing measures for protection for legitimate access purposes.

Conclusion

People, who are sensory-disabled, should be authorized to transform material into accessible format or media without seeking copyright permission from the owner of rights, unless he is facilitating the suitable accessible version under the same terms and at the same time as to the normal sighted-persons.

Copyright laws should be able to protect the rights of persons who are sensory-disabled and not just create vehicles for seeking permission. They should be self-sufficient in providing appropriate limitations and exceptions to ease, and not restrict, the access to knowledge. Also, the balance between the rights of information-users and just demands of rights-owners must be reestablished. Only then can it be possible for the persons with sensory-disabilities to get a fair deal.

Footnotes:

[1]http://www.wipo.int/pressroom/en/articles/2014/article_0008.html

[2]http://www.wipo.int/pressroom/en/articles/2014/article_0008.html

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In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University tries to examine if subsidies can be eliminated in a country like India, given its socio-economic conditions.

People who are in favor of subsidies give the argument that due to the subsidies provided, more goods are services are being produced in that particular sector, and more employment opportunities are being created. But the point which is almost never acknowledged is the benefits the society would have reaped if the money would have been spent otherwise or left in the pockets of the taxpayers.

Opportunity cost of subsidies

Here the concept of opportunity cost comes in. This concept of opportunity cost is instinctual, choosing between X and Y. In economic terms opportunity cost can be defined as expenditure in its highest alternative use. A small example of it can be given. Suppose a person has Rs 1000 in his pockets and spends Rs 800, on a party night that Rs 800 is no longer to buy him necessities like food or clothes. Now, on a bigger scale, a very similar example can be given. Suppose the government spends Rs 1000 crore in constructing a bridge that a very few number of people will use, that money is not available anymore to be spent on other services like healthcare, education and other policies which are on high priority. The economy is made up of a feedback mechanism and in such mechanism the parallel between households and the governments in not perfect and foolproof. But when there is a budget constraint, all spending decisions are traded off. In an ideal situation, the aim of the government is to plan its expenditure in such a way that the return to the society is roughly same as the spending. But this balanced is disordered by subsidies.

Subsidies not only hurt the general governance of the society, but it also impacts the overall economic structure. Very recently, The World Trade Organization’s 2015 in its Nairobi Ministerial decided to scrap subsidies provided on cotton exports. Reacting to that, the Indian Government has stated that the eliminations of the subsidy will benefit Indian exports. According to the government, the scrapping of such subsidies creates a level playing field.[1] These statements reinforce the fact that elimination of subsidies helps in a larger way too. Talking about subsidies on fuel, these subsidies also cost Oil Marketing Companies a lot. According to a report, the under-recovery incurred by OMCs in the first quarter of the financial year 2014-15 itself was Rs 28, 690.74 crore.[2] Contrary to popular belief, the duty and the excise on fuels is not much. The price of fuels like petrol and diesel keeps on going up due to the subsidies provided on them.

The biggest problem of subsidies is that they decrease the surplus in a disguise. For example, consider a hydropower plant. The water used to produce electricity is also utilized by a farmer to irrigate his field. Now, when a cubic meter of water goes through the turbine to generate electricity, it has much higher value than irrigating the farmer’s crops. The government then comes up with a subsidy policy which allows him to pump out water from the reservoir at a minimal cost. This results in diverting the water from the water source to a lower value use, which in turn shrinks the surplus and the economy as a whole generates a smaller surplus.

Withdrawing of subsidies leads to a positive growth of the economy. And finally, the Indian government is also treading the lines of economic growth. The BJP government, after 18 months in power, withdrew the subsidy policy on LPG for those with an income of more than Rs 10 lakh. This is a wonderful step which will give a shot in the arm to the Indian Exchequer. The government made an LPG subsidy payout of Rs 40, 551 crore in the year 2014-15.[3] The government began the “Give it up” campaign urging well-off people to give up their subsidies on LPG cylinders under which some 57 lakh people opted out of their LPG subsidies.[4] The numbers were not really satisfactory, and hence, the government decided to go a step further by removing subsidization based on the income of households.

Government subsidies payment in Rs crore[5]

Effect of subsidies on efficiency

Granting of subsidies has its first order or static effects. Economic experts often say that subsidies create economic distortions, especially the subsidies which are used to promote any particular sector or industry. In such cases, resources are more often than not, diverted to less productive use, thereby reducing the economic efficiency. Those who are in favor of subsidies counter this view by contending that these subsidies serve other redistributive goals. But again what they miss out is that providing subsidies may have external effects, which were not anticipated.

Dynamic Effect of Subsidies

Over time, the benefit reaped from the subsidy policies capitalize into the least elastic form of production. Subsidies are transitional. It helps only that section of the society who can immediately take the benefits of the subsidies. The successor of these people ends up paying a higher price for the subsidized product.

The beneficiaries of subsidy programs become socially trapped also. Matters become worse when subsidization is used to support employment. Due to the subsidies being provided, people are more inclined to enter the profession, and mobilization in that form of profession stagnates. The amount of dependence on subsidies becomes an obstacle when it comes to making new policy reforms.

Distribution of subsidies

It is of no doubt that some subsidies do benefit some disadvantaged groups. But even in such cases, these subsidies benefit companies and richer people more. Ironically, the distribution consequences of subsidies are often the opposite of what had been really intended. The passage between the government and those who are intended recipient of the subsidy benefits is often more like a stream rather that a pipe which provides ample opportunity to other to dip themselves in the stream and reap the benefits of it before the actual intended recipient.

Effect on Environment

On the outset, subsidy policies may not harm the environment intentionally. But again, they do harm the environment in disguise. When talking about “environmentally harmful subsidies”, it often means subsidies which provide high incentives to heavy production, consumption, and transportation, which harm the environment. For example, if high subsidies are given in the fishery industry, to promote offshore fishing, it will lead to the depletion of important fishery stock. Talking about other industries, subsidies which offer incentives for higher production and consumption often lead to an increased amount of waste emission and discharge.

Political Motive and Subsidies

Various shortcomings of providing subsidies have been mentioned above. It is evident that the subsidy policies do more damage than good.  Still why do the government bring into play these kinds of policies? These answers can be found in political motives of the ruling government. They are often motivated to provide subsidies to a specific section of the society who may increase their vote banks.

Finally, the bureaucracy itself can present an obstacle. Government ministries rarely admit to having a vested interest in the continuation of the support programs they administer, but it is hard to imagine total disinterest being the norm. More subtly, the bureaucratization process often feeds a pervasive notion that the subsidized activity forms part of the natural order of things. Subsidies thus metamorphosize into entitlements, and any attempt to curb them becomes politically hazardous.[6]

An introspective approach regarding subsidies will lead to the fact that one of the main causes of India’s fiscal problems has been subsidies. There is no alternative source that compensates the losses accrued due to subsidies. In such a scenario, the question arises whether subsidies should be completely done away with?

Like every coin that has two sides, this question can also be answered in two perspectives. One perspective is that subsidies on food, fuel, etc. should be completely removed. This can be done by hiking the price in these sectors marginally and then remove subsidies in a phased manner. This would reduce the shock of elimination of the policy at one go. Over time, this would help the government in maintaining healthier fiscal balances and using its money to promote growth in key areas in the country. This, in turn, would help promote investment interests of the private sector as well as bring in long-term foreign capital. The combined effect would be long-term growth for the country.

The other view is that in a country like India, with a population of more than 120 crore, and half of them living in poverty, it is impossible to eliminate subsidies. Providing subsidies have become a part and parcel of the Indian economic structure. The missing link is a proper structure of distribution of subsidies between the government and the actual intended recipients. If the process is made water-tight, subsidies will cease to be a burden on the economy of the nation.

The fact that cannot be negated is that a significant number of people in the country are poor, and they do need governmental aid. On the other hand, the fact that subsidies are a burden also can’t be negated. But by keeping the prices low in a fabricated manner by providing subsidies, the government is not doing any good to the economy of the country. Therefore, the need of the hour is to get on with new policy reforms and start eliminating subsidy policies in a phased manner.

Footnotes:

[1]http://economictimes.indiatimes.com/news/economy/policy/elimination-of-export-subsidies-on-cotton-beneficial-for-indian-exports-says-government/articleshow/52013264.cms

[2]http://pib.nic.in/newsite/PrintRelease.aspx?relid=107321

[3]http://www.financialexpress.com/article/economy/tax-payers-earning-over-rs-10lyr-not-to-get-subsidised-lpg/184675/

[4]http://www.firstpost.com/business/ending-lpg-subsidy-for-the-well-off-a-welcome-move-will-kerosene-urea-follow-soon-2563840.html

[5]data:application/octet-stream;charset=utf-8,Category%2CFY14%20(Actuals)%2CFY15%20(Revised%20estimates)%2CFY16%20(Budget%20estimates)%0AUrea%2C38038%2C50300%2C50500%0ADecontrolled%20fertilisers%2C29301%2C20667%2C22469%0AFood%2C92000%2C122676%2C124419%0APetroleum%2C85378%2C60270%2C30000%0AInterest%2C8137%2C11147%2C14903%0AOther%2C1778%2C1632%2C1520%0ATotal%2C254632%2C266692%2C243811 – [5]http://www.firstpost.com/business/ending-lpg-subsidy-for-the-well-off-a-welcome-move-will-kerosene-urea-follow-soon-2563840.html

[6]https://www.iisd.org/gsi/effects-subsidies

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In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University writes about the principle of undisclosed principal in a contract of agency. The post highlights the provisions under the law and also the rules which govern the rights and liabilities of the parties. 

The principle of Agency is a special contract in which two parties enter, where one person, known as the agent has the authority to act on the behalf of the other known as the principal.  Undisclosed Principal is a concept which falls under the law of agency in contract law.

Undisclosed Principal

Under the law of contracts, the concept of undisclosed principal relates generally to the rights and obligations of the agent when he is working on the behalf of the principal. Under some cases, the agent may not disclose the name of the principal and the fact that, he is working on behalf of someone else. In such a case, the agent will be held personally liable for his action.

In the case of a disclosed principal, the agent does not bear personal liability for his action. The obligations arising out of the act of the agent falls on the principal. An undisclosed principal is a person who uses an agent to enter into negotiations and transactions, without his own identity being revealed. It seems as if the agent is acting on his own. So, if any dispute arises regarding the transaction, negotiations, or contract, the real principal will not be held liable.

In a case where there is an undisclosed principal, but later the identity of the principal comes to the knowledge of the opposite party, then the opposite party may choose to hold the principal liable because he is the one who has a real interest in the transaction.[1]

The relationship could be explained with the help of an example. Suppose, X is the agent of Y, and X contacts Z to enter into a contract with him to sell his goods for the use of Y. But X does not disclose that he is Y’s agent, and it seems to Z that X is acting on his own accord. X keeps the identity of Y a secret. X and Z enter into a contract, for the sale of certain goods at a certain price. The agreement is entered in the name of X. as if he is the principal. If there is any subsequent breach of the contract, Z can hold X personally liable. In case Z had the knowledge that X is only an agent, and knew the identity of Y also, then Z cannot hold Y liable afterward, because he despite knowing the status of the parties, choose to continue with the contract, with X as a principal. But in case Z knew that X is only an agent, but did not know the identity of his principal, and if later discovers the identity of X’s principal, he may choose either to hold X (agent) or Y (principal) liable in the case of a breach.

Provisions under Indian law

An undisclosed principal is a person whose identity is known by the third party. In the eyes of the third party, the agent is the principal. There are some rights and liabilities which are imposed on the undisclosed principal by the law. These rights and liabilities are imposed on him, even when he is not made a party to the contact. The concept of undisclosed principal is an exception to the rule that only a party to the contract can be sued or can sue.[2]

Agent and Undisclosed Principal

The relationship between an undisclosed principal and agent is the same as that of the relationship between a disclosed principal and an agent. In a case where the principal is undisclosed, the agents act as a trustee. Even though the contract is entered into in the name of the agent, he is answerable to the principal. The agent is under an obligation to disclose to the principal about any benefit which has been earned, any payment which has been made, etc.

Third Party and Undisclosed Principal

Two conditions are to be satisfied before the undisclosed principal can enforce any right (or incur any liability, in case the third party subsequently gets to know the identity of the principal and choose to hold him liable)-

• The agent must have an express or implied authority from the principal to enter into a contract with the third party
• The agent enters into the third party not for his own benefit, but for the benefit of the undisclosed principal.

Rules governing rights and liabilities between an undisclosed principal and third party[3]

1. Generally, an undisclosed principal can be sued by the third part, or he can sue the third party, except in some exceptional circumstances.
2. An undisclosed principal remains liable towards the third party with regards price of services rendered or goods sold under the law of contract, even when it wasentered into in the name of the agent. He wouldn’t be discharged if he has instructed the agent to make payment to the third party and the agent does not make the payment.
3. In case, the identity of the principle becomes known to the third party, and any subsequent breach takes place, the third party can choose either to sue the agent or the disclosed principle.
4. There are a few cases where the disclosed principle can’t be sued by the third party in case of breach of a contract. There are cases where the identity of the parties is very material to the formation of the contract. For instance-
   • A contract which requires personal services or skills cannot be performed by an undisclosed principle. For example, a concert which is to be performed by a singer, or a show which is to be hosted by a host cannot be done by an undisclosed agent, because the third party enters into the contract on the basis of the reputation of the person.
   • Where a third party enters into a contract with the agent of the undisclosed principal to lend some money to the agent in the personal capacity, it cannot be enforced by the undisclosed agent.
   • Where the agent and the undisclosed principal is aware of the fact that the opposite party will not enter into a contract with the undisclosed principal, the undisclosed principal cannot use an agent to enter into the contract with the third party.

In a case where the principal wants the contract to be performed, he can do so only subject to the rights and the liabilities which subsist between the third party and the agent. In the case where the agent into a contract with a third party without disclosing the name of the principal and the third party is ignorant of the identity of the principal, and enters into the contract believing that the agent himself is the principal, the rights of the third party is protected. This is because he entered into a contract with the agent in good faith without having any idea that some other party is also involved in the contract. Section 232[4] of the Indian Contract Act stats that when the third party enters into a contract with the opposite party, without knowing or suspecting that he is the agent (who is acting on the behalf on an undisclosed principal, and portrays himself as the principal), then if the undisclosed principal wants the contract to be performed, he can enforce the contract only on the basis of the rights and obligation which is existing between the agent and the third party.

For instance, X owes Rs 1000 to Y. X then enters into a contract with Y to sell him goods worth Rs 2000. X enters into the contract on behalf of Z, whose name X does not disclose and enters into the contract as if he himself is the principal. Y has no knowledge about Z’s identity. In such a case Y can set-off the amount that X owes him and Z cannot compel Y to purchase the rice without setting off the amount of the debt.

Section 231 of the Indian Contract Act[5] states that the third party will have same rights against the principal as the party would have had against the agent if the agent were the principal. In a case where the identity of the principal is revealed before the contract has been executed, then the third party may refuse to perform his part of the contract if he can satisfactorily show that if he had known the identity of the principal, he wouldn’t have entered into the contract. Also, when the identity of the principal becomes known, the third party may choose either to sue the principal or the agent. But if the third party chooses any of the parties and fails to recover the damages, he cannot sue the other party subsequently. In the case where the third party is sued by the undisclosed principal or enters into any settlement with the third party, the third party can’t be subsequently sued by the agent. The law recognizes the fact that when the rights of the undisclosed principal are in question, he is at an advantage compared to the third party.

Footnotes:

[1]Violett v. Powell’s Adm’rs, 10 B. Monr. 347

[2]http://www.eaa.org.hk/en-us/Information-Centre/Publications/Agency-Law/-10-Undisclosed-principals

[3]http://www.lawctopus.com/academike/rights-liabilities-undisclosed-principal-agency/

[4]http://www.vakilno1.com/bareacts/indiancontractact/indiancontractact.html#182_8220Agent8221_and_8220principal8221_defined8211

[5]idid

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In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University writes about securitization in the international market. The post discusses the advantages and issues involved in international securitization.

Securitization has emerged as a growing trend worldwide. Many companies securitize their transaction to segregate the risks or illiquid into marketable securities. When securitization becomes international, there are a lot of issues involved. For instance, suppose, an Indian company raises fund in the Indian capital market itself to float its securities, then there will be no major issues. But if the same Indian company wants to float its securities in the US or European Capital market, it’ll not only have to comply with the law which is there in India, but it’ll also have to comply with the laws of the specific foreign capital market. With many companies going global, and the securities market in their own country not developed fully, they look to exploit the international market.

What is Securitization?

Securitization can be defined as a process through which risk and illiquid assets are liquidated into tangible and marketable securities. In this process, an entity deconstructs its assets and turns them into marketable securities. The process of securitization includes setting up of a separate entity known as a Special Purpose Vehicle (SPV). The assets of the company are then transferred to this SPV, and the SPV issues securities to and raises funds from the market.[1] These funds are procured from the market at a lower cost and investors also get the benefit of holding these securities at a lower risk. The assets are transferred to the SVP to reduce the chances of bankruptcy. The company which transfers the assets is known as originators. The assets are known as receivables and the entity which receives the assets are known asobligors. The transfer is done in such a way that it is considered to be a sale in the eyes of the law because in that case the assets are not shown any more in the originator’s bankruptcy estate. This ensures that the transferred assets cannot be claimed by the creditors in case of bankruptcy. Sometimes the assets are also transferred through secured loans, instead of a sale, which further reduces the cost of transacting.[2] The SPV should be an independent and separate legal entity from the originator. Special care should be taken to structure the SPV in such a way that the chances of the SPV going bankrupt are minimal. In the unfortunate case that the originator becomes bankrupt, the SPV should be sheltered.[3] After the SPV issue securities and raise funds, they transfer these funds to the originator company as consideration for the sale of the assets or the loan which has been taken.

Advantages of Securitization

Efficient Generation of Funds

By transferring the assets to an SPV, the originator separates its assets and liabilities, which enables it to raise the fund at a lower cost, as compared to the cost of issuing securities if the originator had done it directly.

Compliance with Capital-adequacy Standards

Compliance-adequacy standards are important in the case of financial institutions and banks. They are required to maintain risk-based capital. Thus, when any asset is transferred to the SVP, such as a secured loan, and it is shown as an asset in the financial statement of the bank, it would lower the capital level which must be maintained, and the bank or the financial institution would be able to raise funds effectively.

Compliance with maximum limit of debt

Many times, companies are restricted from securing debts beyond a specified limit. By transferring the assets to the SPV and then raising the debts through them, the company would be able to raise further debts without crossing the restricted limit.

Credit Exposure

When funds are raised through the SPV, they are also able to limit the credit exposure to risks.  The securitization of the assets and risks will help the entity in diversifying its portfolio and thereby reduce the risks associated with credit.

Cross-Border Securitization

Cross-border securitization is also known as international securitization. Cross-border securitization is generally done because of the opportunities provided by the international market. It is also done when the capital market of the originator company is not fully developed. The general structure which is followed in a cross-border transaction is that the originator has the headquarters in one country. The assets of the originator are purchased by a special purpose entity, belonging to the country where the originator wants to float its securities. Thus, the payers or the obligors are situated outside the country. The receivable are denominated in the same currency as the securities and then the special entity receives the payment directly from the payers. The distribution to the investors is also made by the special entity.[4]

Jurisdictional framework involved in Cross-border Securitization

When any cross-border securitization is undertaken, two things are to be considered. The first is to determine the jurisdiction of the transactions and the second is to determine the jurisdiction of the seeking the finances. There are various factors which affect these considerations, like tax implication in that nation, the stability of the government in the country, the services the country provided to the companies and investors, socio-economic status of the people living in the country, strictness of rules and regulation in the country, etc. For instance, the capital market in the US is an excellent source of raising finance because of the efficient pricing and diversified customer base. But the compliance level and disclosure levels are very high, which may not be possible for a company. Comparing this with the Capital Market in some of the European countries, it can be observed that their compliance and disclosure levels are not too high, and are flexible. But they have a limited investor base.

The second issue which the companies have to consider is to see the law applicable in a particular country. Ascertaining which law will be applicable in a case of cross-border securitization across which jurisdiction is crucial since different countries may have different laws relating to the capital market and the companies.

Issues involved in Cross-border Securitization

Commercial financial issue

It is important that the interest of the SPV is secured from the creditors of the originator.

• Perfection – the phrase “perfection’ means protecting the interest of the transferee entity from the creditors of the transferor.[5] There are various ways in which the interest of the transferee company can be perfected. It can be through public notice system or notification.
• Priority- Priority can be defined as a ranking of multiple claims against a specifically transferred asset. In the case of an SPV, priority means ranking the claim of the SPV higher than the claim of any other third party.
• Commingling- one more risk in case of securitizationis that the proceeds received from the floating or securities and the originator’s own fund may be merged. In situations where the originator company is freely allowed to use the proceeds collected by the SPV for its own purpose, the law may find that the actions of the originator are in conflict with the claim of the SPV that they have a perfect interest in the funds.

Enforcement issues

Having a theoretical law is not enough for a company to go through with a transaction. It is important that these rights can be enforced also. When a legal system grants any rights, it is not necessary that they can be enforced also. In many cases, foreigners are not favored a bit less than the local citizens when it comes to the enforcement of rights. The originator and the SPV may have to submit to the jurisdiction of the country where they want to float their securities.[6]

Foreign Currency issue

In any international transaction, currency issues are always there. In the case of international securitization, the currency in which the investors buys the securities may be different from the currency in which the SPV repays them. So foreign exchange regulation have to be considered by the originator and the SPV before securitization. There is also a risk of fluctuation in the currency rates which the company may have to face.

Taxation issues

There are some major taxation issues which are involved in the case of international securitization.

• Withholding Tax – Payments which are considered as interest may be considered for income tax purposes as withholding tax under certain jurisdictions. In case of international securitization, interest payment can take place in the following ways-
• If the obligors who are in a different country pay interest for the receivable to the originator company, which is located in a different country, the payment made will be may be subjected to withholding tax, in the country in which the obligors are.
• If the transfer of assets between the originator and the SPV is considered as a secured loan, the tax authorities may subject it to withholding taxes, and tax on interest paid on the loan will be collected from the company.
• Taxation of the SPV- When the SPV collect the money of the securities, they can also be subjected to certain taxes.
• Taxation of the investor- Investors can also be subjected to withholding tax in the case of international securitization. These taxes depends on the jurisdiction under whose authority the investor is residing.

Concluding Remarks

Securitization allows companies to raise funds at a lower cost and without going beyond the permissible level of debts. But when securitization is done internationally, the jurisdiction and law applicable in the particular country should be given special consideration. The socio-economic and political factors of the country should also be kept in mind before securitization. This will help the companies to carry out the process of securitization uniformly.

Footnotes:

[1]Claire A. Hill, Securitization: A Law Cost sweetener for Lemons, 74 Wash. U.L.Q, 1061 (1996).

[2]Peter Pantaloe, Rethinking the role of Recourse in the sale of Financial Assets, 52 Bus. L. R 159 (1996)

[3]Shenker&Colletta, Asset Securitization – Evolution, Current Issues and New frontiers, 69 Tax. L. Rev. 1369(1991).

[4]Yuliya A. Dvorak, Transplanting Asset Securitization: Is the Grass Green enough on the other side? 38 Hous. L. Rev. 541 (2001).

[5]Steven L. Schwarcz, Symposium: The Impact on Securitization of Revised UCC Article 9,74 Chi.-Kent L. Rev. 947, 953 (1999).

[6]Thomas C. Mitchell, The Negative Pledge Clause and the Classification of Financing Devices: A Question of Perspective, First Instalment, 60 Am. Bankr. L.J. 153 (1986).

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In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University writes about the scope of enforcement of Directive Principles of State Policies (DPSP) and looks into the relation between DPSPs and Fundamental Rights. The post further talks about the legislative intent of the framers of the Constitution regarding the issue of enforcement of DPSPs.

There is no denying the fact that the responsibility of the development of the country lies with the government. And with the aim of development in view, the government forms certain policies. The Directive Principles of State Policy (DPSPs) act as the guiding steps for the government to forms the policies. The belief that the rulers and masters are responsible for the welfare of the society has been prevalent in India for a long time. The formation of the Constituent Assembly also took place amid such an environment. Article 36 to Article 51 which are enshrined in Part IV of the Constitution form the core of the DPSPs.[1] These Articles are to be taken into consideration by the government and the legislature when they carry out the legislative work. But the DPSPs are not enforceable, quite unlike the Fundamental Rights which are enshrined in Part III of the Constitution.

The DPSPs not only act as the guiding principles in making policy decisions, but they also lay down the objectives of India as a nation. The presence of the DPSPs makes India a welfare state.[2] The DPSPs encourages the government and the legislature to promote the welfare of the citizens and the society. Apart from this the DPSPs also seeks to ensure that there is economic and social democracy in our nation, as has been promised by the Preamble.[3] The main aim of the DPSP is to maintain a socialistic pattern in the society. The thing that is to be noted here is that the Constitution does not support any extremities like total socialism or total individualism.

The Nature of the DPSPs is explained by Article 37 of the Constitution. Article 37 states that the provisions given under Part IV of the Constitution cannot be enforced in the Court of law, but it is the duty of the government of the nation to consider these principles in the governance of the country because these articles are fundamental in ensuring good governance of the country. Non-enforceability of these articles in the Court does not make them useless. These principles have an educative value and also help the nation to maintain its “welfare state” status. These principles also help the Judiciary to interpret different statutes and also the Fundamental Rights which has been guaranteed by the Constitution. In the judicial pronouncement of Air India Statutory Corporation v United Labor Union,[4] the Apex Court opined that the DPSPs are the harbingers of the Right to Development. The Court considered the Principles as an integral part of the Constitution and stated that they are absolute to the fundamental human rights.

Relation of DPSPs with Fundamental Rights

When talking about DPSPs, the main question which arises is that how compatible are they with the Fundamental rights which are enforceable in the Court of law through different kind of writs. There are several differences between the DPSPs and the Fundamental Rights-

• On one hand where the DPSs act as the guiding principles in the formation of policies, on the other hand, the Fundamental Rights can be said to be a limitation of the powers of the Government. There are several Rights which has been guaranteed by the Constitution, which cannot be revoked even by the State.
• The principle stated under Article 36 to Article 51 cannot be violated by the State or any individual since they are not enforceable. But if any Fundamental Right is being violated, a person can go to the Court of law to seek a remedy.
• Any law which is in conflict with the Fundamental Rights can be declared void or unconstitutional by the Courts, but this is not the case with DPSPs.

When the question of priority arises between DPSPs and Fundamental Rights, there are several conflict over the issue. The judicial decisions have also been varying over the years. In the case of State of Madras v. Champakan Dorairajan,[5] the Apex Court stated that if any law is in violation of the Fundamental Rights, such law will be considered unconstitutional, but this stand will not be taken if any valid law contravenes the DPSPs. Thus, it can be said that Fundamental Rights were given more priority over the DPSPs. But this proposition was changed with the help of Constitutional (42^nd Amendment) Act, 1976. The scope of Article 31C was broadened which stated that if any law is made to implement the DPSPs, it’ll not be held unconstitutional on the grounds that it violated Article 14 and Article 19. But again in the landmark judicial pronouncement of Minerva Mills v Union of India,[6] the broadening of the scope of Article 31C was struck down by the Court. The Court was of the opinion that the balance Fundamental Rights and the DPSPs have to be maintained as they are complimentary to each other, and the legislature should look into the harmonious construction of the two.

Framers of the Constitution and their views[7]

The enforceability of DPSPs is a very debatable topic. H. M. Seervai stated that if the Fundamental Rights were ever struck down by the Courts, the effects would be catastrophic. But this wouldn’t be the case if DPSPs were struck down.[8] Nevertheless, these Principles found their support within the Constituent Assembly with many notable figures like B. N. Rau, K. T. Shah, and B. R. Ambedkar defending the inclusion of the Directive Principles in the Constitution. B. N Rau believed that these principles, for the purpose of greater good, can occasionally invade individual rights. K.T. Shah and B. R. Ambedkar were also great supporters of the DPSPs and the looked at the principles from a Socialistic view.[9] The question which arises at this point is that when the Constituent Assembly, in a general sense supported the inclusion of DPSPs, why were they not made enforceable, and only included as guiding principle?

There are two reasons which can be stated as regards to this question. First of all, the Assembly feared that these Principles could become outdated with the change in time. Secondly, at the time of Independence and adoption of the Constitution, India did not have a lot of resources so as to make all the DPSPs enforceable. It was left to the government to follow then voluntarily.[10]

Enforcement of DPSPs?

Why the DPSPs were not made enforceable by the Constituent Assembly has been mentioned above. But non-enforceability of the Principles does not mean that they are of no use. Arguments have been given both in favor and against of making the DPSPs enforceable. Those who favor the enforcement of the Principles argue that enforceability of DPSPs will keep in check the autocratic tendencies of a government. The enforcement of the Principles can also help to unite India. For instance, Article 44 of the Constitution talks about a Uniform Civil Code. The Uniform Civil Code aims for uniform provisions of civil law for all the citizens of the country irrespective of their caste, religion or beliefs, much like the criminal law.

Those who are against the enforcement of the DPSPs say that the Principles need not be separately enforced as there are many policies and laws which already implement these principles indirectly. For instance, Article 40 of the Constitution which talks about Panchayati Raj was introduced through a constitutional amendment, and it is very evident that there are numerous panchayats in the country today. Article 47 speaks about raising the standard of living of the people in the society. For that too, various policies are in place. Similarly, there are other Articles also like Article 39(a) which speaks about providing adequate means of livelihood to the people, and Article 39(g) which states that government shall endeavor to prevent exploitation of children, for which the government has already introduced different policies. Another argument which has been given against the enforcement of the DPSPs is that it try to impose moral values on the citizens. It is important to understand that law and morals are separate things, and imposing morals on the citizens is not within the scope of the law. Too much moral values can sometimes impede the growth of society.

Concluding Remarks

There is still no clear cut answer as to whether the DPSPs should be made enforceable or not. Keeping in mind the position of the Principles, even without enforcement in the Court of law, it can be said that they are not useless. Making them enforceable will make the system too rigid, as certain Principle may change over time. They do keep a check on the anarchist ways of a government indirectly, not through Courts but through the citizens of the nation. The Principles stated in the Constitution often act as a yardstick to measure the effectiveness of a government. Also, these DPSPs are implemented through various other legislations and policies. If they are made enforceable, it may lead to abuse of these Principles. The Courts also supports the proposition that there should be a balance and harmonious construction between the DPSPs and the Fundamental Rights, which can be done even without enforcing the DPSPs.

Footnotes:

[1]http://indiacode.nic.in/coiweb/coifiles/p04.htm

[2]http://www.legalservicesindia.com/article/article/concept-of-welfare-state-and-its-relevance-in-indian-scenario-507-1.html

[3]http://lawmin.nic.in/olwing/coi/coi-english/Const.Pock%202Pg.Rom8Fsss(3).pdf

[4]AIR 1997 SC 645

[5](1951) SCR 523 (531)

[6]AIR 1980 SC 1789

[7]http://www.lawctopus.com/academike/scope-of-enforcement-of-dpsps/

[8] Constitutional Law of India (Volume 2), 1921

[9] Granville Austin, The Indian Constitution: Cornerstone of a Nation

[10]http://logos.nationalinterest.in/2014/07/constituent-assembly-debate-on-directive-principles-of-state-policy/

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In this Blog Post, Abhiraj Thakur, a student of NALSAR University of Law writes about a recent phenomenon in the corporate world, i.e.  Brandjacking.

Brandjacking

As the name suggests, it is made up of combining two words: Brand + Hijacking. The social network, while bringing people together also makes them vulnerable to a large number of threats. As the technology is rapidly advancing, so are the different techniques through which people often engage in unscrupulous activities and misuse the global connection. Brandjacking is a relatively new term that for the first time came into limelight eight years back. In colloquial terms, brandjacking can be referred as an unauthorized takeover of someone’s online identity by some other person. Today many companies of the world are present on social media platforms such as Facebook and Twitter; they actively advertise their products on these platforms. Brandjacking occurs when a particular advertisement, feature, quality, etc. of a product is used by some unknown party to gain commercial benefit. The unknown parties make use of the ‘Brand name’ of foe company self-benefits. In many cases, brandjacking is done to make illegal benefits but many times it is done for other malicious and hostile reasons. The effects of brandjacking on the host company (brand jacked) are many; it may range from huge financial losses to facing the wrath of negative publicity and losing the consumer base in the long run. Thus Brandjacking today has become a major issue in the corporate arena.

Brand Assassins

There are many hacking communities today which carry out brandjacking on monetary terms, by charging the suitable fees these people infiltrate the account of the targeted company and manipulate it as desired by the customer. These people are popularly referred to as ‘Brand Assassins’. These people usually operate through intermediaries and so most often can avoid the clutches of Law.

Forms of Brandjacking

Total Takeover

This is the most common form of brandjacking that occurs today. It is also the most dangerous one. The total takeover is done through hacking into the account of targeted company; it is also done through phishing. The most famous instance of a total takeover was in 2013 when the Twitter account of Burger King was hacked and revamped with the branding of McDonald’s. This type of brandjacking is considered the most dangerous as because the damage is imminent as the messages from the hacked account are transferred immediately to the followers. As in the Burger King’s case, the advertisements and other promotional activities were rebranded as McDonalds and so it resulted in negative publicity for the brand.

Impersonation

Impersonation is done maliciously to bring losses to the targeted company. This is done by all together eliminating the account of the target and then setting up a new account is made taking distinct and unique features of the deleted account. The product is thus rebranded under a different name. This is done to gather huge consumer base in the short span of time, taking unfair advantage of the brand name of the targeted company.

Ways in Which brandjacking is done on different social media

Facebook: It is done by hacking the profile of target or making a new account. The brand assassins start carrying out activities under the umbrella of the fake account; these activities may include such as posting false reviews of the product, making false surveys for the brand or messaging the followers directly about the product. These fake accounts also start answering consumer queries; this causes huge losses to the company. In 2013, a fake a Facebook account in the name of ExonnMobil was opened that claimed to represent views of the company and started posting false allegations such as making under quality product on the company.

Twitter: It is done through fake tweeting on behalf on behalf of the company and using false hash tags. Also is sometimes seen that viral hash tags are made by hackers to lure a large number of consumers in a short span of time. In 2010 a fake Twitter account started posting fake tweets on behalf of British Petroleum, these tweets ranged from false allegations of corruption in the company to an official apology for Deep Horizon oil spill incident.

The problem with social media is due to time constraints people seldom go into the details of the news and mostly believe what they see on hand.

What to do when brand jacked?

If a company feels that it is brandjacking on a particular social site. It has the right to contact the servers of the site and get the account seized as soon as possible. Most of the social media houses today have the policy of seizure of account when found indulged in malpractices. For this to happen the Brand alleging to have been the brand jacked need to prove itself to be the genuine party.

Brandjacking and Indian Laws

There is no specific recognition of brandjacking under Indian laws as of today. However, the Indian courts on few occasions have dealt with allegations of brandjacking. In the case of Yahoo! Inc. v. Akash Arora and Another, The plaintiffs Yahoo Inc. alleged unauthorized usage of their domain name to provide internet related services and not the internet itself. The Delhi High Court ruled for Yahoo considering the usage of the domain name as unauthorized exploitation of the brand name of the company and granted then compensation. This case brought into highlight the need for specific laws in the country to protect Brand names on the Internet.

After that in many cases, the courts have recognized spamming. Phishing and other internet malpractices but not brandjacking. In cases dealing with usage of the brand name, the courts have awarded compensation for infringement of trademarks under the IP laws.

How to prevent Brandjacking?

Through Intellectual Property laws

Registering the product under copyright and trademark: It is the best method to avoid brandjacking. Having trademark for any specific aspect of the product makes any unauthorized usage of it a punishable offense under the IP laws in India. By the virtue of Section 2(1) of the Indian Trade Marks Act, 2000, one can have trademark registration of any “symbol/sign capable of distinguishing goods and services of one person from another, any word (including personal names), design, numerals and shape of goods or their packaging as trademark. Courts in India have accorded protection to product titles, advertisements and names under the trademark law in the past.

In the case of Star India Private Ltd. v. Leo Burnett India Pvt. Ltd, The plaintiffs star India alleged that a commercial made by the defendant company that of a detergent was very much similar to one of the then operating soap operas of the channel. Star already had copyright of the show and thus alleged infringement of copyright. This was the first case that dealt with character merchandising in India. The court did not award damages to the plaintiff as the courts are not aware of brandjacking. However, the jurisprudence has grown over past years. Also, new laws in the field of Information technology are helping to take strict measures to curb the practice of brandjacking. The 2008 amendment to the IT Act 2000 helps in taking down fake accounts operated in the name of the target company.

Through use of Search Engines and other protection software

Today there are many powerful search engines in the market that can help a corporate when brandjacking. These search engines can sort up and present all the references of a company’s name, product’s name over a particular period. This becomes helpful in stopping the rapid spread of false information on the internet. There is also software available that can accurately track down the sources of these references, and can prove helpful in finding the culprit. Some of such software are Social Sentry and Postrank.

Having Safety Precautions in Place

It is necessary for corporate of today have certain guidelines dealing with their presence on social media. Having an eagles’ eye on the people responsible for the brand presence of the company on the internet is necessary. Trusted hands shall be given this duty. Having knowledge of the extent of the presence of the company on different social networks is desirable. Many corporates today have active brand management units that look after and regulate the presence of the company on social media. Lastly having internal vigilance for a corporate is necessary.

 Effective Use of Social Media

Many companies active on social media platforms today try to build a community of followers. This is done to strengthen the brand name in the long run and have a network of loyal customers who can be in times of brandjacking help in mitigating the downfall of the brand.

Conclusive remarks

Brandjacking is popularly called the ‘latest corporate crisis,’ in has caught eyes of many in recent times. In the fast-expanding era of internet, such practices pose threat free market practices. Today in our country we see new start-ups every other day, these start-ups are creations of human mind and sound application of skills and provide an incentive for the youth to do something new. Malpractices such as brandjacking can prove detrimental to this incentive if gone unchecked.

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In this blog post, Soumya Deshawar, a student of the University of Petroleum and Energy Studies, Dehradun, enumerates the steps for the registration of Trademarks in India. The post further provides the steps for the online search of a trademark, in detail with screenshots for the help of the readers. Also, the process of filing the opposition for the trademark has been provided in this blog post.

Steps for Registeration of a Trademark in Inida

Step 1: An application for the registration of a trademark is to be filed before the Registrar of Trademark. It should be filed at the Head Office or the Branch Office of the Trademark Registry Office corresponding to the place where the applicant carries on his/her business.  Then, the application is digitalized and formally checked.

The Trademark Registries in India are in Delhi, Chennai, Mumbai, Kolkata and Ahmedabad.

Step 2: The mark to be registered is then examined as to whether it is capable of being distinguished, whether or not it has been prohibited for registration by any law in force for the time being, whether the registration of such mark will cause confusion in minds of people due to the existence of a similar mark or not. The examination of all the applications for trademark registration is done at the head office of the Trademark Registry in Mumbai.

Step 3: The proprietor of a business can file an application for use by himself or by his business. It can be filed either in the name of the proprietor or in the name of the business.

Step 4: The class under which the proprietor wants his goods/services to be defined should be mentioned by him. This is done in accordance with the Fourth Schedule of the Trademarks Rules, 2002.

Step 5: The Registrar decides whether the application should be accepted for registration or not, and any evidence of use or distinctiveness. If accepted, he publishes it in the Trade Marks Journal, an official gazette of the Trade Marks Registry that is hosted weekly on the official website. The registrar’s decision is appealable to the Intellectual Property Appellate Board.

Step 6: The final step includes the payment of fees for the relevant trademark registration by the applicant.

The present fees for the application of a trademark, is INR 4,000. Also, the fees for expediting the examination of a mark, is INR 20,000 at present.

Following are the forms that are submitted with fees by the applicant in different cases (as mentioned):

• Form TM-1: Application to register a trademark for a specification of goods or services included one class.
• Form TM-2: Application to register a trademark for goods or services included in a class from a convention country.
• Form TM-51: Application for the registration of trademark of goods or services falling under different classes
• Form TM-52: Application for the registration of a trademark of goods and services from a convention country, falling under different classes.

Process for the Search of Trademark

The search of trademark in India may be done online by following the steps given below:

• Go to the website: http://ipindia.nic.in/ . This is the website of CGPDT of India.

• Select the option ‘Trademarks’ under the head ‘Public Search’.

• The following screen will be obtained.

• Now, in the “Wordmark” column, write the starting words of your mark that you want to search.

• Under the “Class” column, mention the class in which your good or service lies.

• The class number looked up for in the “Classification of Goods and Services” under the head “Resources” on the CGPDT website or, you can directly look up for it on the website: http://www.wipo.int/classifications/nivilo/nice/index.htm?lang=EN

• Now, you will get to a page (as shown below) where all the names starting with your mentioned letters and class in the search will be displayed. You may go through the list one by one, or you may select all the marks by ticking the box on the left of the head “S.No”.

• After this, scroll to the bottom of the page, and select the option “Report”. This will generate an instant report of the available similar/identical marks as shown below.

• Now, you can search your mark easily by the “find on page.”
• If you find a similar or identical mark, then:
  • If the mark is “Objected” or “Applied for,” then it is difficult to register your mark, and you should probably think of some other word for your goods or services. If the mark is “Registered”, then your mark can never get registered.
  • On the other hand, if the goods or services listed in the matching mark, then there are possibilities of your mark getting registered if the mark you have applied for is not a well-known mark.

Filing An Opposition

The Trademarks Act, 1999 provides that any person can file an opposition against a trademark within a period of three months from the date when the trademark is advertised or re-advertised in the journal. The notice of opposition can be filed with evidence, if any, along with the application.

An application for trademark registration can be opposed on relative or absolute grounds of refusal, as provided in sections 9 and 11 of the Trademarks Act, 1999.

Addresses of Trademark Registry offices in India:

Trade Mark Registry Office, Ahmedabad

15/27 National Chambers, 1st Floor
Ashram Road
Ahmedabad-380 009

Telephone: +(91 79) 26580567

Telefax: +(91 79) 26587163

E-mail address: ahmedabad.tmr@nic.in

Trade Marks Registry, Mumbai

Trade Marks Registry

Boudhik Sampada Bhawan

S.M.Rroad, Antop Hill,

Mumbai 400 037

Telephone: +(91 22) 24137701

E-mail address: mumbai.tmr@nic.in

Trademark Registration Office, Chennai

Assistant Registrar of Trade Marks
Trade Marks Registry,
Intellectual Property Office Building
G.S.T. Road, Guindy, Chennai 600032,
Ph : 044-2321992, 22322441, 22322442
Fax:044-24314751
Email: tmrchebr@md3.vsnl.net.in

Intellectual Property Office, Delhi

Intellectual Property Office Building,
Plot No. 32, Sector 14, Dwarka,
New Delhi-110075,
Phone : 011-28034304, 28034305 28034306
FAX:011-28034301, 28034302
Email: delhi-patent@nic.in

Intellectual Property Office, Kolkata
Intellectual Property Office Building,
CP-2 Sector V, Salt Lake City,
Kolkata-700091,
Phone : 23671945, 1946, 1987,
FAX-033-2367-1988,
Email:- kolkata-patent@nic.in

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In this blog post, Shubham Khunteta, a student of National Law University Odisha, Cuttack, discusses about Ordinances- from its promulgation, repromulgation and validity, to its relevance, advantages and disadvantages in independent India.

There are times when some temporary law is required to be passed with the objective of accessing and gaining some power over an area and regulate it immediately. Due to the parliament or state legislature not being in session at that particular time, such legislative powers are required to be exercised as a matter of urgency by some other competent authority such as the President, as the head of the Union. Furthermore, this power to promulgate an Ordinance conferred on the President is co-extensive with the power of Parliament to make laws and the President cannot issue an Ordinance which the Parliament cannot enact into a law.

Ordinance-making power is not a new feature added to the Indian Constitution. Articles 42 and 43 of the Government of India Act, 1935, gave equivalent powers to the Governor General. Members of the Constituent Assembly, having experience of misuse of such power, were justifiably cautious while including the same in the Constitution. Both Hriday Nath Kunzru and Professor K.T. Shah called for restricting the executive’s power to promulgate ordinances through greater oversight by legislatures. They were, however, overruled by Dr B.R. Ambedkar, who stated that ordinance-making powers were indispensable since the existing law at any time, might be incapable of dealing with a situation “which may suddenly and immediately arise”[1]. According to him, the only solution was to “…confer upon the President the control to promulgate a law which will assist the executive to deal with that particular situation because it cannot resort to the ordinary course of law…” when the legislature was not in session.

Ordinances can be said to be the fruits of executive power of law-making. As we are aware that the Parliament consists of the Lok sabha, the Rajya Sabha and the President, where President is the ultimate signatory to any bill passed by the Parliament to make it an Act, similar is the case with an Ordinance issued by the Government which needs to be signed by the President before it can be effective as law.

Issue of Ordinance and its Conversion into Law

Ordinances are issued by the Central government and the State Government concerning matters they have the power to deal with. These ordinances have to be signed by the President[2] and the Governor respectively to promulgate it or give it the enforcing and implementing power of the law, but the Governor shall not, without instructions from the President, promulgate any such Ordinance if-

(a) A Bill containing the same provisions would under this Constitution have required the previous sanction of the President for the introduction thereof into the Legislature; or

(b) He would have deemed it necessary to reserve a Bill containing the same provisions for the consideration of the President; or

(c) An Act of the Legislature of the State containing the same provisions would under this Constitution have been invalid unless, having been reserved for the consideration of the President; it had received the assent of the President[3].

Validity of the Ordinance

Ordinance passed by the executive has the same effect as that of an Act passed by the Parliament under Art 123(2) or a state legislature under Art 213(2). After this conclusion, the next question that arises is – Whether an ordinance can be struck down on the ground of non-application of mind or mala fides or that the present circumstances didn’t warrant the issue of the Ordinance?

The answer to the question was given by the Court in A.K. Roy v. Union of India[4] that the legislative power is subject only to the limitations prescribed under the Constitution and no other. So, if any law is passed by legislature which it is not competent to be so passed and which is violative of Part III of the Indian Constitution, it is ineffective.

It can be thus understood from the interpretation of the court of Art 123 and Art 213 of the Indian constitution, that ordinance making power of the executive is a legislative power and not an executive action or administrative decision. Thereby, it is assumed by the Courts that legislative discretion is properly exercised and that the propriety, expediency and necessity of a legislative act are for the determination of the legislative authority and of the courts; therefore keeping the motives of the executive beyond judicial scrutiny. So, power can be said to be plenary and there are no limitations on such power as that of the legislature except those to which the legislative power of the legislature is subject to.[5]

As an Ordinance stands on the same footing as that of an act of the Parliament, an ordinance should be arrayed with all the attributes of an Act of legislature, carrying with it all its incidents, immunities and limitations under the Constitution  There is however, a limitation to the aforesaid power wherein it is laid down that every such Ordinance promulgated by the President must be placed before both the Houses both its approval and that it would cease to operate at the expiration of six weeks from the re-assembly of the Parliament or if before the expiration of that period a resolution disapproving it is passed by both the Houses.[6] Similar is the case with an Ordinance passed by the State Legislature.

It can be inferred from above that any act done by the Executive or a State Legislature during the validity of the Ordinance would remain valid for all purposes even after the expiration of Ordinance unless it is brought down by the legislature to nullify the effect of such Ordinance Thus, rights created by the ordinance last even after the expiry of the Ordinance.

When can ordinances be issued?

As already stated above, an ordinance is temporary law, which requires to be approved by the Parliament or a State Legislature, as the case may be, within 6 weeks of the reassembly of legislature. Such temporary laws which are passed to maintain flexibility in the affairs of public importance at the time of emerging, extraordinary and immediate need for the passage of such law are called Ordinances and they have the same effect as that of an Act passed by the Parliament or a State Legislature. The question that arise now –

What is the ambit of ‘extraordinary, immediate need and urgency’ to promulgate an ordinance by the Executive bypassing the Parliament and a State Legislature?

Immediate need as stipulated in various ordinances-

Food security Ordinance 2011:

This Ordinance was promulgated with the objective to guarantee food and nutritional security and providing certain minimum foodgrains at the rate of Rs 1-3/kg to around 75% of the rural population and 50% of urban population and to provide cash in case the state fails to ensure such food supply. Since the Parliament was not in session to pass an Act, thereby it was taken to be an immediate need to provide food to the swarming millions of people by the promulgating of this ordinance.

Telecom Regulatory Authority of India (Amendment) Ordinance, 1997[7]:

This ordinance was promulgated to bring into existence TRAI with the objective as stated by the Minister in parliament being, “… we were facing difficulties in attracting private investment without an authority like the TRAI. Private investors… were not convinced about our ongoing processes of privatization and liberalization.” Important as it is to send out a signal of commitment towards a particular government policy, in this case liberalization of the telecommunications sector, it is hard to make the case that had immediate action by promulgating an ordinance. Had this action not been taken, private investment in the telecommunications sector would never have happened.[8]

The Securitization and Reconstruction of Financial assets and Enforcement of Security Ordinance (SARFAESI), 2002:

The then Minister for Finance and Company Affairs said one factor that forced the promulgation of the ordinance was the time that was being taken by the Standing Committee concerned to finalize its views on the Bill.

The National Tax Tribunal Ordinance promulgated in 2003

This was because various committees had recommended that such a tribunal be established, and as “…huge revenue is blocked in litigation because of pendency of appeal and reference is before the High Court, which has adverse effect on the national economy”.

Ancient Monuments and Archaeological Sites and Remains (Amendment and Validation) Ordinance, 2010[9]:

It was promulgated to meet a deadline imposed by the Delhi High Court[10] and to make provisions for validation of certain action taken by the central government for public purpose.

National Eligibility-cum-entrance test (NEET) ordinance 2016[11]:

This ordinance was issued to overturn the Supreme Court order of conducting national level medical test for admission in reputed medical colleges from July 2016 and to defer such test to the year 2017 so that states can have a 1-year preparation period beforehand and students don’t get affected with such immediate conducting of the tests. The ordinance was promulgated on 24/5/2016[12].

Repromulgation of Ordinance

The Delhi High Court, in the case of Gyanendra Kumar and Anr. v. Union of India[13] and Ors, held that the repromulgation of ordinance by the government does not smack off unconstitutionality due to the following reasons-

1. The Executive in the session of parliament laid the bills same in contents as the Ordinances, which, due to the overload of work in the parliament couldn’t come up for discussion, thereby warranting, in the opinion of the President, a need for repromulgation as the government followed due procedure and didn’t bypass the requirement of repromulgating the ordinance. The bill to the effect, had been laid before the parliament only to be not discussed due to heavy and other urgent and emergent work-load of the business of both the Houses in the aforesaid sessions.
2. Action of Government in re-promulgating the 10 Ordinances definitely falls within the ambit and scope of the exception carved by the Supreme Court[14].

The Supreme Court in the DC Wadhwa case[15] observed that the power of a governor under Art. 213 to re-promulgate an ordinance is same as that of the President. However, while resorting to such emergency powers exercisable under Art 123 by the President and under Art 213 by a Governor, it can’t take-over the law making function of the Parliament and a state legislature respectively as that would be clearly subverting the democratic process that lies at the core of our constitutional scheme.

The aforesaid observations came to be recorded by the Supreme Court in view of the fact that an ordinance has to be replaced by a Bill which is to be introduced before the Legislature for its debate and then accepted and that without resorting to the said procedure if the Government resorts to the power of re-promulgating the Ordinances without bringing a bill in the House, that would amount to the executive taking over the law-making-power which is only vested in the Legislature and would therefore, amount to fraud of constitutional power[16].

Advantage of Ordinance

1. The passage of ordinance is time-testing. It proved to be advantageous at the time-
2. The government’s attempt to demonetize large rupee denominations in 1978 to prevent illicit money transfers,
3. The creation of the TRAI in 1997 to raise private investors’ confidence in the ongoing process of liberalization and
4. The ordinance to amend the Land Acquisition Act to kick-start stalled projects.

2. It is commonly used to meet the deadline set by the courts for certain implementations and defer certain diktats of the court like the recent NEET Ordinance, 2016 so as to avoid inconvenience and give relief to the states for certain period, but it should not be used to send a wrong message about the country’s democratic bearings as unilateralism needs no time to convert into authoritarianism.

3. The conferment of such power may appear to be undemocratic but it is not so, because the executive is clearly accountable to the legislature and if the President, on the aid and advice of the executive, promulgates an Ordinance in misuse or abuse of this power, the legislature can not only pass a resolution disapproving the Ordinance but can also pass a vote of no confidence against the executive.[17]

Disadvantages of an Ordinance

Ordinances have generally been based on political consideration rather than on principles of good governance like-

1. The promulgation of the SARFAESI Ordinance in 2002, when the bill was being deliberated by the concerned Standing Committee, the promulgation of the Electricity Regulatory Commissions Ordinance in 1998, one day before the government had agreed to convene;
2. The last government’s ordinance to shield convicted legislators is all instances when the Executive’s unilateralism sent a wrong message about the country’s democratic bearings.

Conclusion

As can be understood and inferred from above, ordinance making power of the executive is the legislative power which can be exercised by it subject to the approval of the Legislature. The exceptions available to the legislative power of the legislature are concomitant to the exceptions available to the ordinance making power.

This power exercised by the executive sometimes seems to be indispensable to meet the deadline as required and to restrict the judicial interference on the executive acts so as to not allow judiciary to narrow the scope of separation of powers. Sometimes it is used to meet one’s political ends by intimidating and browbeating the political opposition, which was not the objective of the founders of the constitution of incorporating such provision in the constitution.

Therefore, it should be judicially reviewed if such need arises as was done in the D. K. Basu case[18] and the Krishna Kumar Singh case[19] where large number of ordinances promulgated and repromulgated again were struck down by the Supreme Court as no explanation was provided for promulgating the ordinance. So the Executive needs to strike a balance and has to be wary of the side effects of the ordinance on Part III of the Indian constitution and democratic setup of the country.

Footnotes:

[1] http://www.frontline.in/the-nation/ordinance-route/article4944717.ece Last visited on: 24/5/2015

[2] Art 123 of the Indian Constitution

[3] Art 213 of the Indian Constitution

[4] MANU/SC/0051/1981

[5] K. Nagaraj and Ors. etc. etc. v. State of Andhra Pradesh, MANU/SC/0343/1985

[6] Art 123 of the Indian Constitution

[7] Booz Allen and Hamilton, “ Foreign Legal and Regulatory landscape: Its effect upon the development and growth of e-commerce” pg. 41-42

[8] <http://www.prsindia.org/billtrack/the-telecom-regulatory-authority-of-india-amendment-act-2014-3320/>accessed on 23/5/2016

[9] <http://asi.nic.in/PDF_data/notification_ancient_monuments.pdf.> accessed on 24/5/2016

[10] <http://www.frontline.in/the-nation/ordinance-route/article4944717.ece>accessed on 23/05/2016

[11] <http://www.firstpost.com/india/neet-ordinance-supreme-court-jp-nadda-medical-council-of-india-2795128.html >accessed on  22/5/2016

[12] <http://timesofindia.indiatimes.com/india/President-Pranab-Mukherjee-signs-NEET-ordinance/articleshow/52411402.cms>accessed on 24/05/2016

[13] AIR 1997 Del 58

[14] AIR 1987 SC 579

[15] Ibid at 13.

[16] Supra at 3.

[17] Venkata Reddy vs State of Andhra Pradesh, MANU/SC/0372/1985

[18] Supra at 14

[19] Krishna kumar Singh vs State of Bihar, MANU/SC/0358/1998

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This blog post, Surbhi Kapoor, a student of Amity Law School, Delhi IP University, talks about the newly proposed bill on medical treatment for terminally ill people. This bill gives provisions for legalization of passive euthanasia. The article analyses the development of the Bill from the 196^th Law Commission Report to the 241^st Report. Some drawbacks of the Bill have also been mentioned.

The Medical treatment for terminally ill patient’s bill, 2016 was proposed by the ministry of heath and family welfare based on the recommendations of the 241^st law commission. The bill deals with the legalization of passive euthanasia but does not talk about active euthanasia. Passive euthanasia means the life system of the patient that is supported for the continuance of life. In simple words, in passive euthanasia, no efforts are made to preserve the life of the patient. Passive euthanasia can further be divided into voluntary and non-voluntary. Under voluntary passive euthanasia, the patient is under such conditions that he can make decisions of his life and can give consent for euthanasia. However in no voluntary passive euthanasia, it is difficult to receive the consent of the patient. So the decision has to be taken by the medical practitioner of the patient or the close relatives. Their decision shall not be final and has to be approved by the high court.

Active euthanasia involves injecting a lethal substance to the patient to give the patient a painless death. Active euthanasia considered to be a crime all over the world (irrespective of the will of the patient) except where permitted by legislation, as observed earlier by Supreme Court¹. Active euthanasia is a crime in India under section 302 and section 304 that deal with punishment for murder and punishment for culpable homicide not amounting to murder respectively.

A brief on 196^th Report by Law Commission                                                                      

The report dealt with the withholding of the life support system of terminally ill patients which is legal is most of the countries. The bill had made recommendations that if the patients were incompetent, the doctor should obtain the consent of 3 other experts in the same field and form the patient and other close relatives about the same. The name of the experts would be given on a panelist. Then a period of 15 days would be given to the about file a case in the high court seeking whether the act was lawful or unlawful in the eyes of the court. The decision of the high court shall be binding on all the people. The letter filed would not require any formalities as in the normal process of filing a complaint with the high court require. The letter would be treated as an original petition and will directly be placed in front of the magistrate for decision. Here, the terminally ill patient if competent has the right to refuse treatment.“In our view where a medical practitioner is under a duty at common law to obey refusal of a patient who is an adult and who is competent, to take medical treatment, he cannot be accused of gross negligence resulting in the death of a person within the above parameters².

Aruna Shanbaug case

This was the first case in Indian history that discussed on length about euthanasia. The supreme court made it clear that passive euthanasia is permissible. It made clear that a close relative cannot take a decision on behalf of a terminally ill patient who is incompetent to make decisions. Aruna Shanbaug was in persistent vegetative State for about three decades, and there was the very little scope for recovery. She had been abandoned by her family and was being looked after by the staff of KEM hospital where she used to work before. In PVS state the brain stems work and are active while the cortex loses its functioning and activity. In such a state the brain is not dead. The important question before the court was that what would be the best decision for the patient when he/she is in PVS state. So this authority was vested in the high court. The emotions of the parents, spouse, or close relatives should not be given much weight as the decision should be in the best interest of the patient and no one else.

Approach to Competent Patient

If a patient is suffering from an irrecoverable disease and is undergoing terrible suffering and mental agony and does not wish to live using artificial means. The person would not want to send a lot of money for the treatment when he may not be totally recoverable. Article 21 what gives every individual a right to live does not get violated when the life support system us withdrew for the interest of the patient itself. No law can take away the right of a patient to die with dignity and care.In the words of Justice Cardozo, “every human being of adult years and sound mind has a right to determine what shall be done with his body and a surgeon who performs an operation without his patient’s consent commits an assault for which he is liable in damages.”⁴

Approach to incompetent person

If a person is unconscious and cannot communicate his will and is suffering from some life threatening disease that may be irreversible, he cannot be refused the right to die if it is in the best interest of the patient. Article 21 should not forbid the resort of passive euthanasia to an incompetent person

Recommendations made by the Bill

The legal recognition of passive euthanasia has been pending since the 196^th law commission report. The Supreme Court gave consent to the same under the case of Aruna Shanbaug v. Union of India⁵. Passive euthanasia is allowed in many countries and should have legal recognition in our countries as well. The bill is not objectionable from the legal or constitutional point of view. A competent adult person can take an informed decision. An incompetent person or a competent person who does not take an informed decision, the decision of the doctor or the relative will not be considered to be final. Notice to the high court has to be given for the same. The decision of the high court will be final. The high court will take the decision after obtaining the consent of 3 experts in the field, and the decision should be taken in the best interest of the people.

The medical practitioners should be given protection when they act according to the decision taken by the competent patients. The government should make palliative care available at affordable cost to all the terminally ill patients.

Limitations

There are some issues where the bill has failed to incorporate strict laws and execution of which can create problems. The patient needs to give an informed decision if he is competent to do so. However, issues were raised about the validity of these and the authenticity of such consent. Audiovisual recording of obtaining consent and the medical trail could be helpful in such cases, but the bill does not address any of such problems. The bill does not differentiate between patients who were competent while giving the decision of informed consent or those who expressed their view earlier in the form of a directive.

Under clause 3 of the bill, the decision of the patients competent to give their consent can give informed consent; their decision would be considered to be binding on the medical practitioners of the patient. However, the clause 9 states that the decision of the medical practitioner or the close relatives of the patient will not be binding on the medical experts. The decision has to go to the high court within 15 days. Then the verdict given by high court would be binding on the doctors and the relatives.

The definition of “terminal illness” can also include even mental health issues. Section 2 clause m that defines terminal illness such illness, injury or degeneration of physical or mental condition which is causing extreme pain and suffering to the patients and which, according to reasonable medical opinion, will inevitably cause the untimely death of the patient concerned, or (ii) which has caused a persistent and irreversible vegetative condition under which no meaningful existence of life is possible for the patient⁴. This definition can also include acute mental illness and agony. The choice of the High Court as a forum to obtain permission for the withdrawal of treatment from incompetent patients imposes a lot of burden on medical practitioners and the relatives and does not take into account that High Courts will not be able to deliver judgment in such cases.

If the bill gets approved, the medical council of India will have an active part to play. The medical council will have to prepare guidelines for the medical practitioners to see when they can withhold the medical treatment being given to the patient. The NGO common cause played an important role in the framing of the bill as the PIL filed in the Supreme Court mentioned that when a patient has reached a stage from where he cannot recover back, it is essential that he should be given the right to refuse any support material to die with dignity. The bill would restore the dignity of the patients.

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In this blog post, Vineet Kumar, a student of National Law University of Orissa, and Nalini Chandrakar, a student of Hidayatullah National Law University writes about artificial intelligence and its need in India. The blog post also deals with the recent developments in artificial intelligence and its position in India.

Introduction

Humans have always attempted to find new ways to perform different tasks easily with least efforts. For this, new technologies have been developed and are still being developed, one of which is the technology of Artificial Intelligence. Though the concept of artificial intelligence originated way back around the 1950s, the field still requires a lot of research and development even in the developed economies of the world. The idea that humans could, at some point, develop machines that actually “think” for themselves and act autonomously has been embedded in our literature and culture since the beginning of civilization.[1]

Defined by Prominent Minds- In simple terms, artificial intelligence can be understood as a technology that the can behave, respond and act like humans and may also replace human species in different works, like driving. It is difficult to give a precise definition to the term “artificial intelligence”. As per Haugeland, it is “the exciting new effort to make computers think…machines with minds, in the full and literal sense”.[2] For instance, the mathematician named Akan Turing, who is most closely associated with the artificial intelligence, contributed to the development of Manchester Mark I computer and was involved in research aimed at the question of how to judge the intelligence of a machine. His speculation on the latter led to which is now called the “Turing Test.”

For Bellman, it is “the automation of activities that we associate with human thinking, activities such as decision-making, problem-solving, learning…”[3]Charniak and McDermett define AI as “the study of mental faculties through the use of computational model”.[4] And for Winston, it is “the study of the computations that make it possible to perceive reason and act.”[5]

Artificial Intelligence and Law

The Artificial Intelligence and Law, the domain of both, are enticing for AI analysis for many reasons. First, the law encompasses a tradition of examining its reasoning method. Second, a lot of legal data is quickly accessible and comparatively well structured, written and indexed. The Lawyers’ nowadays are technology savvy and have an interest in AI techniques and software system. Lawyers’ offices use tools that gather, filter, and structure legal arguments in an exceedingly efficient manner. The sooner works within the field like Lexis and WESTLAW be keyword based mostly. Within the domain of AI to law, the researchers have encountered attention-grabbing and troublesome issues of each the fields. The domain of AI and law is far more than an applications space. The sector touches upon problems at the terribly heart of AI reasoning, illustration, and learning. Topics like negotiation, decision-making, e-commerce, linguistic communication, information retrieval, extraction and data processing AI and Law may be a wealthy supply of issues and motivation for the interested researchers.

There are works in past regarding confronting of legal arguments that haven’t solely created programs that would lead to producing legal arguments. However, additionally, it has led to insights and advances within the logic of argumentation. The application-oriented works have often provided insights into the restrictions of existing techniques. There’s forever collaboration, not solely between Law and AI however additionally between AI and AI. Work on AI and Law has been notably fruitful within the last decade. Besides providing advanced laptop applications for the legal domain like knowledge-based systems and intelligent data retrieval, analysis on AI and Law has developed innovative knowledge base models for understanding legal systems and legal reasoning, which plays a vital role in the field of philosophy of law and legal theory. Today there is a robust need for group action analysis in AI and law among legal theory, but additionally, it’s required to cover the various branches of analysis in AI and law.

Michael Negnevitsky in the book “Artificial Intelligence: A Guide to Intelligent Systems” says that “the development of expert system created knowledge engineering: the process of building intelligent systems. Today it deals not only with expert systems but also with neural networks and fuzzy logic. Knowledge engineering is still an art rather than engineering, but attempts have already been made to extract rules automatically from numerical data through neural network technology”.

Recent developments

Though, practically speaking, robots are unlikely to replace lawyers in court, but they can prepare papers for hearings. Despite the early enthusiasm, the concept of computers and robots replacing human hands in legal reasoning tasks is yet to get a real shape. However, there are positive signs that a combination of technological advance and market forces may push the law firms and make them step into the AI stage. A recent study conducted by Jomati points out that, “technology can suddenly race ahead at astonishing speed”.[6]

AI based system has already been introduced in the field of journalism. The Associated Press news agency has devised strategies to automate the writing of corporate earnings reports with an AI system named Wordsmith. It spots designs, patterns and trends in raw data and then describes those findings in natural language. Applying the similar technique, legal documents can be produced, and such systems could also carry out many tasks given to the paralegals and junior associates. Another more sophisticated use of the AI technology can be done to provide strategic guidance. By trawling through past case records in no time, a system can find the optimum percentage at which an increased offer would lead to a settlement position in a case.

Recently an Ohio-based law firm called Baker & Hostetler had recruited IBM’s AI Ross to handle and manage their bankruptcy practice.[7] It is based on IBM’s Watson, which is a cognitive computer with the capability of gaining knowledge about humans by noticing their interactions, experiences and perceptions.  In other words, it is based on the technique of human recognition.

In Japan, robots powered by the Watson technology are used by Nestle cafes to provide information about their products to the consumers. The US Defense Advanced Research Projects Agency (DARPA) is presently funding some artificial intelligence projects which could potentially equip governments with the most powerful weapon possible, i.e. the mind control.[8]

Position in India

Currently, there are no defined laws or regulations that govern the field of artificial intelligence in India. Though India is making fast progress regarding technology, the scientists are yet to discover full potential and utilization of this technology. Some independent bodies exist with an aim to research and create machinery underlying the thought of intelligent behaviour.

One such organization is the Artificial Intelligence Association of India (AIAI). Founded in the year 2009, it is a non-profit scientific society devoted to advancing the scientific understanding of mechanisms underlying the thought and intelligent behaviour and their embodiment in machines.[9]

Indian innovations are yet to be implemented with this technique. The Centre for Artificial Intelligence and Robotics, which is a branch of DRDO, has developed the Network Traffic Analysis Software (NETRA). This software has capabilities to intercept and analyze the internet traffic via specified filters. Currently, this software is being used by RAW, IB, state-level law enforcement agencies and is piloted by Ministry of Home Affairs.[10] There is a need to realize the true potential of the Artificial Intelligence technology and implement it judiciously in different fields like defense, sports, infrastructure, etc.

Footnotes:

[1]Haugeland, J., (ed.) Artificial Intelligence: The Very Idea, MIT Press, USA, 1985, quoted in Stuart J Russell and Peter Norvig, Artificial Intelligence: A Modern Approach, Tan Prints (India) Pvt., New Delhi, 2002, p.5

[2]Philosophy of Artificial Intelligence: A Critique of the Mechanistic Theory of Mind, RajakishoreNath, p.21

[3]Bellman, R. E., An Introduction to Artificial Intelligence: Can Computers Think?, Boyd and Fraser Publishing Company, San Francisco, USA, 1978, quoted by Stuart J Russell and Peter Norvig, in Artificial Intelligence: A Modern Approach, p.5

[4]Charniak, Eugene & McDermott, Drew, Introduction to Artificial Intelligence, Addison-Wesley Publishing Company, Canada 1985, p.6

[5]Winston, Patrick Henry, Artificial Intelligence, Addison-Wesley Publishing Company, London, July 1984, p.2

[6]Civilization 2030: The Near Future for Law Firms

[7]indiatoday.In (May 20^th, 2016)

[8]Hacking Without Borders: The Future of Artificial Intelligence and Surveillance, Maria Xynou, The Center for Internet & Society (Mar. 15^th, 2013)

[9]aiai.org.in

[10]The Centre for Internet and Society

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In this blog post, Pramit Bhattacharya, Student, Damodaram Sanjivayya National Law University, writes about the concept of Carbon Taxes. The post looks into the meaning of a carbon tax. The post also highlights the effect of carbon tax on the economy. The issue of spending and cost with regards to the imposition of a carbon tax is also discussed in this post.

Since the advent of the Industrial Revolution, when man learned to exploit nature for his benefit, the amount of Greenhouse gasses (GHG) in the environment has reached alarming levels. The social cost of exploiting nature almost indiscriminately was not taken into account at all, which lead to nature taking a complete turn. To counter the problem, protocols and agreements like the Kyoto and Montreal Protocol were signed.

Many economists and environmentalists came together and decided that some cost should be imposed on the use of natural resources and fuels such as coal, gas, oil, etc., to curb the deterioration of the environment. Following this, many developed countries started imposing “carbon taxes” in their territories mandatorily. Recently, the European Union levied a carbon tax on the Airlines Sector of India, and the taxes were only removed after India expressed its concern to the United Nations and they rejected the tax imposed by the European Union.[1]In the year 2010, India also imposed a carbon tax coal production (mining) and import of coal. The rate of tax levied is Rs 50/ metric ton.[2]

What is Carbon Tax?

“Climate change” can be said to be the biggest negative externality that is associated with the production of goods and services. It is one of the costs which is not considered at all and can turn out to be extremely damaging to the environment in the long run. To tackle this problem of climate change as a result of the unfettered exploitation of the environment, Arthur Pigou (eminent Cambridge Economist) suggested that the government should impose a tax on the production of goods and commodities which are equal to the social costs.[3]  

Carbon Tax can be defined as an environmental tax, that the government imposes on producers of goods and commodities who use natural resources or to be more precise fossil fuels like coal, gas and, petroleum in their production activities. When fossil fuels are used, carbon particles are released which pollutes the environment. This affects everyone and imposes a social cost on the society as a whole. This social cost is not reflected in the cost of production but nonetheless have certain consequences.

If the emission of pollutants is not checked, there will be no reason for producers to reduce emissions. To regulate the level of emissions, the polluter-pays principle is applied. Carbon Tax can be considered as a part of this principle.[4] It is a fee which depends on the emission of carbon which takes place either during the production process or while the product is being used. In some cases, the maximum emission level is also set, and going beyond that limit can attract heavy penalties.

Advantage of Having a Carbon Tax

In circumstances where the carbon tax is imposed, individuals or manufacturers are discouraged from the intensive usage of energy derived from fossil fuels. Also, it encourages the society to use less energy. For instance, people might start using more of public transportation or switch to CFL bulbs. In the case of a carbon tax, the higher the rate of tax, the greater the motivation for people to reduce emissions.

The Game Theory[5]

The Game Theory has not much got to do with law, but much to do with mathematics. It is a model of balancing conflict and cooperation to reach a rational decision. This theory plays an important role for a country like India to decide whether such taxes should be imposed or not.

The developed country of the world has two options. Either to impose the tax mandatorily or not to impose the tax. Now, whether a developing country (for example, India) should impose such tax or not depends on the decision of the developed nations. Because even if a developing country like India imposes the tax mandatorily, but the developed nations do not, it’ll not bring down the level of emissions and the tax will act as an additional and unnecessary burden on the citizen of the country.

Therefore, for a developing country like India, there’ll be no real benefit of imposing such a tax if other developed nations do not cooperate and impose it. At present only some of the countries in the European Union and Australia imposes a tax on the emission of carbon.

Economic Effect of Imposition of Carbon Tax

Any tax directly or indirectly affects the end consumer only. This holds true even for the carbon tax, as an imposition of the carbon tax will affect the final consumer. The producer will look to recover the amount he is paying a tax and will shift the burden of the tax on the consumer by increasing the cost of the product. The example of Quantas, an Australian Airline company can be cited here. They recovered the carbon tax imposed on them by the way of ticket surcharge. The total amount recovered from the customers was close to around $ 105 million.[6] Seen from the view of the economic system, this type of tax is not to generate any revenue but to change the behavior of the people. The negative impact of such a tax would be that every commodity will be sold for a higher price.

The ultimate result will be a rise in inflation, a decline in standards of living and lesser opportunities of employment for the people of the country.[7] This type of situation, especially in a country like India, where the population is extremely high, along with high rate of poverty and an unstable economy makes no sense at all. And that too when the other developed countries are not imposing this tax. Imposition of a carbon tax in India may be a bad idea also because the idea in the first place is to encourage manufacturers to manufacture greener products. But at the present moment, the producers may not even have such advanced technology to manufacture such products. Also, the rate of emissions would not depend only on the imposition of a tax because emission of carbon is a very uncertain thing which depends on various factors.

The National Association of Manufacturer’s Report in the USA stated that if a carbon tax is imposed, it’ll result in a negative growth of the GDP of the country by 3.6% by 2053.[8] The average consumption of the citizen will also reduce which may impact the economy adversely. Talking about Australia, where the carbon tax is imposed mandatorily, the real GDP of the country may come down by 0.68, and consumer prices may rise by .75 %, and electricity cost may increase by 26%.[9]A Report which was prepared by the US Congressional Budget Office stated that such tax would also have a cascading effect and can hamper economic growth.[10]

Issue of Spending

A tax system which is neutral will be helpful in this case, which is beneficial for both, the economy and the environment. Denmark has approached the issue of a carbon tax in this manner. It provides subsidies and has reduced taxes to negate the extra burden of carbon taxes. Institute of Energy Research wrote a paper in which they mentioned that it is impossible to formulate a carbon tax system which is at the optimum level as the legislature cannot have all the possible information due to the uncertainty of climate.[11] There is a direct correlation between the economic development of a country and energy use. Carbon emissions are inevitable in this case. If taxes like these are levied, it’ll lead to low economic output. The imposition of such taxes would also lead to trade protectionism. For instance, if a country imposes a carbon tax it’ll result in a situation where cheaper imports will become a difficulty, which in turn would hamper the international trade of that country. The example of France can be cited here. France earlier proposed a carbon tax, but later the plan was scrapped as the government thought that imposing a carbon tax would place France in a disadvantageous position as compared to its other European neighbors.[12]

The Social Cost of Carbon emission is first, the direct impact which the emissions will have. Secondly, damage from the rise in sea level, and thirdly, the impact on human health. The only way forward it seems is to maintain a balance between the benefits derived because of the levy of the tax and the impact it would have on the economy. The criticism this approach faces is that the poor has to face the maximum burden, but contribute least to the problem.

Concluding Remarks

India has already imposed a tax on coal production and import, as stated above, where there is no such carbon tax even in some of the few developed countries. The best option for India would be to wait and watch.

The only way forward is to cooperate and work together with mutual understanding, because the matter of degradation of the environment is a very pressing one, and something has to be done about it. For a country like India, it’ll be best to see if other nations apply such taxes or not. In case, the imposition of such a tax does take place; a few incentives can be provided, for instance, lowering other kinds of taxes like Sales Tax and Value Added Tax on greener products.

Footnotes:

[1]http://articles.economictimes.indiatimes.com/2013-10-08/news/42829450_1_carbon-tax-carbon-emissions-icao

[2]http://www.bloomberg.com/news/2010-07-01/india-to-raise-535-million-from-tax-on-coal-output-this-year-ramesh-says.html

[3]http://www.imf.org/external/pubs/ft/fandd/basics/external.htm

[4]http://www.econmodels.com/upload7282/27172cc93d8292880bf6d7eb8103cfd9.pdf

[5]http://www.lawctopus.com/academike/mandatory-carbon-taxes/

[6]http://www.theguardian.com/world/2014/mar/06/qantas-carbon-tax-bill-has-been-covered-by-ticket-surcharge

[7]http://www.cato.org/publications/commentary/carbon-tax-would-make-no-sense

[8]http://www.nam.org/~/media/ECF11DF347094E0DA8AF7BD9A696ABDB.ashx

[9]http://www.une.edu.au/__data/assets/pdf_file/0009/23877/econwp11-2.pdf

[10]http://cleantechnica.com/2013/05/25/carbon-tax-good-for-climate-and-economy-says-us-congressional-budget

[11]http://www.instituteforenergyresearch.org/2009/03/11/carbon-tax-primer/

[12]http://www.nytimes.com/2010/03/24/business/global/24iht-carbon.html?_r=1&

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In this blog post, Pramit Bhattacharya, student, Damodaram Sanjivayya National Law University writes about the Constitutionality of Media Trials. The post also highlights the impact of Media Trials on the Judicial System and the society as a whole.

Media can be regarded as one of the pillars of democracy. The media plays a very crucial role in shaping the opinion of the people about an event, and it can also change the perspective of the society, giving people a different viewpoint for interpretation. In the last couple of decades, with the advent of various forms of mass communication like television and the radio, the reach and impact of media have been enhanced. The reach and growth have been further increased by the advent of the internet. Newspapers are also a very popular form of newsgathering. These modern as well as technological modes paly a very vital role in molding the opinion of the people. But it important to understand that which such powers, comes some responsibility also.[1] 

We all recognize the importance of media in a democracy. Media gets its freedom under Article 19 (1) (a) of the Constitution, which confers the freedom of speech and expression. In a highly mixed society like India, it is essential to have an independent and free media. The increasing role of media was appropriately put by Justice Learned Hand of the United Supreme Court when he said that “….the hand that rules the Press, the radio, the screen, and the far-spread magazines, rules the country.[2] Media often plays the role of a watchdog of the functionaries of the society and bring the wrongdoers into open. In many cases, the media has helped the judiciary, where due to the media highlight the Courts have taken a suo moto action.

However, there is a flip side to the role of the media also. With the increased impact and growth of media, it is very crucial that the answerability and accountability of media are there because every freedom comes with certain duties and it is also an accepted fact that even some reasonable restrictions can be placed upon the freedom for the greater good. Many a time, to grab more readers and viewers, and to increase the TRPs, media houses often concoct and distort a story and present it to the society. They often violate the right to privacy of other parties for their professional gains and to sensationalize the issue. This blatantly violates the right of fair trial of the parties which has been guaranteed under the Constitution. There have been many instances where the media has conducted their trials through their reports and have given their verdicts before the Courts could reach a decision. This is known as “Media Trial.”

Some examples of Media Trial can be the Jessica Lal murder case, Priyadarshini Mattoo Murder Case, and the Nitish Katara murder case. The recent example of it can be seen in the Ayushi Talwar murder case. Trial by media creates an impression in the mind of society on the character of the parties irrespective of the decision given by the Court. The problem is worsened when an issue involves a celebrity or a big name, where media report can have a greater impact on the sentiments of the people. Between the advantages and disadvantages of media trial, the debate about the constitutionality of media trial goes on.

Impact of Media Trial

Freedom of Speech and Expression and Media Trial

Freedom of speech and expression plays a vital role in the formation of public opinion on various matters. Therefore, it can be said that freedom of speech and expression is the supreme of all liberties, as it allows a person to place his opinion among others.[3] Keeping this in view, in the case of “Express Newspapers (Bombay) (P) Ltd. V UOI[4] the Supreme Court stated that “freedom of the press is the heart of social and political intercourse. The press has now assumed the role of the public educator making formal and non-formal education possible on a large scale particularly in the developing world, where television and other kinds of modern communication are not still available for all sections of society. The purpose of the press is to advance the public interest by publishing facts and opinions without which a democratic electorate [Government] cannot make responsible judgments. Newspapers being purveyors of news and views having a bearing on public administration very often carry material which would not be palatable to Governments and other authorities.” This statement clearly points out to the fact that freedom of press and media is of utmost importance for the proper functioning of the democratic setup.

In Printers (Mysore) Ltd. V CTO[5], the Apex Court stated that freedom of the Press is not a fundamental right which has been expressly guaranteed, but interpretation the Constitution implies that it is essential to give freedom of expression to the Press. In the judicial pronouncement of R Rajagopalan v. the State of TN,[6] the Court stated that this right extends to cases where public figures, public events, and issues are involved but a balance should be maintained between public events and private lives of people

Therefore, it is clear that the freedom of speech and expression gave to the Press is conferred by Article 19 (1) (a) of the Constitution, and since the Press does not stand any different from the other citizens of the country, no special restriction can be placed upon it.

Media Trial and Fair Trial

Media Trial can sometimes become a problem because it gives rise to two conflicting ideologies- a fair trial and freedom of Press. Both the concepts has an effect on the public lives. Freedom of public in the democracy gives the right to the freedom of Press. This is used as a justification for campaign and investigative journalism. On the other hand, a trial which is not affected by external factors, i.e., free and fair trial is a basic principle of the judicial system. A media trial may be prejudicial to the case of the parties, or it may influence the opinion of the court because to be very honest, no person is impartial and unbiased. It is human nature to be biased towards a certain view, and even a Court can fall into this trap. In many cases, the media exceeds its freedom of speech and expression by broadcasting and publishing materials which are prejudicial to the interest of the parties like the character of the parties, photographs, criticism of the witnesses, etc.

Article 14, 20, 21 and 22 gives various rights to a person through which he can exercise his right to free, and fair trial and the media cannot go beyond their rights to assert their rights. Needless to say, the right of having a fair trial is more important as it flows directly from Article 21 when read with Article 14. In a way, the right of having a fair trial is above freedom of speech and expression given to the Press under Article 19.

Media Trial and Right to be Represented

Sometimes, media trials create a lot of pressure on the lawyers, not to take the case of a party, which forces the accused party to go through the trials without having any defense. Take the case of Mohd. Kasab for instance. Yes, it was very evident that he was the guilty party. But did not he also deserve a fair trial? The media created a scenario where any lawyer who would have taken up his case seem like an anti-national. Isn’t this against the fundamental principles of natural justice? Every person is entitled to get the lawyer of his choice and defend himself in the court of law, and nobody can bar it from doing so. Another instance is when Ram Jethmalani decided to defend Manu Sharma. The criticism he faced from the media was immense, and it was stated that he was trying to defend the indefensible. Sometimes the media also presents a case in such a manner that if a judgment is given to contrary to that of the media trial, the judge who has given the verdict is made to look like as biased and corrupt.

Constitutionality of Media Trials

Freedom of Press

Article 19 of the International Covenant on Civil and Political rights, 1966 states that every person has the right to freedom of speech. However this right is subject to some duties and responsibilities and is subject to right and reputation of other individuals. In the judicial pronouncement of In Re: Harijan Singh and Anr and In Re: Vijay Kumar[7] The Supreme Court recognized media as an essential advantage in the democratic setup. Right to information and the right to broadcast is also conferred by Article 19 of our Constitution.

In the case of Hamdard Dawakhana v UOI,[8] It was opined by the Court that right also includes the right to gain information and knowledge about matters that are of common interest. But the Supreme Court has also stated that a trial by media is opposite of the rule of law. But as the media is one of the foremost pillars of the democracy, their freedom can’t be curtailed, but can be restricted to a certain point.Balance should be maintained between the freedom of Press and the rule of law.

Immunity under Contempt of Court Act, 1971

Under this Act, pre-trial publications are given immunity against contempt proceedings, certain acts like the publication of any material by the media by the pre-trial stage can affect the interest of the parties involved in the trial. For example, in the case of Ayushi Talwar murder case, the media came up with a lot of reports like the character of the parties, the strength of the evidence etc. which proved prejudicial to the case of the parties. Despite this, these publications have been granted immunity. These publications may harm the justice system if they are not restricted to a certain level and if they are allowed to go unchecked.

Public’s Right to Know

The Supreme Court has stated that the main principle in giving the freedom to the Press it enjoys is that the public has the right to know what is happening in the society. The Apex Court elaborated on the principle and opined that the main function of the Press is to provide all-encompassing and objective information to the society which relates to country’s social, economic, political and cultural life. The media has an educative role to play while dispensing this function.[9] The Court also stated that the public has the right to know the “correct news” and the media shouldn’t make up stories to sensationalize matters.

Highlighting the merits of the media in the Bofors Case,[10] The Supreme Court was of the view that those who know anything about the matter might come forward with information, it reduces crime through society’s disapproval of certain acts, and most importantly it leads to a public discussion of important issues.

Public Participation

Trial by media is often justified by giving the argument that the media highlights what is already there in the minds of the people. Media is also supported through the argument that in a democracy, having a transparent and accountable setup is of utmost importance. Without a free press, the society will go back to the time when proceedings were conducted in secret without the knowledge of the public. The media through its campaign journalism provides a platform to the public to express its opinion and hence ensure their participation.

Legal Norms and Journalistic Conduct

The Press Council is instituted under The Press Council Act, 1978. The main objective of the Council is to ensure the freedom of Press.[11] The Council also holds the authority to sanction punishment for irresponsible journalism.

Concluding Remarks

Trial by media can be regarded as a necessary evil. Many big scams were uncovered by the media, and the law merely followed them up. The media houses must be given credit where it is due for extracting information that was so well guarded. One of the other advantages of having a strong and free press is that people are now aware of their rights owing to the fact that they are being exposed to a lot of information. But the fact remains that media has to be a regulated in some way or the other. They cannot remain unchecked and do a trial which gains more publicity. The Supreme Court has also stated that it is acceptable that the media should be independent and free, but they can’t come in the way of Justice and exercise their freedom in such a way that it is prejudicial to the proceedings itself. The problem does not lie in media’s exposing the wrongs in the society. The problem arises when they go beyond the rights conferred to them and do things which they shouldn’t. The credibility of news media rests on unbiased, objective reporting. It is in the media’s interest to ensure that the administration of justice is not undermined.

Footnotes:

[1]http://www.civilservicestimes.co.in/editorial-/current-national-issues/416-trial-by-media-looking-beyond-the-pale-of-legality-.html

[2]http://www.forbes.com/quotes/5916/

[3]Freedom of press in India: Constitutional Perspectiveshttp://www.supremecourtcases.com/index2.php?option=com_content&itemid=1&do_pdf=1&id=6752

[4](1985) 1 SCC 641 at p. 664, para 32.

[5](1994) 2 SCC 434

[6] (1994) 6 SCC 632

[7](1996) 6 SCC 466, paras 8, 9 and 10.

[8]1960 (2) SCR 671

[9]In Re: Harijan Singh and Anr.; In Re: Vijay Kumar, (1996) 6 SCC 466, para 10.

[10]KartongenKemiOchForvaltning AB v. State through CBI, 2004 (72) DRJ 693.

[11]Press Council Act, 1978, Section 13(1).

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In this blog post, Soumya Deshawar, a student of University of Petroleum and Energy Studies, analyzes the topic “Domain Name Dispute”. This blog explains the meaning of a Domain name dispute, how the Indian Legislation treats it, and how such a dispute can be avoided. It also provides the remedies for the same.

Introduction

The dispute of domain name is a conflict which arises when more than one individual or group believe that they have the right to register a particular domain name. Most frequently, a domain name dispute would arise when a domain name comparable to a registered trademark is registered by an individual or association who is not the trademark holder. All domain name registrars must follow the ICANN’s Uniform Domain-Name Dispute-Resolution Policy (UDRP)

Indian Legislation

Cybersquatting has been defined as “an act of obtaining deceitful registration with an intent to trade the domain name to the legal owner of the name at a premium” according to the court in the case of Manish Vij v. Indra Chugh [AIR 2002 Del 243].

The Information Technology Act, 2000 of India talks about several cyber crimes and has set up a special Cyber Crimes Cell. However, the Act strangely ignores the problem of domain name disputes and cybersquatting. The only saving grace for sufferers of such felonies is that domain names may be regarded as trademarks based on usage and brand status and so fall under the Trade Marks Act, 1999. However, not all domain names are trademarks. Several cases of Rediff, Yahoo, and Satyam have laid down some guidelines as stated below- 

• The offender should have sold/ offered its goods/ services in a way that misleads the public into thinking that the goods/ services of the respondent are in fact the plaintiff’s.
• Misrepresentation by the offender to the community should be proved.
• Loss/ probability of it should be proved.

Passing-off and Domain Name Disputes. Contrasting the action for violation of a trademark, under an action of passing off, the registration of trademark is not obligatory. Whereas that the action for violation is based on a legal right attained by the registration of a trademark, in an action of passing off it is vital that goodwill has been attained by usage of the trademark.

Options in a Dispute 

Prioritize Important Domains

It may be that numerous domain names have been registered in a number of jurisdictions. If so it is probable that it will prove to be an expensive affair to recover all the domain names. Hence, it may be wise to prioritize the domain names that one finds particularly offensive.

Not Contesting the Registration

If the domain name is not vital, it may not be worth challenging. However, it is advisable to monitor the registration date and register the domain name if the holder lets the registration lapse.

Writing to the Registrant

It may be that a letter demanding the registrant to terminate and discontinue using the domain name may be sufficient to prompt them to transfer it for no compensation or for no more than out of pocket expenses, to avoid additional lawful action.

However, the registrant is not probably going to transfer the domain name if it is registered for a genuine reason or for the purposes of extracting a large sum of money from a trademark owner.  Negotiating a value for the acquisition of the domain name may perhaps be the commercially practical solution, as a speedy acquisition may prove inexpensive and faster than any lawsuit or dispute resolution process.

A Link to your Site or a Disclaimer

The possessor of the domain name may agree, possibly for a minor sum, to have a link that directs the internet traffic which has erroneously reached their site, back to one’s website. As an alternative, a disclaimer may be displayed on their website declaring that it is in no way linked to the person’s business or his website. This is more expected if the registrant has not registered the domain name in bad faith or is engaged in an unconnected trade which does not compete with the people.

Use the Internet Service Provider’s Terms and Conditions

The operator may be in breach of its ISP’s terms and conditions, particularly if the site is being used for unlawful or immoral purposes. A person could then bring this to the attention of the ISP and request them for suspending the site. Although the ISP can’t transfer the domain name to the person, the registrant may be more eager to transfer the domain name for a equitable sum if holding on to the domain proves to be more troublesome than it is value.

Dispute Resolution

An appellant in a UDRP proceeding must establish the following three elements to succeed: 

• The domain name is indistinguishable or confusingly similar to a trademark or service mark in which the appellant has rights;
• The registrant does not have rights or legitimate interests in the domain name;
• The domain name has been registered and is being used in “bad faith”.

In a UDRP proceeding, a board will consider numerous non-exclusive aspects to assess bad faith, such as:

• Whether the registrant registered the domain name mainly for the purpose of selling, leasing, or otherwise handing over the domain name registration to the appellant who is the holder of the trademark or service mark;
• Whether the registrant registered the domain name to avoid the owner of the trademark or service mark from imitating the mark in a corresponding domain name, if the domain name holder has involved in an arrangement of such conduct;
• Whether the registrant registered the domain name chiefly for the purpose of disturbing the business of an opponent;
• Whether by using the domain name, the registrant has deliberately attempted to draw, for commercial improvement, internet operators to the registrant’s website, by generating a probability of confusion with the plaintiff’s mark.

The aim of the UDRP is to create an efficient process for resolving such clashes. It was intended that this process should be speedier and cheaper than a standard lawful challenge. The costs to hire a UDRP supplier to handle a complaint often start from around US$1,000 to $2,000.

If a party loses a UDRP proceeding, in many jurisdictions it may still get a claim against the domain name registrant under local law. If the registrant of a domain name loses a UDRP proceeding, he/she must file a complaint against the trademark owner within a period of ten days to avoid ICANN from transferring the domain name.

Requirements to bring an action under the UDRP

(1) Identical to or confusingly similar: The domain that is in question must be identical to or confusingly similar to a name, trade mark or service mark in which you have rights. Note that this can cover unregistered trademarks such as names of the personalities well-known.

(2) No legitimate rights or interests: The registrant must not have any legitimate right or interest of his own in the questioned domain name. Legitimate use is roughly when the domain name is being used (or being planned to be used) in connection with a bona fide offering of goods and services before the registrant of the trademark is aware of such a dispute.

Lawful distributors or licensees have been said to have legitimate rights, with unlawful users or those claiming to be an authorized site not having legitimate interests. But occasionally the arbitrator will give the registrant the advantage of the doubt, mostly when the domain is a generic word or the registrant by reason has a possible use. Other challenging areas in relation to legitimate interests are fan sites for celebs. These are usually thought to be legitimate not including the ones where they are being used for commercial advantage.

(3) Bad faith: The questioned domain must have been registered and used in evil faith. Both these essentials of bad faith must be demonstrated. The UDRP has set out a non- exhaustive list of what institutes bad faith. These consist of diverting users to other sites by creating a possibility of confusion; if the registrant has numerous domains registered; a method made to a party that would be interested in the domain demanding money or its worth significantly in excess of out of pocket expenditures; passive holding of a domain was held to establish bad faith if the impression that the domain was being open for sale was given and boards are progressively concluding that the domains are being held for sale; offering to sell the domain on an auction site has been interpreted as being in bad faith; however, on instances, the fact that a registrant has offered to trade the domain by auction, or accepted to negotiate a price when communicated about the dispute does not automatically establish bad faith for the purposes of UDRP; being tough to interact or undetectable has been interpreted as bad faith.

Court Action

This may well be the optimum course of action if no bad faith is exhibited, bad faith is hard to prove or one wants to pursue costs and/or compensations from the Registrant for their usage of his mark. It must be noted that due to the worldwide nature of the internet, care must be taken for ensuring that the court used is the most appropriate forum with the suitable choice of law.

Advantages of Court Action

Compensations or an account of profits can be given in court actions. Brand holders can also claim back the expenses of bringing proceedings, where successful. However, it is likely that many individual registrants may not have sufficient assets to cover the costs of losing in court, not to mention the difficulties of tracking the registrant down. The court also has the power to issue injunctions against any future registrations of offending domains or in emergencies if it is convinced that there is a real risk of damage to the claimant’s business.

Disadvantages of Court Action

In general, these consist of the cost and length of proceedings.  Conversely, where it is a clear case of cybersquatting, the problem can be dealt with by summary judgment thus decreasing delay and, if an application for recovery of costs from the squatter is successful, excluding the cost to the brand holder.

Trade Mark Infringement

If the domain name does not have an active website or is not being utilized for the sale of goods or services, it may be tougher to establish that the trademark is being used “in the progression of trade”. It may also be hard to prove unfair advantage, although the up surged hits on a website could be assumed to increase the domain name’s worth. It may be easier to establish “detriment” to the distinguishing character or status of the mark.

Defamation

If defamatory material has been posted on a website, an action of defamation could be raised up. Conversely, it may be problematic to track down the person accountable and they may have limited means. Although the aggrieved one could claim that the ISP eliminates the defamatory material, failure of the ISP to eliminate it may make them answerable.

Purchasing

Registering every accessible domain name extension is not at all times possible or indispensable even for multinational organizations.  Registrations of ccTLDs and gTLDs must be targeted to the markets in which either the company will function or the trademarks will be used, or where the danger of infringement by cyber-squatters is quite high.  Many jurisdictions have registration requirements that make it very tough for organizations not functioning in that jurisdiction, or not holding trademarks being covered that jurisdiction, from registering a domain name there.  The danger of falling target to an expert cyber squatter is not much; however a rival business with the similar trademark rights falling in that jurisdiction may still attain the domain name before any person.

Register Common Misspellings

If a name is frequently spelt wrongly, it may be worthwhile to register the wrong spelling in order to avoid typo squatters.

Register the Domain Name as a Trade Mark

If a person does not already possess a registered trade mark, it is advisable for him to register his domain name as a trade mark. It is probable to be successful where the domain name is unique or has acquired a secondary meaning through prior use. Having a registered trade mark would support in any dispute resolution processes to recover a similar domain name from another registrant.

Consolidate Domains into One Company in the Group

It is a decent practice for a company to have the accountability for ensuring that all the domain names for a group are re-registered.

Active Monitoring

It is a great idea to actively control and check from time to time if any comparable domain names have been registered.  There are services existing which will actively monitor all fresh registrations and renew all the domain names.

Searches Prior to Registration

A search could be made to make sure that any newly registered domain names are not infringing any trademarks as a trade mark owner may be able to direct the transfer of the domain names, mainly if it is an undertaking in a related trade/business.

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In this blog post, Pramit Bhattacharya, Student, Damodaram Sanjivayya National Law University writes about the concept of quasi-contracts. The post talks about the difference between implied and quasi-contract, the notion behind the concept of quasi-contract, and the similarity and differences between contracts and quasi-contracts.

Contracts are those promises coupled with agreements that have legal sanctity and can be enforced. When a contract is made, both the parties are legally bound to fulfill the conditions of the contract. In the case of a quasi-contract, a certain relationship between the parties arise which is very similar to a contract, and this relationship consists of rights and liabilities created by the law.

Contract

A contract is an agreement between two or more parties which is recognized by law and can be enforced. The law provides remedies to the aggrieved party if the conditions or promises stated in the contract are breached. In the case of a contract, performance or non-performance of a thing is considered as a duty. To be legally binding the promises must be exchanged for some consideration. The adequacy if the consideration does not matter, but the Court may look into it if there arises a case of coercion or fraud.

For instance, there cannot be a promise to make a gift, because the donor is getting no consideration in return. Agreement to perform a promise can arise in three ways: standard form of contract, agreement and contract, and promissory estoppel.

Quasi-contract

The obligation arising out of a quasi-contract was first recognized by the English law. The Indian Contract Act, 1872 also follow the same elements which are followed by the English Contract Act. There is no definition given for quasi-contract in the Indian Contract Act. But the Act states that it in the case of a quasi-contract, certain relations are created which are very similar to contracts. But quasi-contract can be defined as a set of rights and liabilities between the parties even when there is no formal contract. The law creates this obligation to maintain justice and fairness between the parties. The law does not allow one person to enrich himself at the expense of the other. If the rights and obligations are not created (quasi-contract) one party would be unjustly enriched. Going by this, it can be said that a quasi-contract is kind of a remedy instead of being a pure contract. Formation of a quasi-contract allows the aggrieved party to recover the benefit which the enriched party has taken at his expense. Since a quasi-contract is a law made by law, there is no statement of consent between the parties. The obligation and rights which are placed on the shoulder of the parties are rather by law than by assent. [1]

Many times, a situation may arise that a legal obligation is placed on a person to uphold justice, even though, the person has not committed any tortious activity or has broken any contract.

For instance, X forgets c=some goods at Y’s place. Y’s is under a legal obligation to restore the goods to Y. this goes on to show that Y cannot enrich himself at the expense of X. such kind of obligations are described as Quasi-contractual Obligation. They are not actual contract in which the parties agree to enter, but are fictional agreements which are created between the parties by law so as to ensure equity.

In quasi-contracts the liability imposed is based on the doctrine of unjust enrichment. Quasi-contact is applied with regards to payment of services rendered or goods delivered or used. In such situations, the main question which arises is the liability of the person who got enriched. Since the basic concept of a quasi-contract is to prevent unjust enrichment, the liability of the enriched party is limited to the value of services rendered or cost of the goods used or delivered. Thus, the liability is limited to the amount of benefit only.

Implied-in-fact Contract and Quasi-contract

One of the main features of a quasi-contract is that there is no mutual consent between the parties. Quasi-contracts are often confused with implied-in-fact (or implied contract). The difference between a quasi-contract and an implied contract is that in the case of an implied contract even if there is no written statement of the fact that the parties want to enter into a contract, their actions and conduct imply that they have mutually agreed to enter into a contract.

For example, P goes to a restaurant for a dinner. The owner of the restaurant expects that P will pay for his food. P also knows that he’ll have to pay for the food which will be provided to him. Thus, the actions of the parties signify that they’ve mutually agreed to enter into an agreement, even though the agreement is not a written one. 

Notions behind Quasi-contracts

Quasi-contracts follow the principle of unjust enrichment, which came from the Roman Maxim, “nemo debet locule tari ex aliena jactura“ which in simple language means that no man must grow rich because of one’s personal loss.[2]

Quasi-Contracts falls under Chapter V of the Indian Contracts Act, 1872[3] under the heading “Of certain relations resembling those created by contract.” Although the word “quasi-contacts” is not expressly mentioned, it can be interpreted that the framers of the statute pointed towards the concept of quasi-contract and doctrine of unjust enrichment only. In the case of Hari Ram Seth Khandsari v Commissioner of Sales Tax,[4] The Court also agreed to the fact that, although the term has been avoided in this chapter, this chapter is about the doctrine of quasi-contracts.

The concept of quasi-contract was first discussed in the case of Moses v MacFarlane[5] (an English case). In this case, Lord Mansfield stated that such obligation was based upon the law as well as justice to prevent undue advantage to one person at the cost of other.

In the case of SpolkaAkeyjna v Fairbairn Lawson CombeBarbor Ltd,[6] the Court stated that the obligations which arise in such situations where one person are enriched at the expense of another- the obligation does not fall purely either under torts law or contracts law. They fall under the concept of “restitution or quasi-contracts.”

To summarize, to evoke the concept of Quasi-contracts, three conditions are required to be fulfilled as stated by the Court in the judicial pronouncement of Mahabir Kishore & others v. the State of MP[7]:

• There has to be an unjust enrichment due to receipt of a benefit.
• The enrichment should take place at the expense of some other party.
• The retention of such enrichment is unjust.

Similarity between a Contract and a Quasi-contract

The result of a contract and a quasi-contract are similar. The claim for damages under both is also similar. Section 73[8] of the Indian Contract Act that states that damages for quasi-contracts can be claimed which are same as for the breach of an express contract. The remedies available for a breach are also similar.[9]

Distinction between a Contact and a Quasi-contract

A quasi-contract can be considered as a constructive contract or an implication of law. It is just a fictitious contract, aimed towards providing a remedy to the aggrieved party, which is not the case in an express contract. In the case of quasi-contracts, the intention of the parties is not considered, but in the case of an express contract, the intention of the parties is very crucial as, without the intention to enter into an agreement, there would be no contract at all. In the case of an express contract, the duty of the parties defines the contract, which forms the terms of the contract. But on the other hand, in the case of quasi-contract, the duties are defined due the formation of a contract.[10] 

In words of Keener,[11] A quasi-contract is one which has been implied by the law, and it denotes the nature of evidence through which the aggrieved party can claim restitution. Though the party who has been enriched would not set out to assume any obligation, the law will impose it. In an express contract, both the parties have equal interests, but in the case of a quasi-contract, the contract comes into being because the interest of one party is affected.

Concluding Remark

As stated above, a quasi-contract is not a contract in the pure sense. It can be considered as a fictitious contract. This also may be the reason why the statute does not mention the term “quasi-contract” expressively, but indirectly covers the concept to prevent unjust enrichment. Therefore, the basis of a quasi-contract is very simple that a contract cannot override the requirement and sense of justice. When something is done for a person or a thing is delivered to him without a gratuitous intention, he is bound to make a compensation or restore the aggrieved party to his previous position.

Footnotes:

[1]The State of Punjab v. Hindustan Development Board, AIR 1960 P-H 585

[2]13^th Report, Law Commission of India, P.12; http://lawcommissionofindia.nic.in/1-50/report13.pdf

[3]http://comtax.up.nic.in/Miscellaneous%20Act/the-indian-contract-act-1872.pdf

[4]MANU/UP/1273/2003

[5](1760) 2 Burr 1005

[6]1943 AC 32

[7]Mahabir Kishore & others v. State of Madhya Pradesh, AIR 1990 SC 313

[8] Compensation for loss or damage caused by breach of contract

[9]Mulam Chand v. State of Madhya Pradesh, (1968) A.SC.1218

[10]T & S Inv. Co. v. Coury, 593 P.2d 503 (Okla. 1979)

[11]A Treatise on the Law of Quasi-Contracts. By William A. Keener, Kent Professor of Law and Dean of the Faculty of Law in Columbia College. New York: Baker, Voorhis, and Company. 1893. 8vo

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In this blog post, Pramit Bhattacharya, student, DamodaramSanjivayya National Law University, gives an overview about the capital punishment in India. The post discusses the concept of  “Rarest of the Rare” doctrine and also highlights some landmark judgments with regards to the issue.

The Death penalty is a process, where the life of a person is taken by the State by following the due procedure of law. Capital punishment is, in all cases, given for the most heinous of crimes. During recent times, there has been a global trend to abolish the capital punishment. However, India has yet not abolished the capital punishment (though the Court awards the capital punishment in rarest of the rare case). What makes the capital punishment a unique form of punishment is the nature of irreversibility attached to it. If any error has been committed to awarding the death penalty, it cannot be undone after the person has been executed. (Many people give this argument for abolishing the capital punishment.)

Although the death penalty has existed from time immemorial, the movement to abolish it has gained a lot of momentum in the recent times. This movement can be traced back to the works[1] Of one of the great criminologist named CessareBeccaria, who convinced many people that death penalty should be abolished because it is inhuman, useless and technically speaking, a public assassination. In the year 1846, Michigan became the first State to abolish the capital punishment, followed by Portugal and Venezuela in 1867. Abolition of the death penalty was also supported by the United Nations during the drafting of Universal Declaration of Human Rights in the year 1948.[2]

Around the world, 58 countries still practice awarding the capital punishment. 102 countries do not award capital punishment for any crime, i.e. total abolition.[3] According to the reports of Amnesty International China, Iraq, and Iran have awarded highest number of death penalties in the recent years. In Europe, the death sentence has been almost abolished completely, except The Republic of Belarus retaining it.[4]

Position in India

Article 21 of the Indian Constitution states that no person shall be deprived of his life and liberty except according to the procedure laid down by law. Under Article 21, every person has the Right to Life which has been guaranteed by the Constitution.

The Indian Penal Code, 1860 provides for the provision of a death sentence for various offenses like criminal conspiracy, murder, waging war against the nation, dacoity and murder, etc. Various other legislations like the NDPS ACT and Unlawful Activities Prevention Act also provides for the death penalty.

Under Article 72, the Constitution has created a provision for clemency of capital punishment. Under this Article, the President of India has the power to grant pardon, or commute or remit the death sentence in certain cases. Similarly, Article 161 provides for powers of the Governor of the State to grant clemency.

Also, when a Sessions Court awards the capital punishment, it must be confirmed by the High Court of the particular state, and then only the execution can be carried out.

These measures are necessary so as to remove any room for error. These days, awarding life sentence has become the rule, and death penalty an exception, which is awarded only in the rarest of the rare case. The case of Jagmohan Singh v State of U.P[5] Was the first case in which the court had the opportunity to discuss the Constitutionality of capital punishment. The council for the appellant put forth the argument that capital punishment takes away all the rights guaranteed under Article 19 (1) of the Constitution. The second argument which was given that the discretion of which capital punishment was awarded did not follow any fixed standard or policy. Thirdly it was argued that this unguided and unfettered discretion violated Article 14 of the constitution, which guarantees equality before the law. It was stated that in many cases, the situation arose that where two individuals had committed a murder, one was awarded the capital punishment, and other was awarded life imprisonment. The last argument which was put forward was that the law does not provide any guidelines which considers different factors and circumstances while awarding death penalty or life imprisonment.

Law Commission Report

A discussion on death penalty cannot be complete without taking into consideration the 36^thReport[6]of the Law Commission of India, which was submitted by the Law Commission in 1967.

The Report stated that the issue of abolition or retention of capital punishment should be decided after balancing the arguments given in favor and in against of death penalty. A single factor cannot decide the question of abolition or retention of death penalty in the country. The Report also vocally stated that the question of protecting the society must be given prime consideration while deciding the issue.

The Commission did consider the strong arguments given for abolition of capital punishment. They also considered the concept of irrevocability attached with the punishment of a death penalty. Nor did they ignore the fact that capital punishment was very severe, and a modern approach was required to deal with criminals. But considering the state of the nation, the Commission stated that, keeping in mind the way of upbringing of the citizen, the disparity level in educational and moral levels of the people, the vastness of the area, the diversity of the nation and the utmost need to preserve law and order, India cannot risk abolishing the capital punishment yet.

In the judicial pronouncement of Ediga Anamma v State of Andhra Pradesh[7], Justice Krishna Iyer commuted the death sentence of the accused to life imprisonment considering factors like gender, age and socio-economic background of the accused. In this case, the Court laid out that apart from looking into the circumstances of the crime, the Court should also look into the condition of the accused. This case was followed by some important developments. Section 354 (3) was added to the Code of Criminal Procedure, 1973 which stated that in cases where capital punishment was being awarded, the Court has to give special reasons for it. This made life imprisonment a rule, and death penalty an exception, which was the other way round earlier.

In 1979, India also became a signatory to the International Covenant on Civil and Political rights (ICCPR).[8] In the case of Rajendra Prasad v State of U.P[9] the Apex Court, however, stated that the question whether capital punishment should be abolished or retained was a question for the Legislature and not for the Courts to decide.

The case of Bachchan Singh v State of Punjab again brought up the question of the validity of capital punishment and in this case, the doctrine of “rarest of the rare” was formulated. The five Judge Bench stated that the taking of human life shouldn’t be encouraged even in the form of punishment except in “rarest of the rare” cases where no alternative method can be used and is foreclosed.

When the validity of capital punishment was questioned, the bench (majority decision) opined that capital punishment did not violate either Article 19 or Article 21 of the Constitution. They also pointed out to the fact that the makers of the Constitution were fully aware that the capital punishment may be awarded in some cases, and it was proved by the existence of the provision of appeal and provision of pardoning powers of the President and the Governor. It was also laid down that mitigating, and aggravating factors should be considered while deciding the matter.

In the judicial pronouncement of Mithu v. State of Punjab[10], mandatory death sentence, under Section 303[11] Of IPC was declared unconstitutional and deleted from the IPC. This section was based on the logic that any criminal who has been convicted for life and has committed a murder while in custody is beyond reformation and do not deserve to live.

The case of Machchi Singh v State of Punjab[12] elaborated the doctrine of “rarest of rare.” The Court gave guidelines regarding the things to be considered when deciding on the issue that whether the case falls under the category of “rarest of rare” or not. 

The following are-

1. Manner of Commission of the Crime: The Court stated that if the crime were committed in extremely brutal and diabolic manners so that it arouses the intense indignation of the society, it’d fall under the rarest of the rare case. Some instances were given like when the house of the victim is set to flame with the objective to burn him alive, or the victim is subjected to inhuman cruelty and torture, or when the body of the victim is chopped and mutilated, it’ll be considered as a rarest of rare case.
2. Motive for Commission of the Crime: When the crime is committed in furtherance to betray the nation, or assassins are hired to kill the victim, or any deliberate design is made to kill the victim in a cold-blooded manner, it’ll also fall under the said category of rarest of the rare.
3. Magnitude of the Crime: When the crime is humongous in proportion, for example, killing all the members of the family or a locality is done.
4. Socially Abhorrent Nature of Crime:When the crime is such that it is socially abhorred, such as killing a person belonging to the backward classes of the community, or burning of a bride in case dowry wishes are not met, or murdering a woman to remarry again.
5. Victim of the Crime: If the victim of the crime is a small child, who couldn’t have provided any reason to the accused to commit the crime, or the crime is committed against a helpless woman, or an old person, and if the victim was mentally challenged, or the victim was a public figure who was loved by the society, the crime will fall under rarest of the rare case.

In the case of Allauddin v State of Bihar,[13] The Court stated that in case the Court was unable to give a special reason for awarding the capital punishment, the Court should go for a lower sentence. In the case of Kehar Singh v Union of India,[14] Assassins of the then Prime Minister, Indira Gandhi, were sentenced to death. Kehar Singh was one of the conspirators who took part in the planning of the murder but did not commit it. The Court stated that even this fell in the rarest of rare category.

The case of Santosh Kumar Bariyar v State of Maharashtra[15] Can be considered one of the cases where a major step towards abolition of the death sentence was taken. In the following case, the accused along with three other people kidnapped a person and then demanded a ransom of 10 lac rupees. When the demands were not met, the kidnappers killed the victim and chopped his body into pieces and then disposed of the victim’s body by throwing, the pieces are various locations. Although the manner in which the crime was committed was extremely brutal, the Court considered the mitigating factors and opined that the case was outside the ambit of “rarest of the rare” category. The reasoning of the Court was that the accused were not professional killers, and they committed the crime with the sole motive of collecting money. The Court opined that in such circumstances, there was a chance that they might be reformed and opted for the lesser punishment of life imprisonment.

In the year 2012, the judicial system had to suffer two major embarrassments.[16] The first instance was when fourteen retired judges asked for thirteen cases of capital punishment to be commuted admitting that the capital punishment was awarded out of ignorance or error in these cases. The second instance was where, the then President Pratibha Patil commuted the death penalty of a convict to like imprisonment, and it was later known that he had already died five years previously.

After these incidents, the protest against awarding of capital punishment gained more momentum. In 2012, Ajmal Amir Kasab was executed by the State for his involvement in the Mumbai Terror Attack. Then in 2013, Mohd. Afzal, the mastermind of the 2001 Parliament Attack was also executed. The verdict of the Nirbhaya Rape case was also given in 2013 where the accused were awarded death sentence; this decision also reignited the debate regarding the death penalty.

Concluding Remarks

India’s view on the issue of capital punishment is still very topsy-turvy. The debate is not only about the legality of the punishment but also include social and moral aspects. If the question of law is kept aside, two views can be given on the issue. The first view is the security of the society, and the public sentiments. The counter view is that it promotes the principle of “eye for an eye” which can’t be accepted in a civilized society. On one hand by retaining the death sentence, we may condemn someone to death, who turns out to be innocent. On the other hand, by giving a second chance to someone, we might be giving them a bullet to shoot us, just because they missed the first time.

Footnotes:

[1]Dei delitti et DellePene (On Crimes and Punishment), written in 1764

[2]http://www.lawctopus.com/academike/death-penalty-an-overview-of-indian-cases/

[3]http://www.deathpenaltyinfo.org/abolitionist-and-retentionist-countries?scid=30&did=140#1976

[4]https://www.amnesty.org/en/search/?sort=relevance&q=DEATH+SENTENCES+AND+EXECUTIONS+IN&contentType=2564&documentType=Report

[5]Jagmohan Singh v. the State of U.P , (1973 1 SCC 20)

[6]http://lawcommissionofindia.nic.in/reports/report262.pdf

[7]EdigaAnamma v. State of Andhra Pradesh, AIR 1973 S.C. 774

[8]Article 6(2) of the ICCPR says:  “In countries which have not abolished the death penalty, sentence of death may be imposed only for the most serious crimes in accordance with the law in force at the time of the commission of the crime and not contrary to the provisions of the present Covenant and the Convention on the Prevention and Punishment of the Crime of Genocide.”

Sub- section 5 of the same Article says that no sentence of death shall be imposed on anyone under the age of 18 years and none can be carried out on pregnant women.

[9]1979 AIR 916

[10]Mithu v. the State of Punjab,  (1980) 2 SCC 684

[11]https://indiankanoon.org/doc/793437/

[12]Macchi Singh v. State of Punjab (1983) 3 SCC 470

[13]Allauddin v. State of Bihar, AIR 1989 SC1456

[14]Kehar Singh v. The Union of India,  (AIR 1962 SC 955)

[15]Santosh Kumar Bariyar v. the State of Maharashtra , JT2009(7)SC248

[16] Supra 2

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In this blog post, Pramit Bhattacharya, Student, DamodaramSanjivayya National Law University writes about the problem of oppression in the corporate sector. This post discusses the provisions of law which deals with the issue. This post also highlights the scope of the law which deals with the problem.

In India, the corporate sector faces a lot of problems in protecting the interest of the minority shareholders. Although, the problem is related to the minority shareholders, the real issue lies in controlling the majority shareholders. It is very vital that majority shareholders are prevented from dominating the minority shareholders and thus prevent mismanagement and oppression. To end this dominance, Indian laws now provides for the empowerment of the minority shareholders. The minority shareholders are also given some special powers.

Today, ownership and management have assumed a very separate role from each other. The owners are now unable to control the management effectively and efficiently. The running and operations of a corporate totally depends upon the Board or the Management and the owners have very less to do with the running of the company.

Talking about the issue of mismanagement and oppression in the Indian context, it can be said that the Board is not the Central figure in this problem. There is not much conflict between the owners and the management. The skirmish is between the minority shareholders and the majority shareholders. In such a case, it becomes difficult even for the management to find a solution because at the end of the day it is the dominant shareholders on whom control needs to be exercise, which becomes practically impracticable for the management.

Minority shareholders can be defined as a large group of people who are holding substantially fewer shares in the company as compared to majority shareholders, who hold a large chunk of shares in the company. For instance, suppose a company has 100 shareholders. 80 of them are holding only 20% of the shares. The rest 20 members are holding 80% shares of the company.

Old Companies Act, 1956

Under the old Companies Act, Section 397 governs the issue of oppression and mismanagement.Section 397 is based on Section 210 of the English Companies Act, 1948.[1] Before proceeding further, it is important to understand the relevance of Section 210 of the ECA, 1948. Section 210 of the ECA provides for an alternative remedy to wind up in case minority shareholders are being oppressed. This Section states that if any person feels that the activities are business are carried on in such a manner that it is oppressive to a part of members (including himself), then the Board of Trade may file an application in this regard to the Court. The Court after forming its opinion on the issue, and with a view to stopping such practices which are oppressive may make any order including regulating the affairs of the company or regulate the purchase of shares of the company, etc. 

Coming back to the Indian Statute, Section 397[2] allows a person to file an application to the Company Law Board for relief, in case there is any oppression.

Section 397 reads that if any member of the company feels that the activities of the business are being carried on in such a manner which is oppressive to any member (s) or is against public interest, the person may file an application to the Company Law Board, seeking a remedy, provided that the person is eligible to file the application under Section 399.[3]

If the Company Law Board is of the opinion that, indeed the business activities are being carried on in such a manner, the Company Law Board can pass an order which it thinks fit, with the view to stop such activities.

Under this Section, the condition for maintainability of the application is very clearly mentioned. The activities of the company should be such that they are prejudicial to the interest of the company, or against the public interest, or is oppressive towards a part of members. The burden is on the applicant to prove that winding up of the company would be unfairly prejudicial to his interest, but prima facie, the facts clearly indicate that it would be justifiable to wind up the company on fair and equitable grounds. There are two conditions which are to be fulfilled to get relief under this Section. The first is that the person should have the right to file an application (he should be a minority as specified under the definition of “minority”). Secondly, there should be allegations to support winding up. In case there are no such allegations, an application cannot be filed under this Section.

In the judicial pronouncement of Killick Nixon Ltd. v Bank of India,[4] it was opined by the Court that it is not necessary that a personal prejudice has been caused to the applicant. The cause of action arises from the fact that the company was operating in such a manner that they were against the public interest, or oppressive and prejudicial to some of the members of the company. Oppression of other members can also be a valid locus standi.

Due to the use of the term “public interest” in the Section, the ambit of the Section is very wide. So the cause of action can be justified when the oppression is not taking place against any member of the company, but a third party is suffering. In cases of corporates, the concept of public interest in very important because operations of a company affect not only the “shareholders” of the company but other “stakeholders” also. It is argued that when a company is operating in society, it has some responsibility towards the society, and anyone who is impacted by the actions of the company and is reasonably connected with the enterprise, is a “stakeholder.”

Oppression Meaning

In India, the statute and the Courts have borrowed the definition of oppression from the words of Lord Keith, which he said in the case of Scottish Co-operative Ltd. v Meyer.[5] The definition given by Lord Keith was used in the Indian case of Needle Industries (India) Ltd Needle Industries Newey (India) Ltd.[6] According to Lord Keith oppression meant lack of morality and fair dealings in the affairs of the company, which may be prejudicial to some member of the company. 

Scope of the Law

In the case of Shant Prasad Jain v Kalinga Tubes Ltd,[7]  the Apex Court gave its view on the requirements of filing an application under Section 397. It stated that it is not enough to show there is a just and equitable ground to wind up the company. It is necessary to show that the majority shareholders acted in such a way that it was oppressive towards the other party. The events have to be seen as a whole. The majority party should act in an oppressive way continuously, up to the date petition is filed. Their conduct should have been wrongful and harsh towards the minority shareholders. Just the mere lack of confidence between the two parties do not give rise to a cause of action. There should be an element of lack of probity and fairness in the dealings between them.

From the above statement, it can be said that the burden lies on the shoulders of the applicant. Through this judicial pronouncement the requirement of “continuous activities” have been added as a requirement. Thus, a one-off incident would not attract Section 397.

New Companies Act, 2013

Under the new Act (2013), Section 241 and 242 govern such cases. These two Sections are very similar to Sec 397 of the old Act. The only major difference is that Section 241 (1) (b) of the new Act has provided an additional ground for filing an application. It states that-

“ the material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in the Board of Directors, or manager, or in the ownership of the company’s shares, or if it has no share capital, in its membership, or in any other manner whatsoever, and that by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial  to its interests or its members or any class of members.”[8]

Interpreting this clause, it can be understood that this clause gives the minority shareholders a pre-emptive remedy. Under this clause, they can file an application to prevent any change in the original structure of the company, if they have the grounds to believe hat such a change would be prejudicial to their interests.

The legislature has tried to provide as much safeguard as it can to every shareholder of the company. The minority shareholders are also given some rights to protect their interests. Under the 1956 Act, the minority group was given specific rights exercising which they could convey their opinion to the management and the Board and also challenge the decisions of the majority shareholders.

There is a concept of minority “squeeze out” also in the corporate law. The concept follows the principle that the majority through various means try to obtain the share of minority shareholders and acquire administrative stronghold. In the old Act of 1956, Section 395[9] directly dealt with this issue. Under the new Act, this concept is dealt under Section 236.[10]

 The Company Act, 2013 tries to ensure that the rights of the minority shareholders are protected in as many ways as possible because their share in a company is no less important than the share of the majority shareholders. The law must strive to protect the rights of the minority group.

Footnotes:

[1]http://www.legislation.gov.uk/ukpga/1948/38/Section/210/enacted

[2]https://indiankanoon.org/doc/146869/

[3]https://indiankanoon.org/doc/152161/

[4] 1982 Tax LR 2547 (Bom).

[5][1958] 3 All ER 66.

[6] (1981) 51 Com Cas 743, 777.

[7](1965) 35 Com Cas 351.

[8]https://aishmghrana.me/2013/06/14/oppression-mismanagement/ ; http://www.lawctopus.com/academike/oppression-mismanagement-corporate-law/

[9]Power and duty to acquire shares of shareholders dissenting from scheme or contract approved by majority.

[10]Purchase of minority shareholding.

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In this blog post, Pramit Bhattacharya, Damodaram Sanjivayya National Law University writes about the role and position of a Promoter of a company. The post dwells into the duties and liabilities of a promoter and also looks into the position of the promoter before the incorporation of the company and after the process of incorporation is complete.

To form a company, there are several steps involved. The first step in forming a company is the promotion. This is the stage where the idea to form a company is conceived. This idea is conceived by the promoter, and he undertakes all the formalities which are required to form a company. The promoter does all the preliminary work which is required to bring the company into existence. It is not necessary that only a person who is associated with the company at the initial period is considered as a promoter. A person who floats the securities of the company and helps them generate funds can also be the promoter.

Definition

The definition of the phrase “promoter” has been defined in Section 2 (69)[1] of Companies Act, 2013.  The term has been used specifically in Section 35, 39, 40, 300 and 317 of the Act. Section 2 (69) of the Act states that promoter is a person whose name has been mentioned in the prospectus of the company or is identified in the annual returns of the company, or any person who has direct or indirect control over the affairs of the company, whether as a stakeholder or as a director, or on whose direction the Board of Directors act. In simple words, a promoter is a person who performs the various preliminary steps like making the prospectus of the company, floating the securities in the market, etc. but if a person is doing this in a professional capacity, he wouldn’t be considered a promoter. 

Types of Promoters

As stated above, a promoter is the one who conceives the idea of formation of a company. An individual, an association of person, a firm or a company, can act as a promoter. A promoter may be an occasional, professional, managing or financial promoter. A professional promoter is the one who hands over the rein of the company to the stakeholders when the company is up and running. Financial promoters are those promoters, who promote financial institutions or banks. Their main aim is to assess the financial situation of the market and form a company at the opportune moment. In the case of managing promoters, they not only help in the formation of the company but when the company is formed, they get managing agency rights in the company. Occasional promoters are those whose main work is to float the company and do all the preliminary work. Although they do not do the promotion work routinely, they may float a company and then go back to their original profession.

Functions of a Promoter[2]

A promoter plays various function in the formation of a company, from conceiving the idea to taking all the necessary steps to convert the idea into reality. Some of the functions of a promoter are-

• One of the main functions of a promoter is to comprehend the idea of formation of the company.
• The promoter looks into the viability and feasibility of the idea that whether the formation of the company will be profitable and practicable or not.
• After the idea has been conceived, the promoter collects and organizes the resources available to convert the idea into a reality.
• The promoter decides the name of the Company and also settle the content regarding the Articles of Association and the Memorandum of Association of the Company.
• The promoter is the one who decides where the head office of the company will be situated. The promoter also nominates people or associations for vital posts. For instance, the promoter may appoint the bankers, auditors and Directors of the company for the first time.
• The promoter also prepares all the other necessary documents which are required to incorporate a company.

Defining the legal status of a promoter can be a very tough job. He cannot be considered an employee, trustee or an agent of the company. The role of the promoter ceases to exist when the company is on the track and is handled by the Board and the Management.

Duties of a Promoter

The promoters who form the company have certain basic duties towards the company. A promoter has a relationship of confidence and trust with the company, i.e., a fiduciary relationship. Keeping this fiduciary relationship in mind, the promoter is under the obligation to disclose all the material facts which relate to the formation of the company. The promoter is also under the obligation to not take any secret profit while carrying out the promoting activities like buying a property and then selling it to the company for profit, without making any disclosure. The promoter is not barred from making profits while dealing with various parties. The only condition is that he is under the duty to disclose such profits and not make any secret profits.[3]

Liabilities of a Promoter

• A promoter has to mention the true facts in the prospectus of the company. If he does not do so, he may be held liable for it. The promoter will be liable for any untrue statement which has been made in the prospectus, and on the basis of that untrue statement any person has subscribed to the securities of the company. The person may sue the promoter if he has suffered any damage.
• Apart from civil liability, the promoter may be held criminally liable also for mentioning any untrue statements in the prospectus. A severe penalty will also be imposed on him if he provides any untrue statement with the view of obtaining capital.
• A promoter can be made liable to a public examination if there are any reports which allege fraud in the formation of the company or the promotion activities.
• The company can also proceed against the promoter in case there is a breach of duty on the promoter’s part or he has misappropriated any property of the company or is guilty of breach of trust.

Position of a Promoter in Relation to the Company- Before and After Incorporation

Prior to Incorporation of the Company

Promoters found it extremely difficult to carry out promotion activities before the Specific Relief Act was introduced in 1963. Before this Act was passed, pre-incorporation contracts of the company were held to be void. Such contracts also couldn’t be ratified. Therefore, people were very hesitant to supply resources for incorporation of the company without any definite contract. Promoters were also very apprehensive about taking personal liability. The introduction of the Specific Relief Act, 1963[4] made it easier for the promoters to carry out incorporation activities, as the promoters could now enter into pre-incorporation contracts with third-parties.

Section 15 (h) and 19 (e) states that

• The promoter should have entered into the contract for the purpose and benefit of the company
• The terms provided in the incorporation agreement should warrant such contracts.
• The contract should be ratified after the company, and it should be informed to the opposite party.

A contract made between the promoter on the behalf of the company and the third parties will still be considered as a contract between two individuals. The right to ratify a contract does not lie with the company inherently. The authority of ratifying a contract should be given to the company through its memorandum. So a company cannot be sued by the third party if the company does not ratify the contract, even if the contract was beneficial for the company.

In case the company does not have the authority to ratify the contract (because such authority has not been provided in the Articles), or the company does not ratify the contract, then the promoter will be personally liable.

After Incorporation of the Company

After the company comes into existence, and in case it ratifies the contract entered into by the promoter, in such a case the contract will become binding on the company and not the promoter. Section 15(h)[5] and 19 (e)[6] also state that the promoter can transfer his rights and liabilities to the company, provided that such provision is present in the incorporation agreement. Although the promoter is not entitled to any kind of salary and remuneration. But the general trend is to compensate the promoter in lump-sum after the company has been set up. A promoter cannot be asked to be compensated as a legal right. If the promoter is compensated at all, the compensation given to him is on the basis of equity ad fairness. If any shares are being allotted to the promoter of the company, the promoter also becomes a member of the company automatically.

Concluding Remarks

It can be said that a promoter can be an individual, a company, or an association of person which conceives the idea of formation of a company, undertake all the activities which are necessary for the company’s incorporation and brings about the actual existence of the company as a separate legal entity. The promoter nominates the directors, bankers and auditors of the company and also decide the contents of the Articles of the company. The promoter can be called as a molding block who gives basic shape to the company, and his role is of utmost important.

Footnotes:

[1]http://www.mca.gov.in/SearchableActs/Section2.htm

[2]http://www.legalindia.in/promoters-of-company ; http://accountlearning.blogspot.in/2011/04/company-promoters-and-their-functions.html

[3]http;//www.legalserviceindia.com/company%20law/com_1.htm

[4]http://www.advocatekhoj.com/library/bareacts/specificrelief/index.php?Title=Specific%20Relief%20Act,%201963

[5]http://chddistrictcourts.gov.in/the%20specific%20relief%20act.pdf

[6] Ibid.

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In this blog post, Surbhi Kapoor, a student of Amity Law School, Delhi IP University writes about hacking, a cyber crime covered under the Information and Technology Act, 2002. The article differentiates between a hacker and cracker, which not many people know. It also talks about laws against hacking in India, the essentials that constitute hacking and how a complaint against hacking should be filed.

Introduction

As the country progresses towards a digital age where everything would be available with the click of a button, the threat of data and private information being stolen has constantly been disturbing. It is ironical to see that the most trusted source of information and a store for data can turn out to be a wide platform for some to steal information. The Information and Technology Act, 2000 (IT Act) covers all types of cyber crime committed in the country including hacking.

Hacking earlier used to refer to a crime under section 43 of the IT Act but at the same time, ethical hacking or better known as white collar hacking was considered legal. Ethical hacking is also being taught by various professionals at schools and colleges. So a need was felt to differentiate between good and bad hacking. Under the amendment IT Act in 2008, the word ‘hacker was removed from the act. The reason for the same was that ethical hacking is taught by a lot of professionals at various schools and colleges, and colleges cannot teach anything illegal. So the same word should not be used. The amendment rephrased section 66 and section 43 by removing the word hacking from the Act.

Hacking in India

There have been numerous hacking attacks on Indian government websites where state government websites or defense websites have been hacked. Some time back, the Principal Comptroller of defense accounts website was hacked due to which defense officials could not access their salary information. The government, to reduce hacking of precise work, has agreed to the proposal of DEITY, which is the department of information and technology to stop using popular email ids for official purpose and has sanctioned a budget of Rs. 100 cores to safeguard the data. The websites of state governments have also been hacked in the past. The official website of Maharashtra government was hacked, and the hackers were not traceable.There have been some professional hackers in India who have taken huge amounts to hack data from websites. In the infamous case of Amit Tiwari, who was a global hacker, he has hacked more than 950 accounts since 2003 and was caught by the police only in 2014. This shows the lack of evidence and the difficulty in arresting a hacker.

Hacker Vs Cracker

There is a very slight line of demarcation drawn between the two words- hacking and cracking after the amendment of the IT act in 2008. Hackers are those people who are very good at computer programming and use their skills in a constructive way to help the government and various other organizations to protect their important information and company secrets. They try to discover loopholes in the software and find reasons for the same. They constantly try to improve the programs to improve the programming. They never intentionally damage the data. Whereas cracker id the one who intentionally breaks into the computer programs of others without having the authority to do so and has a malicious intention to harm the network security. However, there is a huge misconception about the two and both the terms are used interchangeably in today’s context even when they mean different.

The liability of the cracker 

Civil liability

Section 43A of the IT Act deals with the civil liability of cyber offenders. The section deals with the compensation that should be made for failure of protection of the date. His was introduced under the amendment of the act in 2008. The corporate responsibility for data protection is greatly emphasized by inserting Section 43A whereby corporate are under an obligation to ensure adoption of reasonable security practices. Further, what is sensitive personal data has since been clarified by the central government vide its Notification dated 11 April 2011 giving the list of all such data which includes password, details of bank accounts or card details, medical records, etc.

Penal liability

Penal liability of cracking arises when the intention or the liability of the cracker to harm the system or steal any important information gets established. If the cracker only trespasses the system without any intention to harm, it only remains a form of civil liability under section 43A. The criminal trespass can also result in other penal activities punishable under Indian Penal Code like cyber theft that can be punishable under section 378 of Indian Penal Code.

Essentials of hacking under section 66

Intention-whoever with a malicious intention breaks into the computer of the other to tamper or steal the data or destroy it has a wrong intention.

A wrongful act or damage to the data or tries to diminish the value of the data will cover under hacking.

Laws on hacking in India

Section 43 and section 66 of the IT Act cover the civil and criminal offenses of data theft or hacking respectively.

Under section 43, a simple civil offense where a person without permission of the owner accesses the computer and extracts any data or damages the data contained therein will come under civil liability. The cracker shall be liable to pay compensation to the affected people. Under the ITA 2000, the maximum cap for compensation was fine at Rs. One crore. However in the amendment made in 2008, this ceiling was removed. Section 43A was added in the amendment in 2008 to include corporate shed where the employees stole information from the secret files of the company.

Section 66B covers punishment for receiving stolen computer resource or information. The punishment includes imprisonment for one year or a fine of rupees one lakh or both. Mens rea is an important ingredient under section 66A. Intention or the knowledge to cause wrongful loss to others i.e. the existence of criminal intention and the evil mind i.e. concept of mens rea, destruction, deletion, alteration or diminishing in value or utility of data are all the major ingredients to bring any act under this Section.²

.The jurisdiction of the case in cyber laws is mostly disputed. Cyber crime does not happen in a particular territory. It is geography less and borderless. So it gets very difficult to determine the jurisdiction under which the case has to be filed. Suppose a person works from multiple places and his data gets stolen from a city while he resides in someother city, there will be a dispute as to where the complaint should be filed.

How to file a complaint about hacking

A complaint about the cyber crime can be filed at any cyber cell globally. There are various cyber crime cells in India; a complaint can be filled at any of these

Firstly write an application to the head of the cyber cell department and the complaint should contain the name, address, e-mail and telephone number.

Secondly, submit the following documents with the cell;

1. Server logs- log files that get automatically with the server when files are opened. It saves a list of activities performed on day to day basis.
2. Hardcopy and soft copy of the defected material- all the material that has been tempered with by the hacker needs to be submitted with the cyber cell as evidence.
3. A hard copy of the original web pages and the defaced ones- copies of both the original and defaced material should be submitted so that it makes the work easy to locate the defaced or tampered material.
4. Details of the control mechanism where the complainant needs to tell the details of those who had the access to the password and the computer.
5. If there is any suspicion on any person, a list of the suspects should also be given for further reference that could help the cyber cell in investigation

Now days there are even provisions for the complainant to get the access of the complaint filed and to check the status online without going anywhere.

Conclusion

There is no doubt that hacking poses a serious threat to the virtual world. Not many people in the country are aware of this theft. There needs to be more awareness in the country regarding hacking and cracking. The laws made by the government are stringent but lack a bit of enforceability and awareness in the society. Most of the minor cases of hacking go unnoticed because people abstain from filing cases for petty crimes even when there is harsh punishment for it.Also, it is very difficult to track a virtual hacker due to lack equipment. Since hacking can happen anywhere in the world, it gets tough for the police to trace him and punish him in another country. The punishment can also be a bit more harsh to prevent people from indulging in such acts.

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This Blog Post has been written by Surbhi Kapoor, a Student of Amity Law School, Delhi GGSIPU. The article talks about the problem of communalism and religious intolerance that has existed in India for several decades even after living together for so many years. This article highlights these political issues and tries to give the judicial aspect of the same.

India is the country that gave birth to four religions that have lived harmoniously for decades, but they now stand divided on certain incidents that are termed as communal and political controversies. There have been few mishaps in the country that are termed as political strategies to disharmonize our secular nation. In the light of events like Dadri Lynching, Beef Ban, JNU sedition charge, various academicians returning their awards, there have been more debates in the country about whether India is intolerant or not rather than solving the core issues that gave rise to such incidents. This poses a serious threat to the very foundation of modern India.  Some of the political or rather culturally insecure groups are trying to change the democratic and secular structure of the country into a purist state.

Communalism is one of the most serious problems that India has to face after freedom from colonial rule. In 2013, during the UPA regime, there have been 823 communal riots, and the number reduced to 561 in 2015 (till October) which is he NDA government. Even when the statistics depict a different picture, people believed in a mirage created the media and some parties.This problem, which has existed among the followers of two principal religious communities- Hindus and Muslims – many times raised a great challenge before the secular structure of India. Some of the acts done in the name of religion are shameful and take us miles away from freedom and democracy for which our nation fought for over 100 years.

There have been certain incidents in the country like in Dadri and with various rationalists elsewhere are regrettable and should not happen in any civilized society, but such incidents have been happening in the country since independence and few political parties along with media are making a hue and cry of the same. Repeat a lie a thousand times and it becomes the truth, this is what today media is doing to raise the issue of intolerance in the country.

I strongly condemn some of the slogans that impose a threat to national security raised at the JNU in a row of the event of Judicial killing of Afzal Guru. People who talk about breaking the country into pieces call it freedom of speech protected under Article 19, but neither the constitution nor any law in our country allows it as restrictions are placed on article 19(2).

Recently a number as large as 36 academicians and rational scholars have returned their awards to show their anger against growing intolerance in the country but a large chunk of the society fails to understand why this is happening in such a large number now when there have been more serious issues in the past like imposition of emergency in 1975 where forced sterilization took place in the mane of family planning. No person had the locus to move writ to the high court or challenge the legality of any order of detention[1] or during the Sikh riots were 3,000 Sikhs were killed in the capital according to Abuja Committee Report[2].

The major question that lies on this Sahitya Akademi award winners is that were those issues too small for them to return their awards or is it a publicity stunt to remain in the limelight. The ban on the slaughter of cow was highly criticized by some political parties that are trying to make political gain out of an economic issue. Unfortunately, the current government is blamed for such laws in the country even when they have been imposed by the previous governments. The regulation of cow slaughter comes under state list under India’s Constitution under the seventh schedule. The incident in Dadri where a man was allegedly killed for consuming beef is highly misfortunate and should not have happened. However the charge sheet does not mention beef anywhere, and the incident should not be politicized.

The first case was of Mohammad Hanif Qureshi v. State of Bihar[3] in the year 1958 where the Supreme Court had to decide if the ban on cow slaughter in Bihar, Uttar Pradesh, and Madhya Pradesh were an infringement of the fundamental rights of the petitioner granted under Article 14, 19(1) g, 25 of the Indian constitution. The Court gave the contention that directive in Art. 48[4] allow the State to prevent the slaughter of cows and calves and other animals that are presently or will potentially be incapable of yielding milk or of doing work as a draught). The Court further mentioned that directive principles should run as subsidiary to the fundamental rights.

The Committee on National Integration had suggested some measures in 1969 regarding the manner of celebrating festivals to cultivate a sense of respect for religious beliefs and prevention of acts of desecration of idols or violation of customs observed by others. There should be a sense of peace and brotherhood among people to keep the anti-national and religiously conflicting ideas away.

The media should spread the message of brotherhood and secularism rather than try to politicize every petty issue. Repeat a lie thousand times and it becomes the truth. This should not be the agenda of the media to defame the current government that is working towards a smart and developed nation. Implementation of the uniform civil code that would bring uniformity in personal laws as it would bring every citizen of the country under one roof. To reduce the burden of the judiciary and to improve the secular concept of the country, it is mandatory to do away with personal laws.

Footnotes:

[1] ADM Jabalpur v. S K Shukla, AIR 1976 SC 1207

[2] Submitted under Justice Nanavati Report of inquiry to Ministry Of Home Affairs

[3] 1958 AIR 731

[4] The State shall Endeavour to organize agriculture and animal husbandry on modern and scientific lines and shall, in particular, take steps for preserving and improving the breeds, and prohibiting the slaughter, of cows and calves and other milch and draught cattle

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In this blog post, Surbhi Kapoor, a student of Amity Law School, Delhi GGSIPU writes about the increasing menace of plagiarism in today’s academic world since research scholars have used this resort to complete their research work in a great magnitude.  The article mentions about all the laws that govern plagiarism, types of plagiarism and differentiates between plagiarism and copyright infringement which is commonly used interchangeably.

Completing last minute assignments in schools and colleges is no more a big task. The credit for same goes to the internet and also books where tons of articles are available for reference. Though these articles are available only for secondary help, the students are expected to write in their words so that they get a sense of understanding of the topic. Isn’t that the reason why students are given research work? But most of us will agree that technology has made our life very easy. With the press of a few buttons like cut, copy and paste, it is now a small task to complete research work. But what about the authors whose primary research is copied by school and college students to complete their last minute assignments? The same technology is ruining the life of many research scholars as they suffer from being victims of plagiarism. Many times the scholars actually may not even be aware that their research has been used, and due credit has not been given to them. Plagiarism is considered to be a sin for college students as it defeats the purpose of writing research ideas. The creativity expected from students will only be the outcome when are original ideas of the author are published. Here, there is only one victim who is the copyright holder.

Plagiarism refers to the act of using or taking someone else’s work and then passing the same as own without giving due credit and recognition to the author. Plagiarism is all around us, and even then we fail to notice it. In this era where every technology is of prime importance, primary research and creativity can easily be exploited. The work available on the internet is vulnerable to plagiarism. There are two victims of plagiarism who are the copyright holders and the public who believe that the secondary work is the original work of the author.

India is a part of various international treaties to prohibit plagiarism. The copyright act reflects the Berne convention. This convention aims to protect the rights of authors by establishing various protection standards for their work. Similarly, India is a part of many other treaties such as Universal Copyright Convention, Geneva Convention for the Protection of Rights of Producers of Phonograms and is an active member of the World Intellectual Property Organization (WIPO) and United Nations Educational, Scientific, and Cultural Organization (“UNESCO”).

The Indian government has also taken a various step to protect plagiarism in the software industry, the music industry, and motion pictures though associations such as  National Association of Software and Service Companies (NASSCOM), National Initiative Against Piracy and Counterfeiting (NIAPC).

There can be very strong repercussions for plagiarized work that may not only harm the reputation of the plagiarist but also tangle him in a law suit. Plagiarism is an ethical sin.

Types of Plagiarism

1. Copy and Paste

This is the most common type of plagiarism where no or very less effort is required to copy a part of any text and use it as a part of one’s research work without giving reference to the original author of the text. It is also very easy to test for copy-paste plagiarism with the help of various plagiarism check tools available on the internet.

2. Idea plagiarism

If an author has written about something unique or on a creative idea on which nothing had been previously written, it must be clearly be credited to the author. Example – if someone has written about a very feasible way of rainwater harvesting, then before further using that technique in any other research work, the author of the primary research article should be credited.

3. Word Switch

Many times people prefer to take a few lines from some source and try to change a few words from the sentence. This is also a very common type as here it is difficult for the online check software to detect plagiarism. However, this is still plagiarism. It is not essential to directly quote the sentence from a primary source. If by reading those sentences a layman can figure out about the original research article, then it shall refer to plagiarism.

Difference between Copyright Infringement and Plagiarism

Often plagiarism and copyright infringement are spoken interchangeably, but it is important to know that both are not the same thing.

Copyright infringement is illegal to use of work that is protected under the copyright law without due permission from the author. The author has exclusive rights to reproduction of the work. The duration of copyright varies depending on the work that is being protected. For original literature, musical drama artworks, the duration is a lifetime of the author and sixty years after the death of the author. For movies, photograph or government work the protection is for sixty years counted from the date of publication.  Any infringement of copyright does not only lead to civil remedies like an injunction, damages or a share of profit to the author and cost of legal proceeding but it is also a cognizable offense. The punishment can range from six months to three years with a fine ranging from Rs. 50,000 to Rs. 2, 00,000.If there are multiple complaints about subsequent offenses of plagiarism, there are provisions to increase the fine, and give harsh punishment. There are also provisions to file a complaint which is first information report (FIR) with the police and seize the infringed material without court intervention.Foreign national who want to copyright their work in India will be protected under the copyright act if their country is a signatory to the conventions that have been signed by India. They shall be protected through International Copyright order, 1999. Indian court pays special attention to protection of work of foreign authors such as software, motion pictures, etc[1].

A copyright owner has various rights such as

• To publish his work
• To produce or be able to reproduce the original work
• Make multiple copies of the work
• Prevent any unauthorized use of the copyrighted work

Plagiarism, however, is considered to be an ethical issue. Here, the work of the author is used without giving him due credit. Plagiarism does not only include exact works of the author, but it also incorporates the use of ideas of another person without giving credit to the original author. Section 57 of the copyright act give the author a special right to claim authorship of his work even without having copyright of the work.The punishment for plagiarism is that same as the punishment for copyright infringement. The punishments are mentioned under section 63 and 70 of the copyright act. These offenses are bailable offenses.

Further, Section 63 of the Copyright Act which deals with infringement as a criminal offense contemplates the same punishment for both the violation of Section 57 and copyright infringement. Considering this parity in the statute itself, the confusion between infringement and plagiarism is understandable.[2]

Plagiarism may not always be committed intentionally, but there can be no excuse for stealing another person’s ideas or research without acknowledging the author. With the increasing use of internet, it becomes essential to be cautious before using ideas from the internet. It is not just students who are misusing research work; there have been some instances were research scholars were found misusing research of other scholars. Those who write to earn a living should be extra vigilant not to make any such mistake. The record of Bharat Ratna C.N.R. Rao, scientific adviser to India’s prime minister and one of the nation’s most celebrated scientists, is marred by a cavalier approach to plagiarism and more than one instance of serious breach of academic ethics.[3] Another instance where seven Stanford University physicists, three of them Nobel laureates, wrote a complaint against various instances of plagiarism by BS Rajput, a physicist and then vice-chancellor of a University in Uttarakhand.  Such news gets widely reported in the academic world. For academic scholars, publishing is an integral part of their career. Plagiarism will result in loss of reputation and may ruin the academic career of the research scholar.

Footnotes:

[1]. http://www.mondaq.com/india/x/406982/Licensing+Syndication/Copyright+Law+In+India

[2]http://copyright.lawmatters.in/2011/09/101-copyright-infringement-and.htm

[3]http://thewire.in/3307/in-india-you-can-plagiarize-and-flourish/

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