Madras High Court

Case BriefsHigh Courts

Madras High Court: G. Jayachandran, J., decided a matter with regard to infringing the registered trademark BHARATMATRIMONY.

Present suit was filed for injunction restraining the defendant, men and agent from infringing the plaintiff’s registered trademark BHARATMATRIMONY and its variant.

Plaintiff’s company was registered in using the internet as a platform for matrimonial alliance and have been in business since 2001.

Plaintiff enjoys tremendous goodwill throughout India and abroad. The internet business of the plaintiff started in the year 1997, having its domain name as www.bharatmatrimony.com. Plaintiff registered several other domain names based on language and religion to cater for the needs of the regional customer.

In order to protect the mark and exclusively enjoy the plaintiff registered the domain name www.bharatmatrimony.com

Further, it was stated that, in order to take advantage of the reputation and wide acceptance by the public, the defendant herein had adopted the identical mark of the plaintiff for its online business. The said adoption www.bharatmatrimony.org was with intention to ride its goodwill and reputation and was not honest, but with malafide intention to cause deception and confusion to the users in order to gain illicit benefit.

Adding to the above it was stated that when the plaintiff came to know this unauthorized use and wrongful exploitation the name used for the plaintiff’s trademark by the defendant, notice was served on the defendant to cease and deceit from adopting the mark which was identical that of the plaintiff’s trademark BHARATMATRIMONY.

Cause of filing the suit

Since the defendant failed to restrain itself from deceptively, illegally adopting the plaintiff’s trademark, the present suit was filed.

This Court had granted interim injunction being prima facie satisfied about the alleged copyright infringement by respondent/defendant.

High Court was satisfied that the user name BHARATMATRIMONY was being used by the plaintiff since 1997 and the domain name www.bharatmatrimony.com since 1999 had been dishonestly adopted by the defendant for its domain name, while its trade name is www.siliconinfo.com. On serving cease and deceit notice, the defendant did not respond to justify the adoption of the domain name.

Court expressed that defendant adopted the domain name www.bharatmatrimony.org which was squarely prohibited under Section 29 of the Trademark Act as infringement. Under Section 29(3), if the identical mark used for identical service, the Court shall presume the infringement.

Present matter is a case where the identical mark for identical service is adopted by the defendant and no justification came forward from the defendant, despite affording opportunity.

Therefore, the present suit was allowed in respect of the injunction relief against infringement.

Therefore the plaintiff was entitled to the following reliefs:

(a). A permanent injunction restraining the defendant, by themselves, their directors, partners, men, servants, agents, broadcasters, representatives, advertisers, franchisees, licensees and/or all other persons acting on their behalf from in any manner infringing and/or enabling others to infringe plaintiff’s registered trademarks BHARATMATRIMONY and/or its variants by using the identical trademark BHARATMATRIMONY as part of the Domain name or in any other manner whatsoever;

(b). A permanent injunction restraining the defendant, by themselves, their directors, partners, men, servants, agents, broadcasters, representatives, advertisers, franchisees, licensees and/or all other persons acting on their behalf from in any manner diverting the plaintiff’s business to themselves by using Google’s search engine in which the plaintiff’s trademark BHARATMATRIONY and domain name BHARATMATRIONY. ORG and/or its variants, by using as domain name and/or as meta tags and thereby passing off the business and services of the defendant as that of the plaintiff or in any other manner whatsoever;

(c). A permanent injunction restraining the defendant, themselves, their partners, successors-in-business, servants, agents, representatives, assigns and all other persons claiming under them and through them from using or redirecting to the domain name www.bharatmatrimony.org or any other domain name that is identical and/or deceptively similar to that of the plaintiff’s domain name www.bharatmatrimony.com in any manner whatsoever;

(d). The defendant be directed to surrender to the plaintiff for destruction all compact discs, master copy, advertising materials, pamphlets, brochures, etc. which bears the plaintiff’s registered trademarks and/or any other variants which is phonetically and/or deceptively identical and/or similar to the plaintiff’s registered trademarks or in any other form whatsoever.

[Matrimony.com Ltd. v. Silicon Valley Infomedia (P) Ltd., 2021 SCC OnLine Mad 5463, decided on 6-10-2021]

Advocates who appeared in this case:

For Plaintiff: Mr Arun C. Mohan

For Defendant: No appearance

Appointments & TransfersNews

President appoints the following as Additional Judges of the Madras High Court:

  • Sundaram Srimathy
  • D. Bharatha Chakravarthy
  • R. Vijayakumar
  • Mohammed Shaffiq

Above to be the Additional Judges of the Madras High Court, for a period of 2 years from the date they assume charge of their offices.

Ministry of Law and Justice

[Notification dt. 12-10-2021]

Case BriefsHigh Courts

Madras High Court: G. Jayachandran, J., with the lens of this decision addressed the Power under Order XXXVIII, Rule 5 of the Civil Procedure Code.

In the present matter, the plaintiff a Non-banking Finance Company (NBFC) and the First defendant a Micro Level Finance Company were the parties, and the first defendant borrowed a loan from the plaintiff. Other defendants i.e. 2 and 3 were the Director/Chief Executive Officer and Director-cum-Chairman of the first defendant’s company.

It was stated that the defendants failed to repay the loan and it was alleged that the second defendant fraudulently diverted the funds of the first defendant and had misappropriated the first defendant’s fund which led to the default in repayment after September 2020.

Further, it was alleged that the second defendant committed gross fraud by inflating the assets under management by showing fictitious disbursement, withdrawal and deposits as collections.

Liability of Defendants

Due to complete and abject failure of the corporate governance and financial collapse, the corporate veil is to be lifted and defendants 2 and 3 are to be held personally liable for the default of the first defendant.

Defendants had admitted the liability on several occasions and admitted the findings of fraud by the Forensic Auditors. The chance of the defendants fleeing away from the country was imminent.

In view of the above background, present application was filed to furnish security or bank guarantee equal to the suit claim.

It was noted that the 3rd defendant father of second defendant died, and the defendant company was under liquidation. The administrator was appointed to take over the assets and liabilities.

Analysis, Law and Decision

High Court expressed that,

“Power under Order XXXVIII, Rule 5 of the Civil Procedure Code has to be sparingly used and only when, there is sufficient reason to believe that the defendant is about to dispose his property, Attachment or Order to furnish security shall be ordered.”

Madras High Court’s decision in W. Pappammal v. I Chidambaram, 1984 Mad 70, was referred, wherein the Court held that,

“6. The essential requirements for invoking the power of court to effect an attachment under 0. 38, R. 5 (1), C.P.C., are that the Court must be satisfied that the defendant is about to dispose of the whole or any part of his or her property, or the defendant is about to remove the whole or any part of his or her property from the local limits of the jurisdiction of the court and the defendant is intending so to do with a view to cause obstruction or delay the execution of any decree that may be pawed against him or her. it is incumbent that the plaintiff should state precisely the grounds on which the belief or apprehension is entertained that the defendant is likely to dispose of or remove the property. It may even be necessary in some cases to give the source of information and belief. A mere mechanical repetition of the provisions in the Code or the language therein without any basic strata of truth underlying the allegation or vague and general allegations that the defendant is about to dispose of the property or remove it beyond the jurisdiction of the court totally unsupported by particulars would not be sufficient compliance with the first part of 0. 38, R. 5 (1), C.P.C.”

In view of the above, High Court held that the second defendant, who stood as guarantor for the term loan availed in the name of the first defendant, cannot be segregated or delinked from the defendant company, which is now under restructuring.

As far as the question of whether the second defendant mismanaged the company and appropriated the funds, the same would be proved through the investigation which was under progress and through trial.

Coming to the issue regarding Order Attachment before Judgment or to furnish security equal to the suit claim, the second defendant though found in a bad light and unacceptable antecedents were all not reasons to allow application under Order XXXVIII, Rule 5 of the Civil Procedure Code.

Lastly, the bench concluded by expressing that,

“…affidavit filed along with the application does not disclose adequate reasons for ordering furnish security that the property available now with the defendant will be disposed or removed from the local limits to cause obstruction or delay the execution of the decree.”

In view of the above application was dismissed. [Northern ARC Capital Ltd. v. Sambandh Finserve Pvt. Ltd., A. No. 2730 of 2020, decided on 6-10-2021]

Advocates before the Court:

For Applicant: Mr Anirudh Krishnan

For Respondents :Mr Supriyo Ranjan Mahaptra for R1

Mr Prashant Rajagopal for R2

Case BriefsHigh Courts

Madras High Court: Opining that “Cinema Hall, which seeks to prohibit carrying of drinking water inside the Cinema Hall for security reasons, must necessarily provide free potable and pure drinking water” S.M. Subramaniam, J., held that, in case the owner of Cinema Hall does not provide the same, owner will be liable to pay compensation.

Crux

Present petition was to seek direction to stop Hindustan Coca Cola Company along with Cinema Theatre Corporate Company from fixing high prices to their products than actual fixed market price and selling the same in Cinema Theaters in Chennai and Tamil Nadu at an excessive additional price by swindling people’s money and the same to be forfeited by Government and to be sent to Treasury and registering cases against respondents.

Background

Petitioner went to see a film along with his family in S2 Cinema Theatre, wherein the audience was not allowed to bring snacks, potable drinks and even drinking water inside the premises. They were forced to buy snacks, beverages and drinking water from the Food Stalls located inside the premises of Theatres in Chennai and Tamil Nadu.

During intermission, when the petitioner went to purchase water and mazaa mango, he felt that the prices were much higher than the open market. Therefore, he asked about the price of the Cinema Theatre Management, and they refused to reply to the petitioner.

On enquiring with various Online Companies and calling the Hindustan Coca Cola Company Customer Care to ascertain the price of the above-stated products, petitioner realized that the S2 Cinema Theatre and Hindustan Coca Cola Company were jointly swindling huge sums of money from the general public by charging exorbitant money over actual price fixed by government while selling the products.

Petitioner contended that the act of selling the same product at two different prices at two different places that too by printing prices over the bottle made it clear that the said Hindustan Coca Cola Company along with S2 Cinema Theatre Corporate Company had swindled huge sums of money from the general public by marketing and selling the consumer products. The petitioner stated that the Company was also involved in huge sums of fraud and therefore, actions are to be initiated.

Analysis, Law and Decision

Security Reasons

High Court opined that security consideration may prevail upon the Cinema owners to prohibit carrying of drinking water from the market inside the Cinema Hall. Sometimes undesirable elements may carry alcoholic drinks or even water mixed with acid inside the Cinema Halls.

A Cinema Hall, which seeks to prohibit carrying of drinking water inside the Cinema Hall for security reasons, must necessarily provide free potable and pure drinking water through water coolers installed inside the Cinema Halls, before such a prohibition can be enforced.

 Court’s Suggestions:

 Disposable glasses in sufficient quantity need to be kept available near the water coolers. It has also to be ensured that the water supply is actually available through the water coolers before the movie starts as well as throughout the screening of the movie including intervals. If for any reason, water supply is not available on a particular day, alternative arrangements for supply of free pure and potable drinking water for the cinema-goers needs to be made available by the owners of the Cinema Hall. The Cinema Hall is also required to ensure that the water coolers as well as water purifiers remain fully functional and are regularly serviced from time to time so that only purified water is dispensed through the water coolers. If this is not done, the owner of the Cinema Hall would be liable to pay appropriate compensation for the deficiency in rendering services to the cinema-goers.

Mere availability of the drinking water would not be sufficient to enforce prohibition of carrying drinking water inside the Cinema Halls. Purified drinking water with prescribed standards must be provided, to satisfy the requirements.

Bench further while expressing that mere efflux of time cannot be a ground to deny justice on the parties, stated that for purchase of drinking water bottles, snacks, etc., at higher price, illegalities, if any, committed cannot be condoned merely on the ground of delay.

Citizen’s Right

Since the petitioner is still interested in proving his case before the Authorities, Court naturally has to give an opportunity to the petitioner to establish his case.

“Right of the Citizen” to establish his case is a constitutional right, which cannot be denied by the Court.”

Bench while proceeding to analyze the matter further stated that the department officials were duty-bound to conduct periodical and surprise inspections in all the Cinema theatres across the State of Tamil Nadu.

On receiving several complaints in the public domain and certain nature of illegalities and irregularities in Cinema Theaters, the authorities must conduct inspections to find out the truth.

Court’s Order:

  • Petitioner to submit the complaints before the 5th respondent / Joint Commissioner, Department of Legal Metrology. In the event of receiving the copy of the complaints/representations, the 5th respondent is directed to conduct an appropriate enquiry by affording an opportunity to all the parties concerned.
  • Respondents 1 to 5 are directed to conduct inspection through the jurisdictional Subordinate officials across the State of Tamil Nadu.
  • The 5th respondent is directed to ensure that the complaints submitted by the public is enquired into immediately and appropriate actions are taken.

In view of the above, petition was allowed. [G. Devarajan v. Chief Secy., 2021 SCC OnLine Mad 5412, decided on 1-10-2021]

Advocates before the Court:

For Petitioner: Mr G. Devarajan (Party-in-Person)

For Respondents 1 to 5: Mr C. Kathiravan, Government Advocate.

For Respondents 7 and 8: Mr Satish Parasaran, Senior Counsel assisted by Mr Cyril Amarchand Mangaldas.

For Respondent 6: No Appearance

Case BriefsHigh Courts

Madras High Court: Asserting that “Deity” in the temple is a “minor” and the Court should be astute to protect the interests of an idol in any litigation, S.M. Subramaniam, J., held that,

When the trustee or the Executive Officer or the custodian of the idol, temple and its properties, leave the same in lurch, any person interested in respect of such temple or worshipping deity can certainly be clothed with an adhoc power of representation to the protect its interest.

Background

Petitioner submitted that land to an extent of 3227 sq. feet belonged to the 4th respondent temple and the superstructure originally belonged to the father of the petitioner.

Further, it was stated that by a registered sale deed, petitioner’s father had sold the superstructure along with the Lease Hold Rights to his brother. After the death of the father of the petitioner, his brother Mr D. Kumarasamy executed the settlement deed in favour of the petitioner.

Pursuant to the said settlement deed, the petitioner was a permissible tenant and was in continuous possession and enjoyment of the property till date by letting out to tenants. Further, the petitioner claimed that he paid the admitted rent regularly. He requested the 4th respondent for name transfer as he had done some minor repairs to the property.

Adding to the above, it stated that the 4th respondent had been increasing the rent and the same was being paid by the petitioner.

Petitioner submitted that the 4th respondent had terminated the lease deed and thereafter, the suit was filed for injunction not to put up any illegal construction in the temple properties.

In view of the above circumstances, the competent authorities initiated action under Section 78 of the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 and passed the eviction order. An eviction order had been communicated to the petitioner and thereafter an appeal was filed.

In an earlier order, this Court had directed the petitioner to deposit a sum of Rs 10,00,000 before the third respondent temple and the petitioner paid the said amount and thereafter, Court directed respondent 1 to dispose of the appeal.

What is the Grievance of the petitioner?

Petitioner stated that during the pendency of the appeal, respondent was initiating the steps to evict the petitioner as respondent 1 had not granted any interim stay of the eviction order.

Due to the above-stated facts, instant petitioner was moved.

Analysis, Law and Decision

Petitioner claimed to be the authorized leaseholder of the subject temple, though he could not produce any lease deed or documents to establish that his father was a leaseholder recognized by the Temple Authorities.

Bench noted that no one was holding a valid lease document properly executed by the Temple Authorities.

Court opined that the manner in which the temple properties were dealt with by the petitioner, sixth respondent and father of the petitioner were absolutely in violation of the provisions of the Act, and they were not only encroachers and illegal occupants, but utilized the property of the temple in an unlawful manner for their personal and unjust gains.

Bench was shocked to note the above and stated that though the Authorities initiated action, this Court had to record that such actions initiated were not only insufficient but raised a doubt about the active or passive collusion on the part of Competent Authorities of the temple.

Section 34 of the Act enumerates ‘alienation of immovable Trust property’. Sub section (1) of Section 34 stipulates that “Any exchange, sale or mortgage and any lease for a term exceeding five years of any immovable property, belonging to, or given or endowed for the purpose of, any religious institution shall be null and void unless it is sanctioned by the Commissioner as being necessary or beneficial to the institution”.

Court observed that, the temple property, which is meant for the benefit of the temple, can never be allowed to be encumbered in a different manner and in such circumstances, the Courts are bound to step in and deal with the issues properly

Significant, the Bench observed that where the persons in management of a temple failed to protect the interest of the temple diligently, the Court is empowered to take notice of such facts and deal with the issues in an appropriate manner.

If there are lapses, slackness or negligence on the part of the Executive Officer and the trustees of the temple, “it is the duty of the Court to ensure that the ‘Deity’ does not suffer thereby. The Courts should be astute to protect the interests of an idol in any litigation.”

Continuing to make some very interesting observations, Court added that the temple properties are allowed to be looted by few greedy men and by few professional criminals and land grabbers.

Lapses, negligence, dereliction of duty on the part of public officials are also to be viewed seriously and all appropriate actions in this regard are highly warranted.

High Court also noted that there are many instances where persons entrusted with the duty of managing and safeguarding the properties of temples deities and Devaswom Boards have usurped and misappropriated such properties by setting up false claims ownership or tenancy, or adverse possession.

The above is only possible with the passive or active collusion of the authorities concerned.

Such acts of ‘fences eating the crops’ should be dealt with sternly.

In the present matter, Court stated that the petitioner was not only an encroacher but abused the property of the temple for his personal gains. He has been enjoying the temple properties in an illegal manner, but derived profit from the temple properties and the profit gained was running to several lakhs.

In view of the above said, Bench expressed that,

High Court has its constitutional obligation in such circumstances to step-in and protect the interest of the minor idol and issue appropriate orders.

Directions of the Court:

  • Respondents 1 to 5 are directed to complete the eviction in all aspects and take over possession of the temple properties and deal with the same in accordance with the provisions of the Act and more specifically for the benefit of the temple administration;
  • Respondents 1 to 5 are directed to conduct an enquiry and assess the financial loss occurred to the subject temple and initiate all appropriate actions against all the persons concerned for the recovery of the financial loss caused to the temple;
  • Respondents 1 to 5 are directed to look into the active or passive collusion on the part of the Authorities in dealing with the temple properties in such a manner and initiate appropriate action against all those Authorities, who have contributed for the maladministration of the temple properties

[K. Senthilkumar v. Government of Tamil Nadu, WP No. 18190 of 2021, decided on 15-09-2021]

Advocates before the Court:

For Petitioner:G. Devi, For Mr V. Raghupathi

For Respondents: Mr N.R.R. Arun Natarajan, Government Advocate,  [For R1 to R4]

Mr Willson Topaz, For M/s A.S. Kailasam and Associates

Government Advocate [For R5]

Case BriefsHigh Courts

Madras High Court: The Division Bench of Sanjib Banerjee, CJ and P.D. Audikesavalu, J., prima facie observed that an oversight mechanism to control the media by the government may rob the media of its independence and fourth pillar, so to say, of democracy may not at all be there. The High Court was hearing a challenge to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

The Rules have been challenged on the ground that they are ultra vires, inter alia, Articles 14 and 19 of the Constitution of India. Primarily the petitioners referred to Rule 9 which pertained to observance and adherence to the Code. Rule 9(3) provided for ensuring observance and adherence to the Code of Ethics by publishers operating in the territory of India. Under the Code, the grievance made in relation to publishers would be governed by three tier structure: (i) Self regulation by publishers; (ii) Self regulating bodies of publishers; (iii) Oversight mechanism by the Central Government. The petitioners were wary of the oversight mechanism of the Centre indicated as the final tier of the process of regulation.

The High Court observed that:

“Prima facie, there is substance in the petitioner’s grievance that an oversight mechanism to control the media by the government may rob the media of its independence and fourth pillar, so to say, of democracy may not at all be there.”

The Court added that nothing more need be said on the above aspect as the Bombay High Court had already stayed the operation of sub-rules (1) and (3) of Rule 9 of the said Rules of 2021. However, the petitioners informed the Court that notwithstanding the Bombay High Court order, notices have been issued to them requiring adherence to Rule 9. On this, the Court recorded that:

“It must be recorded in all fairness that the Additional Solicitor-General, representing the Union, accepts that the order passed by the High Court of Judicature at Bombay would have pan-India effect.”

Another ground for challenge which was not covered by the Bombay High Court pertained to Rules 3 and 7 of the impugned rules. Petitioners were aggrieved with the incorporation of sub-clause (x) of Rule 3(1)(b), which is as follows: “(x) is patently false and untrue, and is written or published in any form, with the intent to mislead or harass a person, entity or agency for financial gain or to cause any injury to any person;”

Petitioners pointed that along with the obligation imposed on the intermediary under Rule 3(1)(c) to terminate the access or usage rights of users for non-compliance with the provisions of Rule 3(1)(b), the provisions for grievance redressal have been made stringent and, finally, Rule 7 has been incorporated making an intermediary liable for punishment upon the intermediary failing to observe the said Rules.

The Court noted that that the present Rule 3 is different from Rule 3 of the earlier rules. There appear to be key changes, particularly the introduction of sub-clause (x) in clause (b) of sub-rule (1) thereof and the additional obligation on the intermediary in, inter alia, clause (c). It was noted:

“Any host of a website or platform would be an intermediary and an ordinary person may be denied access to the platform on the ipse dixit of the intermediary or on the intermediary’s apprehension that such intermediary may be proceeded against.”

Section 79 of the Information Technology Act, 2000 grants exemption from liability to intermediaries in certain cases. However, by virtue of Section 79(2)(c), the exemption would not apply if the intermediary is found not to have observed “guidelines as the Central Government may prescribe in this behalf.”

In Shreya Singhal v. Union of India, (2015) 5 SCC 1, it was observed:

“it would be very difficult for intermediaries like Google, Facebook, etc. to act when millions of requests are made and the intermediary is then to judge as to which of such requests are legitimate and which are not.”

Significantly, the High Court siad that though the petitions were not brought by hosts of website platforms, but social media platforms on the website are used by one and sundry and there is a genuine apprehension that a wink or a nod from appropriate quarters may result in the platform being inaccessible to a citizen.

The Court directed that if there is any action taken in terms of Rule 3 of the said Rules read with Rule 7 thereof during the interregnum, it will abide by the result of the petitions and further orders herein. Since main matter is likely be taken up by the Supreme Court in early October, 2021, the matters of the present petition shall be taken up in the last week of October, 2021. [Digital News Publishers Assn. v. Union of India, WP No. 13055 of 2021, dated 16-9-2021]

Also Read:

‘People would be starved of liberty of thought if…’: Know why Bom HC partly stayed IT Rules, 2021

Case BriefsHigh Courts

Madras High Court: S. Vaidyanathan, J., cancelled the bumper-to-bumper policy which was made mandatory by this Court’s order for new vehicles for a period of 5 years.

Upon hearing the submissions made on behalf of Insurance Regulatory and Development Authority (IRDAI), General Insurance Council (GIC) representing the licensed General Insurance Companies and SIAM, as a non-profit entity that has been espousing the cause of the Automobile Industry for several years, it appeared that the order dated 04-08-2021, mandating the coverage of bumper to bumper policy may not be logistically and economically feasible for effective implementation in the present legal dispensation.

Further, it was submitted that the directions issued by the Court have an unintended impact causing severe repercussions on the society and therefore the said directions may be withdrawn.

It was also brought to the notice of this Court that the issue of long-term third-party insurance coverage had been mandated by the Supreme Court and the Regulating Body, viz., Insurance Regulatory and Development Authority (IRDAI) had been periodically monitoring over the changing scenario and hence, there was no need for issuance of such compulsory directions.

Analysis, Law and Decision

Considering the submissions of the parties, High Court stated that directions issued by this Court in its 4-8-2021 order may not be conducive and suitable for implementation in the current situation, hence the said direction is withdrawn.

Lastly, the Bench concluded saying that, it hopes and trusts that law makers will look into this aspect and examine the need for a suitable amendment in the Act, relating to the wide coverage of vehicles so as to protect the innocent victims.

Further, in view of the withdrawal of the direction regarding bumper-to-bumper policy, the Circular dated 31-08-2021 issued by the Joint Transport Commissioner, Chennai also stands cancelled.

High Court directed Registry to remove Paragraph No.13 from the earlier order of this Court dated 04-08-2021 and issue a fresh copy of the order to the parties. [New India Assurance Co. Ltd. v. K. Parvathi, CMA No. 1565 of 2020, decided on 13-09-2021]

Case BriefsHigh Courts

Madras High Court: Observing that, Litigants are compelled to accept the wrong orders in view of inaccessibility to New Delhi and the exorbitant expenses towards engaging a counsel, the Division Bench of N. Kirubakaran and R. Pongiappan, JJ., emphasized that,

When approaching the Supreme Court by a common man remains in dreams only, it would amount to denying justice.

Court’s opinion

While trying to support its opinion, the High Court considered whether Members of Parliament will travel to Delhi to attend Parliament by spending their own money without sponsorship by the Government? Answering that no Member of Parliament would spend his own money to attend Parliament, the Court said that when such is the position regarding the elected members of Parliament, no one could expect an ordinary litigant to travel to New Delhi spending huge amount to file Appeals against the orders of the High Courts or Tribunals.

Elaborating the above, Bench stated that the location of Courts and Tribunals in New Delhi alone, without having Regional Benches, causes injustice to the people living in far-flung places away from New Delhi.

It is very unfortunate that majority of the litigants are compelled to accept unfavorable orders, for lack of resources and access to Appellate Courts.

 Background

Present matter revolved around a complaint wherein it was stated that the petitioner was unable to travel to New Delhi, as the appeal against order passed by the Bar Council of Tamil Nadu and Puducherry had to be filed before the Bar Council of India, which was located 2186 kilometres from Chennai and he would submit that keeping the Courts and Tribunals only in New Delhi would amount to denial of justice to majority of people living far away from New Delhi.

Petitioner challenged the dismissal of his complaint by the Disciplinary Committee of the Bar Council of Tamil Nadu filed by him against the second respondent, who was engaged by the petitioner to act as his Advocate, for professional misconduct.

Second respondent was engaged in conducting the Rent Control Proceedings by the Petitioner’s brother. During the course of the Trial only, it came to the notice of the petitioner that second respondent collected the rents and issued receipts based on the alleged oral instructions of the petitioner’s brother. Therefore, the petition was dismissed.

The findings given by the First Respondent was that the Petitioner’s brother, was not examined and it was fatal to the case of the petitioner. Moreover, the complainant alone had to prove and establish through evidence, the professional misconduct committed by the Second Respondent.

By giving such a finding, the Complaint was dismissed. If the Petitioner intends to prove that there was professional misconduct on the part of the Second Respondent, as rightly pointed out by the Disciplinary Committee, the Petitioner’s brother should have been examined who alone competent to speak about the transactions. Merely because the Petitioner’s brother adduced evidence before the Rent Control proceedings are not enough especially when serious allegations of misconduct are alleged against the Second Respondent.

Analysis, Law and Decision

In High Court’s opinion, the first respondent rightly dismissed the petition.

With regard to petitioner’s submission that alternate remedy of filing an appeal under Section 37 of the Advocate Act before the Bar Council of India is not efficacious as the Bar Council of India was located more than 2000 kilometres away, and if one intends to challenge the first respondent’s order, he will have to travel to New Delhi and engage a counsel by spending lakhs of rupees.

Bench stated that Advocates in Delhi are charging very heavily than the State Counsel. Moreover, the petitioner will have to travel and for that also he will have to spend money.

Because of the above reasons, litigants though having a good case, are unable to challenge the same before the Supreme Court or before the Tribunals which are located in New Delhi.

“…many litigants accept the order passed by the Tribunals or the Bar Council or High Courts, in spite of the fact that they have a good case or an arguable case on merits.”

“Litigants are compelled to accept the wrong orders in view of inaccessibility to New Delhi and the exorbitant expenses towards engaging a counsel.”

The above would amount to infraction of Article 21 guaranteed to a citizen as the existence of remedy should be reasonably practicable and access being one of the essential requirements, ought to be provided, as otherwise, it would be a distant dream.

High Court held that the availability of alternate remedy under Section 37 of the Advocates Act is not efficacious, hence the writ petition was maintainable.

Bench noted that because of a decision on the administrative side of the Supreme Court, the efforts taken by the Centre to set up Benches in different parts of the country had been made futile.

No impression should be given that the Supreme Court is meant only for the people living in and around New Delhi or the States surrounding New Delhi.

Further, the Court stated that when the Supreme Court is inclined to grant permission to establish Benches of the High Courts, every citizen expects the same decision to establish Benches of the Supreme Courts in the South, North, East and West.

The Constitution framers thought of establishing Benches of the Supreme Court at various places, other the incorporation of below stated Article 130 would not have taken place.

Article 130 of the Constitution speaks about the seat of the Supreme Court, which is extracted as follows:-

“130. Seat of Supreme Court.- The Supreme Court shall sit in Delhi or in such other place or places, as the Chief Justice of India may, with the approval of the President, from time to time, appoint.”

Adding to the above, Bench observed that there was no constitutional bar for setting up or establishing Benches in various parts other than New Delhi.

Supreme Court is the custodian of rights of not only the litigants but also the entire population. Time has come to establish Benches of Supreme Court at other places apart from New Delhi.

When people are aware of their rights, they should have accessibility and affordability to reach every level of hierarchy of Courts.

High Court added that larger issue pertaining to access to Justice was discussed at length in the case of V. Vasanthakumar v. H.C. Bhatia, (2016) 7 SCC 686, wherein the Court referred the matter to a Constitution Bench on a range of issues, such as inter-alia whether to establish a National Court of Appeal or Regional Benches of the Supreme Court, etc.

The Court, which originally used to sit en banc, rendering seminal Constitutional bench Judgements, has now, owing to the prevalent system of admissions under Article 136 become a regular court of appeal, hearing all kinds of matters on a variety of Jurisdictions. 

For the above-stated matters, Bench expects the Central Government to take some action.

Adding to the observations, Court also stated that

India is having a population of 136 Crores, 34 Supreme Court Judges are not enough and more number of Judges are to be appointed. Hence, this Court hopes and expects that justice would be rendered by all the stake holders by taking a pragmatic, appropriate, justifiable and a fair decision in the interest of the people.

Lastly, disposing the petition, Court granted two week’s time to file an appeal if he wishes so, before the Bar Council of India.

Opinion of R. Pongiappan, J.

I have gone through the judgment and I am of the view that the views and observations given in paragraph Nos.3, 4 and 19 to 32 in the judgment are not related to the prayer sought for in the writ petition. Hence, with great respect, I am unable to persuade myself to subscribe views taken by my esteemed Brother. Accordingly, except approving the decision in negativing the writ petition, I am not agreeing with the views and observations made in the above referred paragraphs of this judgment.

[Karthik Ranganathan v. Disciplinary Committee-IV, WP No. 13796 of 2021, decided on 19-08-2021]

Advocates before the Court:

For Petitioner: Karthik Ranganathan (Petitioner-in-Person)

For Respondents: C.K. Chandrasekkar (For R1)

Rajesh Vivekanandan (For R3 & R4)

Appointments & TransfersNews

SC Collegium has approved elevation of 4 Advocates as Judges of Madras HC

Supreme Court Collegium has approved the proposal for elevation of the following Advocates as Judges in the Madras High Court:

1. Smt. Sundaram Srimathy,

2. Shri D. Bharatha Chakravarthy,

3. Shri R. Vijayakumar, and

4. Shri Mohammed Shaffiq.

Collegium Resolution

[Statement dt. 1-09-2021]

Case BriefsHigh Courts

Madras High Court: The Division Bench of N. Kirubakaran and M. Duraiswamy, JJ., while addressing the matter with the concern of printing images of Great leaders on currency notes, expressed that,

If every claim is started to be entertained, there will not be any end.

What is the use of printing images of Great Leaders, who fought for our Independence without following their principles, in currency notes?; merely because the portrait of Mahatma Gandhi is appearing in the currency, does it mean that the currency is used only for legal purposes. Whether the currency should have the portrait of a particular leader or otherwise is the policy of the Government.

 In the instant matter, petitioner appeared before the Court challenging the respondent’s order by which the petitioner’s claim for printing the image of Nethaji Subhash Chandra Bose in the currency notes was rejected.

Petitioner stated that if the image of Netaji Subash Chandra Bose will be printed in the currency note it will be a tribute paid to the great leader.

Analysis, Law and Decision

High Court stated that it was evident from the impugned order that, on the evidence of the Government of India, a Committee was constituted by the Reserve Bank of India in October, 2010 for designing the future currency notes and the Committee deliberated on the issue o changing the existing image of Mahatama Gandhi and inclusion of certain other personalities in the new design Bank notes. However, the Committee decided that no other personality could better represent the ethos of India than Mahatma Gandhi and therefore, no other personality image was decided to be included in the currency note.

The above decision of the Committee was accepted by the Ministry of Finance.

Bench added that it is not underestimating the fight and sacrifice made by Netaji Subash Chandra Bose and great leaders for freedom moment of this Country.

There are many known heroes and unsung heroes. If everybody starts making such a claim there will not be an end.

Court emphasized that, Central Government as well as Reserve Bank of India have already constituted a Committee and took a decision that it is only the father of the Nation Mahatma Gandhi could represent the ethos of India and therefore, it was decided to retain the Mahatma Gandhi’s image in the currency notes and no other personality image is decided to be included.

Hence, Bench lastly held that only the government can take a decision and this Court cannot substitute the views of the Committee report which had been accepted by the Government.

In view of the above, petition was dismissed. [K.K. Ramesh v. Union of India, 2021 SCC OnLine Mad 5022, decided on 10-08-2021]

Advocates before the Court:

For Petitioner: Mr K.K. Ramesh (Party-in-Person)

For Respondents: Mrs L. Victoriya Gowri, Assistant Solicitor General of India

Case BriefsHigh Courts

Madras High Court: The Division Bench of Sanjib Banerjee, CJ and P.D. Audikesavalu addressed a matter wherein direction was sought to widely spread public awareness about the scientifically proved truth on the subject of astrology and its serious impacts, in all Social media, TV, newspapers and in all other available means likely in manner of reaching and educating the poor and innocent parents present in every nook and corner of this state as not to spoil the career and lives of their innocent children merely on astrological superstition and to educate the innocent child and young couples in their right age in right manner.

Petitioner sought a writ of mandamus on respondent authorities to spread awareness that astrology may not be based on any science at all.

Bench stated that the matters of the present kind cannot be appropriately dealt with in Court. Even science in such regard is not complete or absolute.

No sooner was Pluto relegated from the status of a planet, than a distant planet appears to have been discovered that may not have encircled the Sun in course of the entire duration men have been gazing at the sky.

Court expressed that, there are some matters in which exact answers may not be available as the only known intelligent life form in the universe endeavours to grapple with the unknown.

 Lastly, the Bench held that the petitioner should be lauded for trying to orient citizens to a more scientific regime and shed superstitious beliefs, the Court cannot issue any direction of the kind sought and some amount of independence has to be given to the individual to believe, imagine and ponder over the same.

Adding to the above, High Court stated that the State in its parens patriae role may evolve a mechanism where citizens may be better informed and evil practices are given up. [A.K. Hemaraj v. Government of Tamil Nadu, 2021 SCC OnLine Mad 4920, decided on 27-08-2021]

Advocates before the Court:

For the Petitioner:  Mr A.K. Hemaraj Party-in-person

For the Respondents: Mr P. Muthukumar Counsel for State for R-1

Case BriefsHigh Courts

Madras High Court: The Division Bench of Sanjib Banerjee, CJ and P.D. Audikesavalu, J. while addressing the contempt petition, expressed that,

Merely because the immediate lis pertains to the contempt jurisdiction would not imply that this court sheds its plenary authority under Article 226 of the Constitution while considering the manner of implementation of the said order. 

Rather than the caste system being wiped away, the present trend seems to perpetuate it by endlessly extending a measure that was to remain only for a short duration to cover the infancy and, possibly, the adolescence of Republic. Though the life of a nation state may not be relatable to the human process of aging, but at over-70, it ought, probably, to be more mature.

Factual Background

Petitioner is stated to be a political party, one which has returned to power in this State following the Assembly elections conducted a few months back. Most major political parties in the State had filed the other petition that came to be decided the Order dated 27-07-2020 (“the said order”).

Petitions that were decided by the said order sought implementation of reservation for Other Backward Classes (OBC) in the All India Quota (AIQ) of the seats surrendered by the State for admission to the under-graduate, post-graduate and diploma medical and dental courses in the State. Reservation implementation was sought from 2020-21.

Request for interim relief, was rejected with the observation that this court was justified in holding that since the selection process for the relevant academic year had commenced, the same could not be disturbed. However, the appeals remain pending and, in such sense, the order of this Court of July 27, 2020, has not attained finality, though there is no impediment to it being implemented in academic year 2021-22.

Analysis, Law and Decision

While addressing the matter, Court observed that,

If a pool of seats is available to candidates from all over the country, irrespective of an individual’s place of residence, the State-wise reservation, which is based on demography of the State, cannot hold good for the entire country as the mix of socially backward classes would differ from region to region even within a State.

Court added that, Ordinarily, reservations pertaining to admission to educational institutions and appointments to government service are provided by statutory enactments or rules under a particular statute.

Difficulty, in the present case, arises in the fact that the present contempt petition arises out of an order which has been carried to the Supreme Court by way of an appeal and an interim order in the appeal observed as to the import of the order dated July 27, 2020

To elaborate more, the Bench added that the matter is of some importance as the careers of not only the prospective all-India candidates in the medical entrance seats surrendered by the State in the AIQ would be affected by the present order, it may also have an all-India impact, subject to what may ultimately be decided by the Supreme Court.

Coming to the question, whether the said order of this Court has been complied with?

Bench noted that:

to the extent that a committee was constituted and the committee made its recommendations, the order has been complied with. However, the order may not have contemplated that neither recommendation of the committee would be accepted and a third alternative would be imposed by the Union, though the order required consultation between several stakeholders to arrive at an informed decision. Equally, the first option indicated by the committee was no option at all, as it was absurd to suggest that the State reservation rules would apply to AIQ seats for admission to the under-graduate, post- graduate and diploma medical and dental courses in the State since that would, ipso facto, take the seats away from the AIQ pool back to the State as only backward classes as notified by the State in its official gazette would be entitled to the reservation and not candidates not resident in the State.

Adding to the above, Court expressed that, it is true that the petition before this Court is one for the perceived breach of a previous order of this court, but if the present petition were to be ineffectively disposed of that would result in another petition, multiplicity of proceedings and the issue being left unresolved.

It may be in the public interest, at times, for courts to be decisive, without being rash, of course.

At least there is a safety net even if this court goes wrong for the matter to be decided at the highest stage; but a decision is called for in the matter in the larger public interest.

Analyzing further, the Bench stated that the AIQ scheme had been introduced for entrance to under-graduate and post-graduate degrees and diploma courses in government-run or aided medical and dental colleges across the country pursuant to orders of the Supreme Court.

To the extent that 27 per cent of the seats available for admission in Central educational institutions is reserved for OBC candidates, other than the creamy layer, and such figure having been arrived at upon empirical studies being conducted, the provision for 27 per cent reservation for OBC candidates, in addition to the approved reservation for scheduled caste and scheduled tribe candidates as indicated in the notification of July 29, 2021, may be permissible, subject to the formal approval of the Supreme Court being obtained in such regard.

Another significant point expressed by the Court was that, if the AIQ seats are thrown open to candidates across the country, there cannot be reservation to one extent in one State and reservation to another extent in another State.

Conclusion 

  1. Since the committee required to be constituted by the order dated July 27, 2020, was constituted and such committee gave its opinion and the Union, or its appropriate agencies, have acted on the basis thereof – albeit not exactly in terms of the recommendations – no case of wilful or deliberate violation of the said order can be said to have been made out.
  2. The notification of July 29, 2021, issued by the Union as a consequence of the order dated July 27, 2020, appears to be in order insofar as it provides for reservation for scheduled castes, scheduled tribes and OBC categories. The horizontal reservation provided in such notification for persons with disabilities also appears to be in accordance with law.
  3. The additional reservation provided for economically weaker sections in the notification of July 29, 2021, cannot be permitted, except with the approval of the Supreme Court in such regard.

In view of the above, contempt petition was dropped.

“…entire concept of reservation that appears to have been addressed by the Constituent Assembly while framing the Constitution may have been turned on its head by repeated amendments and the veritable reinvigoration of the caste system – and even extending it to denominations where it does not exist – instead of empowering citizens so that merit may ultimately decide matters as to admission, appointment and promotion.”

 [Dravida Munnetra Kazhagam v. Rajesh Bhushan, 2021 SCC OnLine Mad 4851, decided on 25-08-2021]

 Advocates before the Court:

For the Petitioner: Mr. P. Wilson, Senior Advocate for M/s. P. Wilson Associates

For the Respondents: Mr. K.M. Nataraj

Additional Solicitor-General of India assisted by Mr. V. Chandrasekaran

Senior Panel Counsel for respondents 1, 2, 4 and 8

: Mr. P. Muthukumar Counsel for the State for respondents 6 and 9

: Ms. Shubharanjini Ananth Standing Counsel  for 3rd respondent

: Service awaited for respondents 5 and 7

Case BriefsHigh Courts

Madras High Court: N. Anand Venkatesh, J., remarked that,

There is no doubt with regard to the fact that the moment Judge records an order of acquittal, the identity of a person as an accused is completely wiped out.

Right to be Forgotten?

 Whether an accused person who on being charged for committing an offence and having undergone trial and ultimately been acquitted of all charges by a Court of competent jurisdiction, has the right to seek for destruction or erasure or redaction of their personal information from the public domain?

Whether the above right is traceable to Article 21 of the Constitution of India as a right to privacy which is an intrinsic part of the right to life and personal liberty, hence an enforceable right as held by the Supreme Court decision in K.S. Puttaswamy (Privacy-9J.) v. Union of India, (2017) 10 SCC 1, whether in light of the same, this Court can set out guidelines in exercise of its jurisdiction?

Every counsel in the present matter in unison reverberated the undisputable position of law that the right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21and as a part of the freedoms guaranteed by Part III of the Constitution. 

Present matter involved a right to reputation which is inherent to the right to life protected under Article 21 of the Constitution.

It was further submitted that a judgment of acquittal gives the accused a right of getting an automatic expungement of his name from all records and particularly from those which are within public domain.

The peculiarity of seeking redaction of the name of accused persons who have been acquitted, has essentially gained significance due to the development of science and technology that has virtually brought everything under the sky to the fingertips of any person who may have access to the internet. The search engines provide information about any person and whatever information is available in the “Cloud” can be accessed by anyone.

 Further, it was stated that a person despite getting acquitted after facing criminal trial has their name reflected in the order or judgment as an accused which identity, they want this world to forget.

High Court came to a prima facie conclusion that an accused person is entitled to have their name redacted from the judgments or orders and more particularly the ones that are available in the public domain and accessible through search engines.

To the above, Court added that there may be ramifications if such a generalized order was passed, and directions were issued. Hence, the need for assistance from the Bar, therefore, seemed imperative.

Initially, this Court was inclined towards the right to privacy, right of reputation and right to live with dignity being read to have a wide scope. The Court felt that it had to come to the rescue until the legislature ultimately enacts the Data Protection Act. However, on a deeper review of the issue, this Court has taken cognisance of the fact that the same is not as simple and straight as it sounded.

Bench elaborating more on the above aspect, stated that Court is called upon to literally strike the name of the person from the order or judgment which recorded the acquittal of the person from the criminal proceedings.

An identity which has already been wiped out by operation of law is sought to be wiped out at a gross level wherever there is reference to the name in the order or judgment.

 Another question that solicited the attention of this Court was at which level of jurisdiction should the process of redaction be done?

High Court found force in the submission of Arun Anbumani, that this Court is only looking at the end product of criminal litigation, which is the final judgment or an order of acquittal which gets published. Counsel submitted that the damage to reputation or dignity starts right from the day a complaint is given, an FIR is registered, an accused gets remanded and when they face trial. At every stage, there is a publication and while seeking for redaction, none of the said publications will be touched.

Counsel further submitted that it is only an order or judgment of acquittal which actually saves the honour of a person whose name has already been tarnished due to various publications that take place and which are also readily available on the search engines.

Court expressed that, if the system is looking for identifying an effective right for a person acquitted in a criminal proceeding, it must be a consummate relief and there is no use in just erasing the name in a final judgment or order.

It was also added that, only Juvenile Justice [Care and Protection of Children] Act, 2015 provides for the complete destruction of the entire criminal record which ultimately removes the person from their identity as an accused person.

Principle of Open Justice

High Court while quoting Bentham and citing the decision of House of Lords in Scott v. Scott, [1913 A.C. 417], stated that in cases like minors and matrimonial disputes, where publicity may be harmful to the subject matter of the lis, the principle of open justice must yield to the still more paramount duty to do justice. After all, publicity is only a means to an end.

Further, the Court added that in India the principle of open justice has been identified as a central tenet of the rule of law. The principle, however, is not monolithic, and encompasses various precepts. In Swapnil Tripathi v. Supreme Court of India (2018) 10 SCC 639, wherein, D.Y Chandrachud, J., identified the following elements:

  1. The entitlement of an interested person to attend Court as a spectator;
  2. The promotion of full, fair and accurate reporting of court proceedings;
  3. The duty of Judges to give reasoned decisions; and
  4. Public access to judgments of Courts.

Therefore, it can be established from the above that public access to judgments of Courts is an integral percept of the concept of open justice, promoting the rule of law.

Whether right to privacy exists in the contexts of judgments and orders of a Court?

The principles laid down in the Supreme Court decision of R. Rajagopal v. State of Tamil Nadu, (1994) 6 SCC 632, were affirmed by the 9-Judge Bench in K.S. Puttaswamy’s case. It must, therefore follow that judgments of courts being public record, the right to privacy cannot subsist. The concurring judgment of S.K Kaul, J also recognizes this position. In paragraph 636, the learned judge took note of what has now come to be termed as “the right to be forgotten” and has opined thus:

“If we were to recognise a similar right, it would only mean that an individual who is no longer desirous of his personal data to be processed or stored, should be able to remove it from the system where the personal data/information is no longer necessary, relevant, or is incorrect and serves no legitimate interest. Such a right cannot be exercised where the information/data is necessary, for exercising the right of freedom of expression and information, for compliance with legal obligations, for the performance of a task carried out in public interest, on the grounds of public interest in the area of public health, for archiving purposes in the public interest, scientific or historical research purposes or statistical purposes, or for the establishment, exercise or defence of legal claims. Such justifications would be valid in all cases of breach of privacy, including breaches of data privacy.”

Court decided that the “right to be forgotten” cannot exist in the sphere of the administration of justice particularly in the context of judgments delivered by Court.

An exception to the aforesaid position could be seen in cases of victims of rape and other sexual offences where the Supreme Court directed that the identity of victims cannot be disclosed. [See Nipun Saxena v. Union of India, (2019) 2 SCC 703]

Petitioner’s grievance was that continued reflection of his name as an accused in the judgment of this Court is a violation of his right to privacy under Article 21 of the Constitution or more specifically, its subset, the right to be forgotten.

However, it is a settled position of law that a judicial order of a Court cannot violate fundamental rights under Part III of the Constitution.

The direction sought by the petitioner was to redact his name from an order passed by a co-ordinate bench of this Court in a regular criminal appeal.

In Naresh Sridhar Mirajkar v. State of Maharashtra, AIR 1967 SC 1, it was conclusively held that a writ does not lie to an order of a Court placed on an equal footing in the matter of jurisdiction.

“…any judicial order, irrespective of the nature of jurisdiction and the strength of the Bench, is, in effect, the order of the High Court as one institution.”

“…since the High Court is one indivisible institution, a writ cannot lie against a judgment or order passed by it for that would tantamount to the High Court issuing writs against itself.”

Sanctity of an Original Record

The High Court is a Court of Record under Article 215 of the Constitution. As a superior Court of Record, it is entitled to preserve the original record in perpetuity. Thus, the sanctity of an original record cannot be altered or otherwise dealt with except in a manner prescribed by law.

No judgment of any Court has been cited to show that the prerogative power of this Court under Article 226 extends to direct alteration of its own records.

This Court honestly feels that our criminal justice system is yet to reach such standards where courts can venture to pass orders for redaction of name of an accused person on certain objective criteria prescribed by rules or regulations. It will be more appropriate to await the enactment of the Data Protection Act and Rules thereunder, which may provide an objective criterion while dealing with the plea of redaction of names of accused persons who are acquitted from criminal proceedings.

Therefore, Court declined to grant the relief sought for in the writ petition and hence the same was dismissed. [Karthick Theodore v. Madras High Court, 2021 SCC OnLine Mad 2755, decided on 3-08-2021]

Advocates before the Court:

For Petitioner: Mr.S.Jayavel

For Respondents: Mr. K.Samidurai for R 1 to R 3

Case BriefsHigh Courts

Madras High Court: V. Bhavani Subbaroyan, J., while addressing the allegations of defamation, held that,

While printing and publishing matters with regard to the leaders of the Country or State, the petitioners (Newspaper) are supposed to give respect and address them accordingly.

Instant petition was filed to quash the proceedings initiated against the petitioners for an offence punishable under Sections 500, 501 of Penal Code, 1860.

Petitioner’s counsel submitted that even if the allegations made in the complaint were taken as it is, the same does not constitute defamatory allegations with respect to the act or conduct of the then Chief Minister in the discharge of her public functions and at the best, it can only be treated as personal defamation.

Hence the counsel submitted that such a complaint cannot be maintained through the City Public Prosecutor, and it does not satisfy the requirements under Section 199 (2) CrPC.

Further, the Counsel for the Government submitted that the petitioner indulged in making wild allegations against the then Chief Minister and thereby defamed her name in the eyes of the general public.

Adding to the above submission, it was stated that in the name of freedom of press, petitioners cannot make defamatory and derogatory allegations against the former Chief Minister.

Analysis, Law and Decision

Bench stated Section 199(2) of CrPC provides a special procedure with regard to the initiation of proceedings for prosecution for defamation of a public servant.

 If the defamatory statement is personal in nature, this special procedure will not apply, and it is only the concerned person who has to file the complaint in his or her individual capacity.

In Court’s opinion, the allegations based on which the criminal complaint was filed did not in any way touch upon the conduct of the aggrieved person in discharge of her public function. The said allegation can only be construed as personal defamation.

Hence the said complaint cannot be maintained since it did not satisfy the requirements of Section 199(2) of CrPC.

High Court quashed the proceedings in view of the above discussion.

While concluding the matter, the petitioner’s newspaper was directed to refrain from printing matters in a disrespectful manner.[Dr R. Krishnamurthy v. City Public Prosecutor,  2021 SCC OnLine Mad 2676, decided on 12-07-2021]

Advocates before the Court:

For Petitioners: Mr S.Elambharathi

For Respondent: Mr E.Raj Thilak, Counsel for Government (Crl Side)

Case BriefsHigh Courts

Madras High Court: Sanjib Banerjee, J., addressed whether this Court is the appropriate forum to decide the quantum that can be forfeited and elaborated more of right to forfeit.

Instant petition was filed for issuance of a Writ of Certiorarified Mandamus calling for the records of the impugned letter issued by the respondent under Rule 9 (5) of the Security Interest (Enforcement) Rules, 2002 and quash the same and reasonable time frame to be fixed by this Court for paying the balance amount towards 75% of the balance purchase price by the petitioner.

Petitioner’s grievance was that the respondent secured creditor did not inform the petitioner of certain encumbrance pertaining to the asset sold under the Securities and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

At the bid, the petitioner had deposited only 25% of the consideration and did not pay any further.

Further, the petitioner’s case was that she tried to obtain loans to finance the purchase but was impeded by the property standing encumbered in some third party’s favour.

Another grievance of the petitioner was that the bank had purported to forfeit the consideration tendered without affording the petitioner a chance to pay the balance amount, particularly since the second surge of the pandemic stood in the way of the petitioner arranging for money.

Secured Creditor submitted that, notices were issued to the petitioner, and they had no authority to extend the payment period beyond 90 days from the date of the auction.

Adding to the above, secured creditor submitted that it had duly forfeited the amount which has been tendered by the petitioner and no question arises of the sale going through or of the consideration being returned.

Bench stated that, writ court is not the appropriate forum to adjudicate as to whether the forfeiture or the quantum thereof is appropriate and as to whether the secured creditor in this case is obliged to extend the time for making the balance payment by the petitioning-auction purchaser.

Right to Forfeit

Right to Forfeit has to be balanced against the rule against unjust enrichment.

Merely because there is a forfeiture clause does not imply that the entire amount deposited has to be forfeited.

Further, the High Court elaborating more, added that,

Forfeiture clause, like an earnest money deposit clause or a liquidated damages clause, has to be regarded as a genuine pre-estimate of the loss that may have been incurred, but when a forfeiture clause does not indicate an amount but provides that the entire amount tendered would be forfeited, it may not be permissible to forfeit, say 99% of the payment made for the default in depositing the balance 1%.

Thus, the quantum that can be forfeited will depend on the extent of the loss or damage suffered by the party, not in breach and this is, essentially, a question of fact that has to be adjudicated by an appropriate forum. The High Court, in exercise of the jurisdiction under Article 226 of the Constitution, is not such forum.

In view of the above, petition was disposed of.[Rubina v. Axis Bank Ltd., 2021 SCC OnLine Mad 2349, decided on 2-07-2021]

Advocates before the Court:

For Petitioner: Mr. Adithya
For Respondent: Mr. R. Sreedhar

Case BriefsHigh Courts

Madras High Court: P. Velmurugan, J., directs Schools to keep a complaint box to make the victims complain about the sexual assault freely and keys of the same to be kept under the control of Secretary District Legal Services Authority.

Factual background

On the date of occurrence, when PW 2, the victim girl was going to attend School while crossing the appellant’s residence, the appellant/accused invited her to his house and with an intent to assault her sexually saying that he will tell the story of Jesus, sexually assaulted her.

It was stated that the appellant touched the victim girl all over her body, removed the bottom of Churidar, embarrassed her and kissed her in right cheek with sexual intent, which involved physical contact without penetration and further the accused threatened the victim girl to come to his house with an intention to repeat the same on her.

In view of the above set of circumstances, the present case was registered against the appellant.

Victim girl stated that after the above-stated occurrence she went to her classroom and intimated the same to her friend who was examined as PW 7 and she clearly spoke about the offence committed by the appellant.

It was noted that the age of the victim girl was 12 years at the time of occurrence and hence the victim was a child under the definition of Section 2(1)(d) of POCSO Act.

High Court stated that the appellant being the head of Religious Institution committed sexual assault on the victim child, who was aged about 12 years at the time of occurrence. Hence the act of appellant came under Section 9(f) punishable under Section 10 of the POCSO Act.

Court on perusal of the evidence produced, opined that the accused failed to rebut the presumption under Section 29 and 30 of the POCSO Act. Trial Court rightly appreciated the evidence of the prosecution and came to the conclusion that appellant/accused committed an offence under Section 9(1) punishable under Section 10 of the POCSO Act.

Bench dismissed the criminal appeal and upheld the trial Court’s decision.

High Court’s recommendation

Further, the Court expressed that normally female students would get fear in lodging complaints against Teacher or Management of School regarding sexual offences, considering their future, hence Government of Tamil Nadu shall form a committee at every school, consisting of the Social Welfare Officer, the Secretary of District Legal Services Authorities, female Police Official not below the rank of District Superintendent of Police, District Educational Officer, female Psychiatrist and Physician from the Government Hospital.

District Educational Officer may inspect the School once in a month to get grievance of the female students with regard to sexual assault and give confidence to the female children to come forward to make complaints against the sexual offenders, who may be a teaching or non-teaching staff and also the members of the Management of the School. [S. Jayaseelan v. State,  2021 SCC OnLine Mad 2580, decided on 12-07-2021]

Advocates before the Court:

For Appellant: Mr S. Samuel Raja Pandian for M/s. M.K. Selvakumar

For Respondent: Mrs T.P. Savitha Government Advocate (Crl.Side)

Case BriefsSupreme Court

Supreme Court: A 3-Judge Bench of the Supreme Court, by a majority of 2:1, has declared that certain portions of Section 184 of the Finance Act, 2017 as amended by the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 are unconstitutional and inoperative. Section 184 consists of provisions relating to the qualifications, appointment, etc., of Chairperson and Members of tribunals. The majority was formed by L. Nageswara Rao, J. who delivered the leading opinion, and S. Ravindra Bhat, J. penning a separate concurring opinion. Whereas, Hemant Gupta, J. wrote a substantially dissenting opinion.

The Challenge

The Madras Bar Association filed the instant writ petition seeking a declaration that Section 12 of the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 (“Ordinance”) and Section 184 of the Finance Act, 2017 as amended by the Ordinance are ultra vires Articles 14, 21 and 50 of the Constitution of India inasmuch as these are violative of the principles of separation of powers and independence of judiciary, apart from being contrary to the principles laid down by several earlier judgments[1] of the Supreme Court.

The dispute raised in the writ petition relates to:

(i) First proviso to Section 184(1) according to which a person below the age of 50 years shall not be eligible for appointment as Chairperson or Member; and also the second proviso, read with the third proviso, which stipulates that the allowances and benefits payable to Chairpersons and Members shall be the same as a Central Government officer holding a post carrying the same pay as that of the Chairpersons and Members.

(ii) Section 184(7) which stipulates that the Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member and the Central Government shall take a decision preferably within three months from the date of the recommendation of the Committee, notwithstanding any judgment, order or decree of any Court.

(iii) Section 184(11) which shall be deemed to have been inserted with effect from 26-5-2017, provides that the term of office of the Chairperson and Member of a tribunal shall be four years. The age of retirement of the Chairperson and Members is specified as 70 years and 67 years, respectively. As per the proviso, if the term of office or the age of retirement specified in the order of appointment issued by the Central Government for those who have been appointed between 26-5-2017 and 4-4-2021 is greater than that specified in Section 184(11), the term of office or the age of retirement shall be as set out in the order of appointment, subject to a maximum term of office of five years.

The Finance Act and the Ordinance

The Finance Act, 2017 was brought into force from 31-3-2017 to give effect to the financial proposals for the financial year 2017-18. Sections 183 to 189 thereof dealt with conditions of service of Chairperson and Members of Tribunals, Appellate Tribunals and other authorities.

The Tribunal Reforms (Rationalisation and Conditions of Service) Bill, 2021 was introduced in the Lok Sabha on 13-2-2021 but could not be taken up for consideration. According to the Statement of Objects and Reasons, the said Bill was proposed with a view to streamline tribunals and sought to abolish certain tribunals and other authorities, which “only add to another additional layer of litigation” and were not “beneficial for the public at large”. Thereafter, the Tribunal Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 was promulgated on 4-4-2021. Chapter XI thereof makes amendments to the Finance Act, 2017.

Discussion and Observations

  1. Separation of Power

Discussing this indispensable concept, the Court said that the doctrine of separation of powers, though not expressly engrafted in the Constitution, its sweep, operation and visibility are apparent from the scheme of the Indian Constitution. It forms part of basic structure of the Constitution. The Constitution has made demarcation, without drawing formal lines between the three organs ─ legislature, executive and judiciary, which is nothing but a consequence of principles of equality enshrined in Article 14 of the Constitution. Accordingly, breach of separation of judicial power may amount to negation of equality under Article 14. Stating thus, the Court reaffirmed:

“Violation of separation of powers would result in infringement of Article 14 of the Constitution. A legislation can be declared as unconstitutional if it is in violation of the principle of separation of powers.“

  1. Independence of Judiciary

On this point, the Court recorded that independence of judiciary is a fighting faith of our Constitution. It is cardinal principle of the Constitution that an independent judiciary is the most essential characteristic of a free society like ours and the judiciary which is to act as a bastion of the rights and freedom of people is given certain constitutional guarantees to safeguard independence of judiciary. An independent and efficient judicial system has been recognised as a part of basic structure of our Constitution.

After discussing Article 50 (which provides that the State shall take steps to separate the judiciary from the executive in the public services of the State) and Article 37 (which declares that the principles laid down in Part IV of the Constitution are fundamental in the governance of the country and it should be the duty of the State to apply the principles in making laws), the Court observed:

“[Independence] is the lifeblood of the judiciary. … It is the freedom from interference and pressures which provides the judicial atmosphere where [a Judge] can work with absolute commitment to the cause of justice and constitutional values. It is also the discipline in life, habits and outlook that enables a Judge to be impartial. Its existence depends however not only on philosophical, ethical or moral aspects but also upon several mundane things ─ security in tenure, freedom from ordinary monetary worries, freedom from influences and pressures within (from others in the judiciary) and without (from the executive).“

  1. Judicial Decisions and Legislative Overruling

The controversy that arose for consideration of the Court in the instant writ petition relates to the legislative response to the judgment of the Court in Madras Bar Assn. v. Union of India, 2020 SCC OnLine SC 962 (“Madras Bar Assn. case“). In that case, the validity of the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2020 (“2020 Rules”) was challenged by the Madras Bar Association. The relevant portions of the decision in Madras Bar Assn. case along with the affect of the Ordinance are discussed below at relevant place.

(A) Judicial Review

Appreciating the scope of judicial review of ordinances, the Court noted that it is the same as that of a legislative act. Article 123 of the Constitution empowers the President to promulgate an ordinance during recess of the Parliament, which shall have the same force and effect as an act of the Parliament. The validity of an ordinance can be challenged on grounds available for judicial review of a legislative act.

The power to strike down primary legislation enacted by the Union of India or the State legislatures is on limited grounds. Where there is challenge to the constitutional validity of a law enacted by the legislature, the Court must keep in view that there is always a presumption of constitutionality of an enactment and a clear transgression of constitutional principles must be shown. The Court reiterated that:

“[S]ans flagrant violation of the constitutional provisions, the law made by Parliament or a State legislature is not declared bad and legislative enactment can be struck down only on two grounds: (i) that the appropriate legislature does not have the competence to make the law, and (ii) that it takes away or abridges any of the fundamental rights enumerated in Part III of the Constitution or any other constitutional provisions. [‘Manifest arbitrariness’ is also recognised] as a ground under Article 14 on the basis of which a legislative enactment can be judicially reviewed.“

(B) Permissible Legislative Overruling

The Court culled out the principles in accordance with which legislative overruling could be permissible:

(i) The effect of the judgments of the Court can be nullified by a legislative act removing the basis of the judgment. Such law can be retrospective. Retrospective amendment should be reasonable and not arbitrary and must not be violative of the fundamental rights guaranteed under the Constitution.

(ii) The test for determining the validity of validating legislation is that the judgment pointing out the defect would not have been passed, if the altered position as sought to be brought in by the validating statute existed before the Court at the time of rendering its judgment. In other words, the defect pointed out should have been cured such that the basis of the judgment pointing out the defect is removed.

(iii) Nullification of mandamus by an enactment would be an impermissible legislative exercise. Even interim directions cannot be reversed by a legislative veto.

(iv) Transgression of constitutional limitations and intrusion into the judicial power by the legislature is violative of the principle of separation of powers, the rule of law and of Article 14 of the Constitution of India.

Validity of the Ordinance and Amended Provisions

The grievance of the petitioners was mainly related to the violation of the first proviso and the second proviso, read with the third proviso, to Section 184(1), Sections 184(7) and 184(11) of the Finance Act, 2017 as amended by the Ordinance.

  1. Section 184(1)

(A) The first proviso of Section 184(1) provides minimum age for appointment as Chairperson or Member of a tribunal as 50 years.

One of the issues considered in Madras Bar Assn. case was the correctness of the conditions imposed in the 2020 Rules that an advocate is eligible for appointment as a Member only if he has 25 years of experience. It is relevant to state that advocates were ineligible for most of the tribunals. In Madras Bar Assn. case, the Court found the exclusion of advocates from being appointed as Members to be contrary to earlier judgments of the Court. In such view of the matter, a direction was given to amend the 2020 Rules to make advocates with at least 10 years of experience at the bar eligible for appointment as Members in tribunals.

Discussing that the direction given in the nature of mandamus in Madras Bar Assn. case is to the effect that advocates are eligible for appointment as Members, provided they have experience of 10 years, the Court in the instant petition observed:

“The first proviso to Section 184 which prescribes a minimum age of 50 years is an attempt to circumvent the direction issued in Madras Bar Assn. case striking down the experience requirement of 25 years at the bar for advocates to be eligible. Introduction of the first proviso to Section 184(1) is a direct affront to the judgment of this Court in Madras Bar Assn. case.”

Underlining the importance of recruitment of Members from the bar at a young age to ensure a longer tenure, the Court was of the view that fixing a minimum age for recruitment of Members as 50 years would act as a deterrent for competent advocates to seek appointment. Practically, it would be difficult for an advocate appointed after attaining the age of 50 years to resume legal practice after completion of one term, in case he is not reappointed. Security of tenure and conditions of service are recognised as core components of independence of the judiciary. Independence of the judiciary can be sustained only when the incumbents are assured of fair and reasonable conditions of service, which include adequate remuneration and security of tenure.

The Court found that first proviso to Section 184(1) is in violation of the doctrine of separation of powers as the judgment Madras Bar Assn. case has been frustrated by an impermissible legislative override.

Resultantly, the first proviso to Section 184(1) was declared unconstitutional as it is violative of Article 14 of the Constitution.

It was directed that the selections conducted for appointment of Members, ITAT pursuant to the advertisement issued in 2018 should be finalised and appointments made by considering the candidates between 35 to 50 years as also eligible.

Ravindra Bhat, J., in his separate concurring opinion said that:

“Prescribing 50 years as a minimum age limit for consideration of advocates has the devastating effect of entirely excluding successful young advocates, especially those who might be trained and competent in the particular subject (such as Indirect Taxation, Anti-Dumping, Income-Tax, International Taxation and Telecom Regulation). The exclusion of such eligible candidates in preference to those who are more than 50 years of age is inexplicable and therefore entirely arbitrary.“

(B) The second proviso to Section 184(1) deals with the allowances and benefits payable to the Members which are to be the same as are admissible to a Central Government officer holding a post carrying the same pay.

In Madras Bar Assn. case, the Court considered Rule 15 of the 2020 Rules according to which, Chairpersons and Members of tribunals were entitled to House Rent Allowance at the same rate as admissible to officers with the Government of India holding Group ‘A’ post carrying the same pay. In that case, it was noted that an amount of Rs 75,000 per month which was paid as HRA was not sufficient to get a decent accommodation in Delhi for Chairpersons and Members of tribunals. Taking note of the serious problem of housing and the inadequate amount that was being paid as HRA to the Members, the Court in that case directed enhancement of HRA to Rs 1,25,000 per month to the Members and Rs 1,50,000 per month to Chairperson or Vice-Chairperson or President of tribunals. This direction was made effective from 1-1-2021.

Noting the submission of the Amicus Curiae that result of the instant amendment made by the Ordinance is that the Members of tribunals working in Delhi will get Rs 60,000 as HRA, the Court was of the view that the second proviso to Section 184(1), read with the third proviso, is an affront to the judgment in Madras Bar Assn. case. The direction issued in Madras Bar Assn. case for payment of HRA was to ensure that decent accommodation is provided to tribunal Members. Such direction was issued to uphold independence of the judiciary and it cannot be subject matter of legislative response. The Court held that a mandamus issued by the Supreme Court cannot be reversed by the legislature as it would amount to impermissible legislative override.

Therefore, the second proviso, read with the third proviso, to Section 184(1) was declared as unconstitutional.

The Court noted that after the judgment in the instant writ petition was reserved on 3-6-2021, the Ministry of Finance amended the 2020 Rules whereby the earlier Rule 15 was substituted[2]. The Explanatory Memorandum at the end of the notification states that the amendment to Rule 15 of the 2020 Rules on HRA, shall be given retrospective operation with effect from 1-1-2021, in order to give effect to the judgment in Madras Bar Assn. case. The Court was of the opinion that this amendment to Rule 15 is in conformity with the directions on the subject of HRA in Madras Bar Assn. case. In view thereof, no further direction is required to be given with respect to HRA.

  1. Section 184(7)

(A) Section 184(7) stipulates that a Search-cum-Selection Committee shall recommend a panel of two names for appointment to the post of Chairperson or Member and the Central Government shall take a decision preferably within three months from the date of the recommendation of the Committee, notwithstanding any judgment, order or decree of any Court.

Rule 4(2) of the 2020 Rules pertains to the procedure to be followed by the Selection Committee. According to the said Rule, the Selection Committee should recommend two or three names for appointment to each post. A direction was given in Madras Bar Assn. case to amend Rule 4(2) of the 2020 Rules to provide that the Selection Committee shall recommend one person for appointment in each post in place of a panel of two or three persons for appointment to each post.

The Court recorded that sufficient reasons were given in Madras Bar Assn. case to hold that executive influence should be avoided in matters of appointments to tribunals ─ therefore, the direction that only one person shall be recommended to each post. The decision of the Court in that regard is law laid down under Article 141 of the Constitution. The only way the legislature could nullify the said decision was by curing the defect in Rule 4(2). There is no such attempt made except to repeat the provision of Rule 4(2) of the 2020 Rules in the Ordinance amending the Finance Act, 2017.

Ergo, Section 184(7) was declared to be unsustainable in law as it is an attempt to override the law laid down by the Supreme Court.

(B) The second part of Section 184(7) provides that the Government shall take a decision regarding the recommendations made by the Selection Committee preferably within a period of three months. This was in response to the direction in Madras Bar Assn. case that the Government shall make appointments to tribunals within three months from the completion of the selection and recommendation by the Selection Committee.

Such direction, the Court noted, was necessitated in view of the lethargy shown by the Union of India in making appointments and filling up the posts of Chairpersons and Members of tribunals which have been long vacant. The direction given in Madras Bar Assn. case for expediting the process of appointment was in the larger interest of administration of justice and to uphold the rule of law.

The Court held, Section 184(7) as amended by the Ordinance permitting the Government to take a decision preferably within three months from the date of recommendation of the Selection Committee is invalid and unconstitutional, as this amended provision simply seeks to negate the directions of the Supreme Court.

  1. Section 184(11)

(A) The tenure of the Chairperson and Member of a tribunal is fixed at four years by Section 184(11), notwithstanding anything contained in any judgment, order or decree of any court. Sub-section (11) of Section 184 has been given retrospective effect from 26-5-2017.

Rule 9 of 2020 Rules had specified the term of appointment of the Chairperson or Member of the Tribunal as four years.  After perusing the law laid down by earlier judgments that a short stint is anti-merit, the Court in the Madras Bar Assn. case directed the modification of tenure in Rules 9(1) and 9(2) as five years in respect of Chairpersons and Members of tribunals.

The Court, in the instant petition, held that insertion of Section 184(11) prescribing a term of four years for the Chairpersons and Members of tribunals by giving retrospective effect to the provision from 26-5-2017 is clearly an attempt to override the declaration of law by the Supreme Court under Article 141 in the Madras Bar Assn. case.

Therefore, clauses (i) and (ii) of Section 184(11) were declared as void and unconstitutional.

(B) The proviso to Section 184(11) refers to appointments that were made to the posts of Chairperson or Members between 26-5-2017 and the notified date, i.e., 4-4-2021. The proviso lays down that the term of office of Chairperson and Members of tribunals who were appointed between 26-5-2017 and 4-4-2021 shall be five years even though the order of appointment issued by the Government had a higher term of office or age of retirement.

On this point, the Court referred to the interim directions given by the Supreme Court on 9-2-2018 in Kudrat Sandhu v. Union of India, 2018 SCC OnLine SC 2898 wherein it was held that all selections to the post of Chairperson/ Chairman, Judicial/ Administrative Members shall be for a period as provided in the Act and the Rules in respect of all tribunals. Reference was also made to certain subsequent orders passed in the same case of Kudrat Sandhu.

Coming back to the instant petition, the Court was of the opinion that though, there is nothing wrong with the proviso to Section 184(11) being given retrospective effect, the appointments made pursuant to the interim directions passed by the Supreme Court cannot be interfered with. The Court pointed out that even the interim orders passed by the Supreme Court cannot be overruled by a legislative act.

While making it clear that the appointments that are made to the CESTAT on the basis of interim orders passed by the Supreme Court shall be governed by the relevant statute and the rules framed thereunder, as they existed prior to the Finance Act, 2017, the Court upheld the retrospectivity given to the proviso to Section 184(11). Clarifying further, the Court stated that appointments after 4-4-2021 shall be governed by the Ordinance, as modified by the directions in the instant judgment.

Consequently, Section 12 of the Ordinance making amendments in the earlier Section 184 of the Finance Act, 2017, also stands invalidated.

The Dissent

Lastly, it may also be mentioned that the upshot of the dissenting opinion written by Hemant Gupta, J. (as summarised by S. Ravindra Bhat, J. in his opinion) was that as regards prescription of minimum age or with respect to conditions of service such as payment of house rent allowance, the Court ought to respect legislative wisdom; and that the directions issued in past judgments cannot bind Parliament, as they fell outside the judicial sphere.

The writ petition stood disposed of in terms of the majority judgment. [Madras Bar Assn. v. Union of India, 2021 SCC OnLine SC 463, decided on 14-7-2021]

[1] Union of India v. Madras Bar Assn., (2010) 11 SCC 1; Madras Bar Assn. v. Union of India, (2014) 10 SCC 1; Rojer Mathew v. South Indian Bank Ltd., (2020) 6 SCC 1; and Madras Bar Assn. v. Union of India, 2020 SCC OnLine SC 962

[2] Vide Rule 6, the Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) (Amendment) Rules, 2021

Tejaswi Pandit, Senior Editorial Assistant has reported this brief.

Case BriefsHigh Courts

Madras High Court: V. Parthiban, J., expressed that plea of public interest in a private loan transaction is only a mask to conceal for petitioners’ interest with a view to obstruct the enforcement of contractual obligation.

Instant petition was filed against the letter of respondent calling upon the petitioner company to forthwith pay Rs 1995,05,17,808 within 7 days failing which, further action would be taken including revocation of Restructuring Agreement entered into between the parties.

Analysis, Law and Decision

What is challenged in the instant petition?

The dispute is between private entities. A communication dated 30-04-2021 issued by the fourth respondent, a private company (an Asset Reconstruction Company), against the petitioner invoking certain clauses in terms of restructuring agreement of loan between the contesting parties, was challenged.

With respect to the issue of maintainability of writ against a private person or private legal entity, the legal position was no more res integra, as various decisions of the Supreme Court and High Court held that the issuance of the writ could not be denied merely because it sought to be issued against a private person or private entity.  Hence, the Court observed that,

“…this Court does not wish to open up any fresh vista on the rudimentary understanding of the progressive expansion of public law jurisdiction in matters where the Court finds interplay of private interest and public duty.”

 The judicial endeavour is appreciation of the relationship of the parties, their mutual rights and obligations within the private and commercial framework and in that relationship collaterally or concomitantly any public duty is imposed, or public interest is involved to bring the dispute arising from such relationship within the mischief of writ jurisdiction of the Court or not?

Petitioner’s primary contention was that, the 4th respondent which stepped into the shoes of consortium of initial lenders namely 9 nationalised banks failed to implement and comply with the Reserve bank of India circulars before issuing the impugned communication. In view of such a contention, it was stated that when there was a duty cast upon the banks and the financial institutions which admittedly included the 4th respondent, failure to follow the circulars amounted to abdicating its public duty enjoined upon them and in that view of the matter, a command ought to be issued by the Court by way of a Writ for their compliance.

Judicial Scrutiny

In a contractual relationship purely governed by commercial consideration, enforcing the terms of contract/agreement by one party as against the other could be subjected to judicial scrutiny under writ jurisdiction of the Court, is a knotty question and the answers are not be found on any definite legal principles or defined contours of factual circumstances.

Elaborating the above, it was stated that as a consequence of the march of law the judicial review is directed against the action, decision making process and not concerned with identity of the body as such.

High Court observed that the circular dated 27-03-2020 which appeared to be the fulcrum of the petitioner’s submission for maintaining the writ petition began with the preamble that certain regulatory measures had been initiated and announced by the Reserve Bank of India for schedule of payment due to Covid-19 crisis.

The said circular envisaged granting of moratorium that all payments due between March 2020 and May, 2020 would be shifted by 3 months extending the period of the payment to August 2020. The circular, while delineating the policy, permitted the financial institutions to consider grant of the benefit of moratorium. The circular also envisages exemption from the benefit in regard to the loan accounts being declared as NPA.

Further, in the said circumstances, admittedly individual financial institutions were given latitude and discretion to take a call in regard to the extension of the moratorium benefit to its borrowers.

Entitlement of the petitioner as to the benefit fell squarely within the framework as between the 4th respondent and petitioner.

When the relationship is founded on the Commercial and the contractual terms and understanding, the extension of the benefit of the moratorium by one party in favour of the other party, is dependent on various facts to be taken into consideration within the private and contractual precincts of such relationship.

Bench expressed that,

If this Court were to investigate into the disputed areas of understanding between the private parties, it would certainly amount to pitch forking a public law jurisdiction into a private dispute arising under a valid contractual relationship between the parties.

High Court stated that merely because RBI Circulars were issued during the pandemic crisis, it cannot change or transform the core character of the relationship of the parties and assume the coloration of public interest.

Bench expressed that it does not find any public character attached to the relationship of the parties. Transaction between them was plainly commercial without a tinge or shade of public function involved.

Further, the Court did not see any public duty imposed on 4th respondent that is referable in the context of complying with certain provisions contained in the enactments like Industrial Disputes Act, Minimum Wages Act, the Factories Act or the Statutes relating to Pollution etc., or even certain duties which have been imposed by common law, custom, or even contract stretching the requirement in terms of the observation of the Supreme Court of India in Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC 331.

Public duty becomes enforceable only when there is legal compulsion for its adherence.

Court opined the following:

  • There was no compulsion imposed on 4th respondent to extend the benefit of moratorium, regardless of the nature of the default and nature of agreement between the parties.
  • In absence of any compulsion/obligation or legal mandate to follow a particular course of action, the right exercised by the 4th respondent within the 4 corners of the commercial agreements and the disputes arising thereof would certainly not come within the broad context of public law recourse.

Activities of Port: Public Interest?

It was submitted by 1st respondent Port that the activities with respect to 1st respondent Port substantially touch upon the public interest. Any disruption of its activities by the adverse action of 4th respondent would only lead to a short supply of essential goods and ultimately, would only undermine the public interest.

Employment was also provided by the 1st respondent to thousands of employees and the continuance of payments of salaries and other related obligations would also get affected as a consequence of respondent 4’s action.

Bench stated that no doubt Port activities are essential services to keep the public interest afloat, but the 1st respondent was again a private company. Its activities may touch upon the public interest, nevertheless, the petitioner cannot be allowed to craftily project the port activities for the purpose of hitching on the public interest bandwagon.

In High Court’s view, the petitioner attempted to stealthily subserve their private interest behind the facade of public interest citing port activities.

On a wafer-thin legal basis, contending RBI circulars being not followed, the writ petition was sought to be maintained. Court stated that such slender premise is not good enough to maintain the writ petition in the circumstances of the case. 

In view of the Supreme Court decision in Central Bank of India v. Ravindra, (2002) 1 SCC 367, it was observed that where transactions concerned are not squarely governed by the RBI Circulars, in that case, such circulars are to be treated as standards to judge whether the action taken by the private Banks is opposed to any public policy. Hence, the petitioner cannot compel the Court to issue a command, namely Mandamus and more so, Writ of Certiorari.

Facts in the case of Bombay High Court’s decision in TransconIconica (P) Ltd. v. ICICI Bank, 2020 SCC Online Bom 626, are identical to the present matter. In the said matter directions were passed.

In Karnataka High Court’s decision of Velankani Information Systems Ltd. v. Ministry of Home Affairs, 2020 SCC Online Kar 835, the challenge was to the action initiated by a private bank and the challenge principally was on the ground that Bank did not follow RBI Circular.

The Court found that the Bench in the above decision delved pervasively into the factual disputes and held that petitioner was entitled to the moratorium protection and in that context, RBI was directed to enforce the recovery package as contained in the RBI Circular and consequently the action initiated by the private lending institution came to be set aside.

Further, the Court remarked that it is unable to follow the above judgment.

In the present matter, the very entitlement of the benefit of a moratorium was being questioned seriously and the Court was also of prima facie view that there appears to be a substantial force in the submissions of 4th respondent. Therefore, the applicability of the RBI circular itself being an unsure case of the petitioner, question of maintaining the petition would necessarily fail on that plank.

“… already stretched boundaries of writ jurisdiction for advancing the bonafide constitutional goals cannot be further stretched to bring all private disputes within the fold of judicial review.”

 Concluding the decision, Bench held that in exercise of writ jurisdiction, the Court would certainly not get involved in the commercial disputes entirely arising from the private relationship driven by commercial consideration and issue any command as that would amount to injudicious intrusion and invasive transgression into the defined areas of conflict governed by mutual rights, liabilities and obligations.

In view of the above discussion, petition was dismissed. [Marg Limited v. Karaikal Port (P) Ltd., 2021 SCC OnLine Mad 2585, decided on 2-07-2021]

Case BriefsHigh Courts

Madras High Court: Dr G. Jayachandran, J., refused to pass a decree in favour of the plaintiff who relied on general admission of facts made by the defendant.

In the instant matter, it was stated that the plaintiff was engaged in the business of providing and arranging finance to various borrowers and had lent a loan to the first defendant company, which is an NBFC.

On the date of filing the suit, a sum of Rs 38,16,45,711/- was due and payable to the plaintiff. While advancing the loan, the second defendant provided personal guarantees for each of the facility agreements entered by the first defendant.

The second and third defendants were jointly and severally liable to pay the suit claim.

According to the plaintiff, since 2014, the transaction between the plaintiff and the first defendant company was regular without any default till the month of September 2020.

Further, it was submitted that the misappropriation of the fund by the Management of the Company came to light, when there was a default and when the Chief Financial Officer of the first defendant issued a Circular on 07-10-2020 disclosing diversion of the fund of the first defendant company by the second defendant as a consequence, criminal proceedings had been initiated by the plaintiff and the matter had been seized by the Directorate of Enforcement Wing.

Extracting a certain portion of the pleadings in the written statement, the plaintiff sought passing of a decree and judgment upon the said statement as admission.

Bench stated that the three admissions which were relied upon by the applicant were all general admissions and did not admit the suit claim.

Further, the Court added that the admission that fraud was committed per se will not entail the plaintiff for a decree as claimed in the suit. Whatever claimed in the suit has to be proved through evidence in the manner known to law and the portions of the admission relied upon by the plaintiff/applicant is a general admission of fact regarding the liability of the first defendant company and its inability to pay his creditors. The general admissions of fact cannot be construed as an admission of suit claim to pass a judgment and decree.

In view of the above application was dismissed. [Northern Arc Capital (P) Ltd. v. Sambandh Finserve (P) Ltd., 2021 SCC OnLine Mad 2577, decided on 5-07-2021]

Advocates before the Court:

For Applicant: Mr Anirudh Krishnan

For 1st Respondent: Mr. Supriyo Ranjan Mahaptra

For 2nd respondent: Mr Prashant Rajapogal

Case BriefsHigh Courts

Madras High Court: M. Nirmal Kumar, J., directed police protection to a member of the LGBTQIA+ Community who had apprehension of being subjected to honour killing.

Member of LGBTQIA+ Community

Present criminal petition was filed to seek police protection as the petitioner had received frequent life threats from her family members since the time, she disclosed that she was a queer person belonging to the LGBTQIA+ Community.

Petitioners’ father’s brothers sent the petitioner an FIR filed against her for ‘women missing’ even after knowing the fact that petitioner had left home on her own in order to protect herself.

 Further, it was stated that the petitioner’s apprehension is that her family members may resort to honour killing or adopt other tactics to cause grievous physical harm to her.

In view of the above background, she sought police protection.

Analysis, Law and Decision

Bench noted that the petitioner admitted the fact that she belongs to the LGBTQIA+ Community and was living with her partner now, though on earlier occasions they were forcibly separated.

High Court stated that considering the precariousness, in which such people are made to lead their life, the guidelines to police have already been issued in the decision of this Court in S. Sushma v. Commissioner of Police, 2021 SCC OnLine Mad 2096.

Hence, in the present matter, Police was directed to not casue any harassment and give appropriate protection for the safety and life of petitioner following the above-stated decision of this Court.

In view of the above criminal original petition was disposed of. [X v. State of T.N., Crl. OP No. 10880 of 2021, decided on 25-06-2021]

Advocates before the Court:

For Petitioner: V. Chethana

For Respondent: A. Damodaran, Government Advocate (Crl. Side)

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