Op EdsOP. ED.

1. Chapter V (Sections 105 to 117) of the Transfer of Property Act, 1882[1] (for short ‘TPA’) embodies the provisions relating to the leases of immoveable property. Section 105 of TPA defines a lease as:

105. Lease defined.—  A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined.— The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.”

2. The above definition of the lease under TPA postulates that besides other essential elements of a lease i.e. the parties being the lessor and the lessee; the subject-matter being an immoveable property; demise being a transfer of a right to enjoy; and the consideration being a price paid or promised being the premium or the rent, the time or the term or period of the said lease is an essential requisite of a valid lease. A valid lease may be granted for a certain time, express or implied, or in perpetuity. A lease which is silent as to the duration of its term will not be lease within the meaning of Section 105 of TPA.

3. The commencement of a lease must be certain or capable of being ascertained with certainty afterwards, so that both the time when it begins and the time when it ends, is fixed. A provision in the lease relating to duration thereof may be implied by law or usage. Even Section 106 of TPA, inter alia provides that in absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be lease from year to year and that a lease of immoveable property for any other purpose shall be deemed to be lease from month to month.

4. Section 107 of TPA provides as to how the leases of immoveable property shall be made in law. The said section reads as under:

107. Leases how made.— A lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.

All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:

Provided that the State Government may from time to time, by notification in the Official Gazette, direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.”

5. This section prescribing the procedure for making of a lease between the parties classifies them into two”

One, a lease of immoveable property from year to year, or for a term exceeding a year, or lease reserving a yearly rent, can only be made by a registered document; and

Second, all other leases other than the above, can either be made by registered instrument, or the said lease to be made by an oral agreement accompanied by delivery of possession.

6. Therefore, it is manifest that all the leases of immoveable property not covered in the second classification shall have to be necessarily made by a registered document only. Needless to state that all the leases not covered by the first above have to be made either by registered document or by an oral agreement accompanied by delivery of possession.

 Effect of non-registration

7. Section 17(1)(d) of the Registration Act, 1908[2] provides that leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent have to be necessarily registered.

8. Section 49 of the same Act, inter alia provides that no instrument which is compulsorily required to be registered shall affect any immovable property comprised therein, or confer any power to adopt, or be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered. However, an unregistered document affecting immovable property and required by the Registration Act or the TPA to be registered, may be received as evidence of any collateral transaction not required to be effected by registered instrument.

9. As already noted, period of tenancy is an essential requisite of a valid lease. Therefore, an unregistered lease deed cannot be looked into for purposes of period of tenancy. It thus follows that in respect of the leases classified in One under Section 106 TPA which require compulsory registration for making of a lease in law under Section 107 of TPA and is not so registered, the said instrument cannot be used for the purpose of establishing that it created, declared, assigned, limited or extinguished any right to the property comprised in the said document, and the said document will only create a month to month tenancy or year to year depending upon the purpose thereof. Therefore, if Sections 106 and 107 TPA are read accordingly, there shall be no conflict between the two.

10. The Calcutta High Court in the decision reported as Debendra Nath Bhowmick v. Syama Prosanna Bhowmick[3],  laid down the following dicta:

 “Then assuming that this case is governed by the Transfer of Property Act, I should like to notice the argument that because an annual rent was mentioned, the tenancy must be taken to be a yearly one. The lease was not for agricultural or manufacturing purposes and therefore must, in the absence of a contract to the contrary, be deemed to be a tenancy from month to month. It is said here that there was such a contract, for a yearly tenancy is to be implied from the mention of an annual rent. But when Section 106 speaks of a contract I think it means a valid contract. But in the present case there is no such contract and under Section 107 a lease such as is argued, for in this appeal can only be created by a registered instrument and there is none here. The notice was therefore sufficient so far as the tenancy is concerned.”

 11. Whether tenancy of immovable property for any purpose other than agricultural or manufacturing created by an unregistered instrument would be deemed to be ‘month to month’ tenancy even where the tenant has paid annual/yearly rent to the landlord has been answered in a three-Judge Bench decision of the Supreme Court reported as Ram Kumar Das v. Jagdish Chandra Deo[4]. The facts of said case were that the landlord had not executed a registered instrument for lease of land in favour of tenant. The tenancy created was neither for agricultural or manufacturing purpose. On two occasions, the tenant had tendered annual rent to the landlord. The landlord had terminated the tenancy by giving 15 days’ notice in terms of the second paragraph of Section 106 of TPA by treating the tenancy as from month to month. The question which had arisen before the Supreme Court was whether the tenancy was a monthly tenancy as treated by the landlord or a yearly tenancy since the tenant had paid annual rent to the landlord. It was argued on behalf of the tenant that in view of the fact that rent paid by the tenant was annual rent, it can be inferred that the intention of the parties was certainly not to create monthly tenancy but yearly tenancy, which argument was negatived by the Court in the following terms:

“….It is conceded that in the case before us the tenancy was not for manufacturing or agricultural purposes. The object was to enable the lessee to build structures upon the land. In these circumstances, it could be regarded as a tenancy from month to month, unless there was a contract to the contrary. The question now is, whether there was a contract to the contrary in the present case? Mr. Setalvad relies very strongly upon the fact that the rent paid here was an annual rent and he argues that from this fact it can fairly be inferred that the agreement between that parties was certainly not to create a monthly tenancy. It is not disputed that the contract to the contrary, as contemplated by Section 106 of the Transfer of Property Act, need not be an express contract; it maybe implied, but it certainly should be a valid contract. If it is no contract in law, the section will be operative and regulate the duration of the lease. It has no doubt been recognised in several cases that the mode in which a rent is expressed to be payable affords a presumption that the tenancy is of a character corresponding thereto. Consequently, when the rent reserved is an annual rent, the presumption would arise that the tenancy was an annual tenancy unless there is something to rebut the presumption. But the difficulty in applying this rule to the present case arises from the fact that a tenancy from year to year or reserving a yearly rent can be made only by registered instrument, as laid down in Section 107 of the Transfer of Property Act (vide Debendra Nath v. Syama Prosanna[5]. The Kabuliyat in the case before us is undoubtedly a registered instrument but ex concessis it is not an operative document at all and cannot consequently fulfil the requirements of Section 107 of the Transfer of Property Act.

  1. This position in fact is not seriously controverted by Mr. Setalvad; but what he argues is that a lease for one year certain might fairly be inferred from the payment of annual rent, and a stipulation like that would not come within the mischief of Section 107 of the Transfer of Property Act. His contention is that the payment of an annual rent, as was made in the present case, is totally inconsistent with a monthly lease. We are not unmindful of the fact that in certain reported cases, such inference has been drawn. One such case has been referred to by Reuben, J. in his judgment [Aziz Ahmad v. Alaudd in Ahmad[6] , where reliance was placed upon an earlier decision of the Calcutta High Court (Md. Moosa v. Jaganund[7])]. A similar view seems to have been taken also in Matilal v. Darjeeling Municipality[8].
  2. But one serious objection to this view seems to be that this would amount to making a new contract for the parties. The parties here certainly did not intend to create a lease for one year. The lease was intended to create a lease for one year, but as the intention was not expressed in the proper legal form, it could not be given effect to. It is one thing to say that in the absence of a valid agreement, the rights of the parties would be regulated by law in the same manner as if no agreement existed at all; it is quite another thing to substitute a new agreement for the parties which is palpably contradicted by the admitted facts of the case.
  3. It would be pertinent to point out in this connection that in the second appeal preferred by the plaintiff against the dismissal of his earlier suit by the lower appellate court, the High Court definitely held that the defendant’s tenancy was one from month to month under Section 106, Transfer of Property Act, and the only question left was whether payment to the Receiver amounted to payment to the plaintiff himself. In this suit the defendant admitted in his written statement that payment to the Receiver had the same effect as payment to the plaintiff, and the trial Judge took the same view as was taken by the High Court on the previous occasion, that by payment too and acceptance of rent by the Receiver, the defendant become a monthly tenant under Section 106, Transfer of Property Act. In his appeal before the District Judge which was the last court of facts, the only ground upon which the defendant sought to challenge this finding of the trial Judge was that the Receiver was an unauthorised person because of the decision of the Judicial Committee which set aside his appointment and consequently acceptance of rent by such person could not create a monthly tenancy. This shows that it was not the case of the defendant at any stage of this suit that because one year’s rent was paid a tenancy for one year was brought into existence. We think, therefore, that on the facts of this case it would be quite proper to hold that the tenancy of the defendant was one from month to month since its inception in 1924. This view finds support from a number of reported cases (vide Debendra Nath v. Syama Prasanna[9] ; Sheikh Akloo v. Emaman[10]), and in all these cases the rent payable was a yearly rental. On this finding no other question would arise and as the validity of the notice has not been questioned before us, the plaintiff would be entitled to a decree in his favour. The appeal thus fails and is dismissed with costs.”

 12. The effect of a compulsorily registrable lease, if not registered, was also explained by the e Delhi High Court in Deluxe Dentelles Pvt. Ltd. v. Ishpinder Kochhar[11] as under:

“21. A lease granted for any purpose, be it residential, commercial, manufacturing or agricultural, can be made only by a registered instrument if duration of the lease is for the period stated in the first paragraph of Section 107 of the Transfer of Property Act, 1882. But, a lease for the same purpose(s) of a lesser duration can be made, under the second paragraph, either by a registered instrument or by an oral agreement accompanied by delivery of possession.

  1. If one looks to Section 106 of the Transfer of Property Act it becomes evident that the classification of leases is according to their purpose. Section 106 classifies leases of immovable property for agricultural and manufacturing purposes in one class and all other leases in different class.
  2. Sub-section (1) of Section 106 is a deeming provision as per which, in the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year. Thus, where the parties have themselves indicated the duration of the lease relatable to agricultural or manufacturing purposes, sub-section (1) of Section 106 o f the Transfer of Property Act would be redundant. This is evident from the fact that sub-section (1) of Section 106 operates only “in the absence of a contract…..to the contrary”.
  3. Pertaining to leases, excluding leases for agricultural or manufacturing purposes, the legal fiction created in the second paragraph of sub-section (1) of Section 106 is to deem the leases to be from month to month. Of course, this deeming provision would also be ‘in the absence of a contract….to the contrary’.
  4. In the present case, the defendants have admitted the jural relationship of landlord and tenant between the plaintiff and Defendant 1. As per both plaintiff and defendants, Defendant 1 was inducted as a tenant in the suit premises by virtue of unregistered lease-deed dated November 21, 1999 for a period of eleven years and eleven months.
  5. The case (defence) set up by the defendants is that notwithstanding the fact that the lease-deed dated November 21, 1999 executed between the parties is an unregistered document, the tenancy of Defendant 1was not from month to month but for a period of eleven years and eleven months with an option to Defendant 1 to renew the lease by another period of eleven years inasmuch as Defendant. 1 had paid rent in advance to Ms. Neeta Mehra, erstwhile owner of the suit premises for a period of fourteen years approximately at the time when it was inducted in the suit premises.

                *                           *                      *

  1. In view of afore-noted authoritative pronouncement of law laid down by Supreme Court in Ram Kumar’s case (supra), the answer to the question posed above is: tenancy of immovable property for any purpose other than agricultural or manufacturing created by an unregistered instrument would be deemed to be ‘month to month’ tenancy even where the tenant has paid annual/yearly rent to the landlord.

  2. As a necessary corollary thereof, the tenancy of Defendant 1 in suit premises is deemed to be ‘month to month’ tenancy which could be terminated by giving 15 days’ notice. (We again note here that Defendant 1 has admitted the receipt of legal notice dated May 03, 2010 issued by the plaintiff terminating the tenancy of Defendant 1).” 

13. The Supreme Court in Park Street Properties (Pvt.) Ltd. v. Dipak Kumar Singh[12], held as under:

“9. A perusal of Section 106 of the Act makes it clear that it creates a deemed monthly tenancy in those cases where there is no express contract to the contrary, which is terminable at a notice period of 15 days. The section also lays down the requirements of a valid notice to terminate the tenancy, such as that it must be in writing, signed by the person sending it and be duly delivered.

11. It is also a well-settled position of law that in the absence of a registered instrument, the courts are not precluded from determining the factum of tenancy from the other evidence on record as well as the conduct of the parties…” 

14. The High Court of Delhi in  Sanjay Gupta v. Krishna Hospitality[13] , observed as under:

“11. Per Section 107 of the Transfer of Property Act, 1882, a lease of immovable property for any term exceeding one year can be made only by a registered instrument and all other leases may be made either by registered instrument executed by the lessor and lessee or by oral agreement accompanied with delivery of possession. The defendants in their written statement have pleaded lease agreement dated 23rd November, 2015, for a period of three years, executed by plaintiff and defendants and where under claim to be entitled to occupy premises till 31st October, 2018. The same is not registered and is admitted to be not registered. The same thus, under Section 49 of Registration Act, 1908, cannot be received in evidence of any transaction effecting such property. Per Section 106 of Transfer of Property Act, in the absence of registered lease deed, a lease of immovable property for any purpose other than agricultural or marketing, is deemed to be a lease from month to month, terminable by a fifteen days’ notice…”

15. The principle was reiterated by the Supreme Court in Sevoke Properties Ltd. v. West Bengal State Electricity Distribution Company Ltd.[14],  when it observed as under:

“13. In terms of the provisions of Section 107, a lease of immovable property for a term exceeding one year can only be made by a registered instrument.  Admittedly, in the present case, the indenture of lease has not been registered. In consequence, the contents of the indenture would be inadmissible in evidence for the purpose of determining the terms of the contract between the parties. This is the plain consequence of the provisions of Sections 17 and 49 of the Registration Act, 1908. The only purpose for which the lease can be looked at is for assessing the nature and character of the possession of the respondent.”

 Renewal v. Extension of lease

16. An instrument of lease may contain a provision to the effect that on the expiry of the term of the lease, it is to be renewed or extended. Such a provision may not ipso facto renew or extend the term of the lease but it entitles the lessee to obtain a new lease in his favour after the expiry of the original term. The Supreme Court in its judgment in Hindustan Petroleum Corporation Ltd.   Dolly Das[15], observed as under:

“12…Covenant for renewal is not treated as part of terms prescribing the period of lease but only entitles a lessee to obtain a fresh lease…”

 17. Renewal and extension of lease are two different concepts. They are not defined in TPA. As per Webster dictionary, ‘to renew’ means ‘to make like new’or ‘to restore to existence’; and ‘to extend’ means ‘to stretch out to fullest length’.

18. The distinction between these two concepts has often been a subject of discussion and has been considered by the Supreme Court in its judgment titled as Provash Chandra Dalui. v. Biswanath Banerjee[16] , while observing as under:

“14. It is pertinent to note that the word used is ‘extension’ and not ‘renewal’. To extend means to enlarge, expand, lengthen, prolong, to carry out further than its original limit. Extension, according to Black’s Law Dictionary, means enlargement of the main body; addition to something smaller than that to which it is attached; to lengthen or prolong. Thus extension ordinarily implies the continued existence of something to be extended. The distinction between ‘extension’ and ‘renewal’ is chiefly that in the case of renewal, a new lease is required, while in the case of extension the same lease continues in force during additional period by the performance of the stipulated act.”

19. The distinction between the said two concepts was reiterated by the Supreme Court in the judgment of State of U.P.   Lalji Tandon[17], in the following words:

“13….There is a difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease, again in accordance with the covenant for renewal contained in the original lease. In the case of extension it is not necessary to have a fresh deed of lease executed; as the extension of lease for the term agreed upon shall be a necessary consequence of the clause for extension..”

 20. This distinction was reiterated by the High Court of Delhi in  Aggarwal and Modi Enterprises (Cinema Project) Pvt. Ltd.   New Delhi Municipal Council[18].

21. Reiterating the distinction between the two concepts, as enunciated in Provash Chandra Dalui and Lalji Tandon (supra), the Supreme Court in its judgment titled as Hardesh Ores Pvt. Ltd. v. Hede and Company[19],  observed as under:

“25. Having regard to these decisions we must hold that in order to give effect to the renewal of a lease, a document has to be executed evidencing the renewal of the agreement or lease, as the case may be, and there is no concept of automatic renewal of lease by mere exercise of option by the lessee. It is, therefore, not possible to accept the submission urged on behalf of the appellants-plaintiffs that by mere exercise of option claiming renewal, the lease stood renewed automatically and there was no need for executing a document evidencing renewal of the lease.”

 22. The High Court of Calcutta in the judgment of Renuka Seal  Sabitri Dey[20]  has made distinction between the concepts of renewal and extension of lease in the following words:

 “24…”To extend” means to enlarge, expand, lengthen, prolong to carry out further than its original limit. In other words, “extension” means enlargement of the main body; addition of something smaller than that to which it is attached; to lengthen or prolong. Thus, extension ordinarily implies the continued existence of something to be extended. But “renewal of lease” means creation of a new lease which creates a fresh right and obligation between the contracting parties. Thus, once a renewed lease comes within the scope of Section 107 of the Transfer of Property Act, such a lease can be made only by registered instrument…

32…when renewal is effected by a bilateral process on fresh terms and conditions to be settled between the parties after the expiry of the original lease period, it creates a new lease creating fresh relationship between the parties and under such circumstances it requires registration of a deed for renewal of lease.

33. The extension of lease, however, can be made through an unilateral process,inasmuch as, such extension is made on the option of one of the parties to the lease, as the party on the other part had and/or has no option but to accept the option for renewal exercised by the said party and to extend the said lease as per the provisions contained in the original registered lease deed.”

 23. It is thus clear that a clause in the instrument of lease either for renewal or for extension of lease is its important term and therefore, it has to be clear and specific, so as to enable the Court to ascertain the same. In case of uncertainty or ambiguity in the terms and conditions of the lease, whether there is an option clause for renewal or extension of lease, has to be determined reading all other covenants of lease as also the other evidence on record, so as to determine the intention of the parties.

Procedure of Renewal

24. The renewal of a lease is a privilege and the same is required to be done within the time limited and in the stipulated manner as provided in the lease for the said purpose. In the celebrity case of Caltex (India) Ltd. v. Bhagwan Devi Marodia[21], the Supreme Court held as under:

“4. At common law stipulations as to time in a contract giving an option for renewal of a lease of land were considered to be of the essence of the contract even if they were not expressed to be so and were construed as conditions precedent. Equity followed the common law rule in respect of such contracts and did not regard the stipulation as to time as not of the essence of the bargain. As stated in Halsbury’s Laws of England, 3rd Edn., Vol. 3, Art. 281, p. 165 : “An option for the renewal of a lease, or for the purchase or re-purchase of property, must in all cases be exercised strictly within the time limited for the purpose, otherwise it will lapse.” This passage was quoted with approval by Danckwerts L. J. in Hare v. Nicoll[22]. A similar statement of law is to be found in Foa’s General Law of Landlord and Tenant, 8th Edn., Article 453, p. 310, and in Hill and Redman’s Law of Landlord and Tenant, 14th Edn., p. 54. The reason is that a renewal of a lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose.

  1. With regard to equitable relief against the failure of the tenant to give notice of renewal within the stipulated time, the law is accurately stated in Halsbury’s Laws of England, 3rd Edn., Vol. 23, p. 626, Article 1329, footnote (u) thus :”Relief will not be given in equity against failure to give notice in time, save under special circumstances. The decided cases show that in such cases relief is not given in equity save upon the ground of unavoidable accident, fraud, surprise, ignorance not wilful or inequitable conduct on the part of the lessor precluding him from refusing to give the renewal. The limits of the equitable interference in such cases were clearly stated by the Master of the Rolls (Sir R. P. Arden) in Eaton v. Lyon[23] . He observed:

“At law a covenant must be strictly and literally performed; in equity it must be really and substantially performed according to the true intent and meaning of the parties so far as circumstances will admit; but if unavoidable accident, if by fraud, by surprise or ignorance not wilful, parties may have been prevented from executing it literally, a Court of Equity, will interfere; and upon compensation being made, the party having done everything in his power, and being prevented by means, I have alluded to, will give relief … I decide this case upon the principles on which, Lord Thurlow decided (Bayley v. The Corporation of Leominster 1792, 1 Ves. 476), and I hope now, it will be known, that it is expected, these covenants shall be literally performed where it can be done; and that equity will interpose, and go beyond the stipulations of the covenant at law, only where a literal performance has been prevented by the means, 1 have mentioned, and no injury is done to the lessor.”

6. We are of the opinion that the stipulation as to time in Clause 3(c) of the indenture of lease dated February 17, 1954 should be regarded as of the essence of the contract. The appellant not having exercised the option of renewal within the time limited by the clause is not entitled to a renewal.”

25. This principle was reiterated by the Delhi High Court in its judgments titled as Frankfinn Aviation Services Pvt. Ltd. v. B.C. Gupta[24]; Punchip Associates P. Ltd. S. Rajdev Singh[25]; Jagdish Gupta v. The State Trading Corporation of India Ltd.[26]; and MGR Holding (P) Ltd. v Loil Overseas Foods Ltd.[27].

26. It, therefore, follows that if the original registered lease deed contained an option clause for renewal, it has to be exercised strictly in accordance with the terms thereof, to be followed by execution and registration of a fresh lease deed in accordance with Section 107 of TPA, failing which the lessee cannot claim renewal of the lease or to continue in possession of the premises as a lawful lessee. The lessee continuing in possession without actual renewal only becomes a tenant holding over under a month to month tenancy, determinable by a notice in accordance with Section 106 of TPA.


*Advocate and a qualified Chartered Accountant. Author is currently a Senior Associate in Dispute Resolution Practice at L&L Partners Law Offices, New Delhi. Author’s views are personal.

[1] Transfer of Property Act, 1882

[2] Registration Act, 1908

[3] 1906 SCC OnLine Cal 83

[4] 1952 SCR 269

[5] 1906 SCC OnLine Cal 83

[6] 1933 SCC OnLine Pat 55

[7] 20 IC 715

[8] 17 CLJ 167

[9] 1906 SCC OnLine Cal 83

[10] 1916 SCC OnLine Cal 39

[11] 2015 SCC OnLine Del 14507 

[12] (2016) 9 SCC 268

[13] 2018 SCC OnLine Del 8942

[14] 2019 SCC OnLine SC 592

[15] (1999) 4 SCC 450

[16] 1989 Supp (1) SCC 487

[17] (2004) 1 SCC 1

[18] 2005 SCC OnLine Del 898

[19] (2007) 5 SCC 614 

[20] 2007 SCC OnLine Cal 501

[21] (1969) 2 SCR 238

[22] [1966] 2 QB 130 

[23] 3 Ves. Jun. 690:30 E.R. 122

[24] 2007 (9) AD (Delhi) 449

[25] 2011 SCC OnLine Del 131 

[26] 2012 SCC OnLine Del 3315 

[27] 2015 SCC OnLine Del 11953

Case BriefsHigh Courts

Chhattisgarh High Court: Rajendra Chandra Singh Samant, J., while addressing a petition made an observation with regard to matrimonial disputes that,

“…in a matrimonial dispute, the cause of action can arise again and again, even if the dispute is settled and compromised before the court and the case has been withdrawn.”

Present matter pertained to the quashing of an order passed by the Family Court, Bilaspur in a Civil Suit.

Petitioners’ counsel submits that respondent had filed a civil suit under Section 9 of the Hindu Marriage Act, 1955 and during the pendency, it was placed before the National Lok Adalat and as the respondent did not want to press on the said proceedings, it was disposed of.

Respondent in the present matter has filed a repeat application under Section 9 of the Hindu Marriage Act. Petitioner challenged the maintainability of the civil suit under Order 7 Rule 11 read with Section 23 Rule 4 of CPC on the ground that the previous application filed by the respondent had been disposed of by award.

Order 23 Rule 4 of CPC specifically provides about the abandonment of a suit under sub-rule 1 without permission of Court.

Further, it has been submitted that Section 21 of the Legal Services Authorities Act, 1987 provides that any award passed in the Lok Adalat shall be final and binding on all the parties and no appeal shall lie to any court against the award, hence in view fo the said the repeat application filed by the respondent stands unsustainable.

Respondent’s Counsel submitted that since the petitioner did not honour the ut of court compromise, respondent was compelled to file an application under Section 9 of the HMA, 1955.

Bench on perusal of the submissions and facts stated that under Section 21 of the Legal Services Authorities Act, 1987, an award of Lok Adalat shall be deemed to be a decree of a civil court which includes the order on compromise or settlement between the parties before the Lok Adalat.

Court stated that Lok Adalat has no authority to exercise the power under Order 23 Rule 1 of CPC. The Lok Adalat on taking cognizance in any matter referred to it from a court, can act only in accordance with Section 20 sub-section 4, 5 & 6 of the Act, 1955 and there is no mention that the Lok Adalat can allow the withdrawal of the civil suit.

Hence the Lok Adalat’s order having lo legality is not an order at all.

“the case of the respondent against the petitioner was terminated on the basis of the statement made by the respondent side, that some agreement has taken place between the parties out of the court.”

Court added that, in a matrimonial dispute, the cause of action can arise again and again, even if the dispute is settled and compromised before the court and the case has been withdrawn.

Therefore,

When a dispute crops up again at any subsequent stage on account of differences between the parties to the matrimony, that would be a separate cause of action, on which the party aggrieved, has an entitlement to maintain legal proceeding under the provision of the Hindu Marriage Act, 1955.

In view of the above, the petition was dismissed. [Harsha Dewani v. Ashutosh Gupta, WP (227) No. 919 of 2019, decided on 10-08-2020]

Hot Off The PressNews

IT Department conducts serach on Chinese Entities premises

Based on the credible information that few Chinese individuals and their Indian associates were involved in money laundering and hawala transactions through series of shell entities, a search action was mounted at various premises of these Chinese entities, their close confederates and couple of bank employees.

Search action revealed that at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities, entering into credits of more than Rs 1,000 Crore over the period.

A subsidiary of Chinese company and its related concerns have taken over Rs 100 Crore bogus advances from shell entities for opening businesses of retail showrooms in India. Further, incriminating documents in respect of hawala transactions and laundering of money with the active involvement of bank employees and Chartered accountants has been found as a result of search action. Evidences of foreign hawala transactions involving Hongkong and US dollars have also been unearthed. Further investigations are under progress.


Ministry of Finance

[Press Release dt. 11-08-2020]

[Source: PIB]

Case BriefsCOVID 19District Court

District Court, Saket, Delhi: Raj Kumar Chauhan, J., directed “Miniso” to pay the rent arrears for the lockdown and post lockdown period stating that the company has no dearth of money as the company has been operating almost 10 similar premises on rent in Delhi successfully.

Lease

Allegations placed by the petitioners are that they had leased their property to respondent i.e. Miniso Life Style Private Limited.

Monthly Rent

Monthly rent of the leased out property was Rs 9,75,000/- plus GST per month and the same was to be paid in equal proportions to lessor 1, 2 and 3 as per the agreement signed between the parties.

Head of Business Development of Miniso i.e. respondent asked the petitioner to consider the waiver of rent for the time period of lockdown — April, 2020 to May, 2020.

Further, the petitioner informed the respondent that as per clause 12 of the agreement i.e. Force Majeure Clause was not applicable to the existing circumstances and respondent cannot take unjust and wrongful benefit of said clause.

Though the petitioners agreed to waive the penal interest on the delayed payment @18% p.a. but the respondent continued to threaten for creating third party interest in the demised premises.

Petitioners were represented by Counsels Gaganmeet Singh Sachdeva, Sumit Thakur and Counsel for the respondent was Akash Tyagi.

Legal Notice

Petitioners had to in view of the above circumstances send a legal notice for recovery of rent and arrears on 23-05-2020.

Later the respondent sent a proposal of paying 70% of the arrears of rent for the month of April and 90% of the rent for June and July, 2020.

Petitioners in good­faith and trust sent the invoices of the rent for the above stated months and requested the respondent to pay the payment after deducting 15% rebate for arrears of rent for April, May, alongwith rent of June and July.

Despite sharing the invoice the respondent did not clear the arrears of rent and stopped taking calls from the petitioners.

In view of the above circumstances, the present petition was filed.

Respondents contention was with regard to the maintainability of the petitions stating that Clause 12 of the Lease Deed provides eventualities wherein in case the demised Premises is, whether fully or partially, destroyed or damaged by any Act of God, such as by flood, earthquake, storm etc. save and except fire, becomes unfit for occupation or use, the rent payable by the respondent shall be suspended till such time as the Demised Premises is once again rendered fit for use and occupation by the respondent.

Counsel for the Petitioners relied upon the decision in, Sona Corporation India (P) Ltd. v. Ingram Micro India (P) Ltd., O.M.P (COMM.) 249/2018 and Ramanand v. Dr Girish Soni, R. C. Rev. No. 447 of 2017.

The above two cases were cited with respect to the contentions that Court under Section 9 of the Arbitration Act can direct the payment of rent due as well as future rent in the same manner as the Court can grant in a civil suit under Order 39 Rule 10 CPC.

Adding to the above, the latter case was relied upon to rebut the respondent’s claim for waiver of rent.

Decision

Bench on perusal of the referred provisions and sections of Arbitration Act and CPC held that the respondents are directed to pay admitted rent to the petitioner for the period which has not been paid for the leased premises alongwith future payment also be paid as per the lease deed.

Further, adding to its analysis of the facts, Court stated that on perusal of the force majeure clause in the agreement, it can be stated that the lessee is entitled to suspension of the rent only if the property has been damaged or destroyed by any force Majeure event.

Admittedly, the property in question has not been damaged/destroyed in force majeure event.

Hence, in view of the law laid down by Delhi High Court in the decision of Sona Corporation India (P) Ltd. v. Ingram Micro India (P) Ltd., O.M.P(COMM.) 249/2018 and Ramanand v. Dr Girish Soni, R. C. Rev. No. 447 of 2017, Court concluded its decision stating that,

“mere temporary non-use of the tenanted premises by the respondent and yet being in power and possession of the premises in view of the temporary lockdown due to the COVID-19 Pandemic, the said event cannot be covered under the force Majeure clause of the lease agreement.”

Therefore, the respondent cannot claim waiver of rent.

Hence the Court is empowered under Section 9 of the Arbitration Act to order payment of arrears of rent for the lockdown period and also post lockdown period.

In view of the above terms, petitions were disposed off. [Uma Sharma v. Miniso Life Style (P) Ltd., OMP (I) Comm No. 130 of 2020, decided on 06-08-2020]

Case BriefsHigh Courts

A very efficacious, substantive and procedural mechanism to facilitate the realisation of deserving and intrinsic value of encumbered estates and other immovable properties – within the annals of the Transfer of Property Act, 1882 — strangely appears very rarely to have been invoked in Courts, which impression is inevitable because the case law on it is scarce, if not, none.

— Kerala High Court

Kerala High Court: Devan Ramachandran, J., addressed matter surrounding Section 57 of the Transfer of Property Act, which has attracted very little or no reported Judgments in India.

Section 57 of the Transfer of Property Act, 1882 enables any party to the sale of immovable property burdened by an encumbrance, to apply to Court for a declaration that the said property is freed from such encumbrance on deposit of sums to be adjudged by it; and for the issuance of a conveyance order or vesting order, proper for giving effect to the sale.

Bench examined the above-stated Section of the TP Act vigilantly from both academic and practical ambit.

Purpose of Section 57 of the TP Act

Intended to assist any party to the sale of immovable property, which is subject to an encumbrance, to fructify the sale for its fair value after receiving in deposit — for payment to the incumbrancer — the capitalised value of the periodical charge, or capital sum charged on the property, together with incidental charges.

Thus, the said Section enables the parties to a sale to invoke the jurisdiction of the Court for the purpose of fulfilling their contracts, notwithstanding the encumbrances on the property.

Section 57 of TP affirmatively provides that on the application of a party to a sale, the Court may, if it thinks fit, direct or allow payment into Court.

This section is intended to facilitate sale out of court, as much as it is for sale by a court or in execution of a decree.

When can Section 57 of TP Act not be applied? | Golden Rule 

In the Madras High Court decision of  Mallikarjuna Sastri v. Narasimha Rao, (1901) ILR 24 Mad 412, held that the said Section,

cannot be applied when it comes to a charge or encumbrance already adjudicated by a court and which has become part of a decree or even in a case of adjustment of a decree out of court.

Facts of the Case

Appellant and Respondents are siblings and their father’s property was partitioned in the year 1980, through a partition deed.

Partition Deed consisted of a covenant that both he and his brother must pay Rs 500 each to their sister within a year, failing which she can recover it, for which the said amounts would stand charged on the respective properties.

Contentions

The Sister, who is also the first respondent in the present matter refused to accept the stated amount when offered by the appellant, due to which he is still obligated and burdened with the same.

Appellant due the stated obligation has been unable to execute the sale deed and in view of the circumstances, he approached the District Court under Section 57 of the TP Act volunteering to deposit the amount of Rs 500 in favour of the first respondent in order to obtain the declaration that the property is free from any encumbrance.

Though, the above-stated application to the District Court was dismissed on grounds of maintainability.

By the present appeal, the appellant has assailed the District Court’s Order.

Developments in the present appeal

Bench in an earlier order had directed the first respondent to file an affidavit stating that she is unwilling to take the money from the appellant with reasons.

The first respondent filed the affidavit stating that she is unwilling to take the said amount but the reasons placed by her were that due to personal issues with appellant along with the said amount not being offered within the stipulated time as stated in the Partition Deed she refused the said amount.

Counsels for Appellant and First Respondent are P. Thomas Geeverghese and Shiju Varghese, respectively.

Decision

On perusal of the facts and circumstances of the matter, Court stated that when the amount of Rs 500 alone stands charged on the property as a capital sum, without any further obligation on the appellant towards interests or other incidental expenses, it is irrefragible that if the appellant pays it to the first respondent or deposits it in the Court, the said encumbrance would stand extinguished.

In the affidavit filed by the first respondent, she only asserted that her refusal for the payment is for personal reasons.

Looking at the above stated, Court determined whether the appellant was justified in invoking Section 57 of the TP Act or not?

Bench stated that in light of the circumstances of the present case, there can be little divergence that the provisions of Section 57 of the TP Act would come to play.

Court noted that the first respondent only says that ‘her conscience is not willing to accept the money’ without showing any cause against its tender or deposit by the appellant.

Hence, in view of the above circumstances, Court finds the decision of District Court erring, since the appellant has clearly averred that he intends to sell his property as per the sale agreement submitted by him.

Since the first respondent failed to show any legally acceptable cause, the appellant is entitled to a declaration under Section 57 of the TP Act.

Therefore, the District Court’s decision is set aside and the appeal is allowed while permitting the appellant to tender the amount of Rs 500 to the first respondent by depositing it in the District Court.

In view of the above, the property will stand free from any charge, created by the Partition Deed. [M.P. Varghese v. Annamma Yacob, MFA No. 47 of 2020, decided on 05-08-2020]

Case BriefsHigh Courts

Delhi High Court: Prathiba M. Singh, J., noted that Delhi University has now launched an online portal through which the students can obtain their digital degree certificates.

The above information came after a series of hearings in the matter.

Petitioners’ grievance was that they wished to pursue their post graduate medical education in USA and for the said purpose they required their degree certificates, however the same were not issued by Delhi University on the ground that the contract with printer had expired.

Court on 23-07-2020 had directed DU to come up with a protocol for issuance of digital degree certificates. On 4th August, Court appointed a committee for the said purpose.

The committee submitted a sample digital degree certificate and on perusal of the Court is satisfied.

Further, the Court added that the digital degree certificates are duly verified by two officials of the DU and digitally signed by the Authorised Officer of the DU, hence the same would satisfy the petitioners’ purpose.

Bench directed that the digital degree certificates for all the petitioners shall be issued by e-mail on or before 13-08-2020.

Adding to the above, Court noted that DU has now activated the online portal for issuance of digital degree certificates being www.digicerti.du.ac.in, wherein the students have to register themselves and give their details including their academic qualification, name of their college, etc. Upon the same being completed by the students, the digital degree certificates for the students shall be issued within a maximum period of one week, after completing the verification, etc.

Court also directed MEITY/Digilocker and DU to file an affidavit regarding what steps have been taken to ensure that the data is made available to students through DigiLocker.

Another aspect to be looked into by DU is whether mark sheets and transcripts of students can also be issued digitally.

Matter to be listed on 07-09-2020. [Dhritiman Ray v. University of Delhi, WP (C) No. 3945 of 2020, decided on 07-08-2020]


Also Read:

Del HC | “No reason why DU should not adopt technically advanced methods”; Court suggests DU to issue degree certificates online through email

Del HC | Obtaining a degree should have been a cause of celebration, but turned into a nightmare; Court constitutes committee to finalise the process of issuing digital degree certificates to DU students

Legislation UpdatesNotifications

Jute Advisory Board –Abolished

In consonance with the Government of India vision of “Minimum Government and Maximum Governance”, a leaner Government Machinery and the need for systematic rationalization of Government bodies, the Government of India has abolished Jute Advisory Board (JAB) with effect from the date of publication of this Notification in the Gazette of India.

*Read the notification, here: NOTIFICATION


Ministry of Textiles

[Notification dt. 04-08-2020]

COVID 19Hot Off The PressNews

In view of the rapid surge in the number of active Corona Virus cases in Prayagraj and Lucknow, Chief Justice directs that there shall be no sitting of Courts on 12th, 13th and 14th of August, 2020 in the High Court of Judicature at Allahabad.

On the aforementioned dates, only urgent matters mentioned before the Chief Justice and Senior Judge at Lucknow, respectively, shall be taken and no other Court shall be having sitting.

There shall be no physical/e-filing on 12th, 13th, 14th, 15th and 16th August, 2020.

Read the Order, here: ORDER


Allahabad High Court

[Order dt. 09-08-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Green Tribunal (NGT): The Coram of Justice Adarsh Kumar Goel (Chairperson) and Justice S.P. Wangdi (Judicial Member) and Dr Nagin Nanda (Expert Member), while addressing a matter reiterated that,

There is no absolute right to extract groundwater for commercial purposes. If anyone is found extracting groundwater, it is per se a criminal offence under the Environment (Protection) Act, 1986.

Illegal Extraction of Groundwater

Tribunal sought a report from the State Pollution Control Board with regard to the allegation of illegal extraction of groundwater and discharge of polluted water with dyes and chemicals into the drain by the National Wollen and finishers.

State PCB filed a report wherein it was noted that Regional Director, CGWB, Chandigarh was directed to take action and levy environmental compensation on National Wollen and Finishers for extracting underground water without CGWA permission, as per the report of CPCB in-house Committee on Methodology of assessing Environmental Compensation and Action Plan for its utilization of Fund Assessed.

Further, the report also stated that the consent to establish under the Water Act and Air Act was granted on 03-09-2012.

In the Tribunal’s decision of Shailesh Singh v. Hotel Holiday Regency, OA No. 176 of 2015, it was held that,

“…groundwater extraction has to be regulated having regard to the safety of level of groundwater so that water bodies and e-flow of rivers is not affected.”

There is no absolute right to extract ground water for commercial purpose. If anyone is found extracting ground water, it is per se a criminal offence under the Environment (Protection) Act, 1986.

Hence, the tribunal held that National Wollen and Finishers has been found to be extracting groundwater, therefore, State PCB must stop such extraction by coercive means and recover compensation for such illegal drawal for the period for which such drawal took place up to five years from the date of filing of the application before this Tribunal.

Adding to its decision, the tribunal also stated that, there is also a violation of Consent terms under the Water and Air Acts which can certainly be enforced by the PCB, in view of the failure of CGWB to take action.

In view of the above, the application was disposed of. [Raj Kumar Singal v. State of Haryana, OA No. 722 of 2019, decided on 05-08-2020]

Case BriefsCOVID 19High Courts

Bombay High Court: A Division Bench of S.J. Kathawalla and R.I. Chagla, JJ., quashed and set aside the unreasonable restriction placed by the State of Maharashtra on prohibiting the actors, crew members, etc. who are above the age of 65 years from being present at the site of the shooting of films/television series/Over The Top Media (OTT) in light of the same being discriminatory.

Petitioner is an actor by profession who had challenged the condition imposed by the Government of Maharashtra’s Resolution according to which persons above the age of 65 years are prohibited from remaining present at the site of the shooting of films/television series/Over The Top Media (OTT).

Discriminatory and Arbitrary

The government resolution is discriminatory, arbitrary and violative of Article 14 of the Constitution of India because at the time the same was issued, Central, as well as the Maharashtra Government, had relaxed the general prohibition on the movement of persons above the age of 65 years.

Right to Carry on Trade and Occupation

As against this, a prohibition on the movement of persons above the age of 65 years continued to operate in the film and television industry. It is also submitted that the impugned condition is an unreasonable restriction on the petitioners’ right to carry on their trade and occupation, as also the impugned condition deprives the petitioner of his right to earn a livelihood with dignity.

Government Pleader for the Respondent State, Purnima H. Kantharia submitted that the Government of Maharashtra’s Resolution is based on Centres’ order passed under the DM Act.

Further, he added that, the restrictions are in the interest of persons with low or weak immunity as the disease is easily communicable.

The restriction is not absolute. Persons above the age of 65 years may work from home, over video conferencing, email, video sharing etc.

Until the Central and State Governments relax the guidelines, the Respondent is bound to strictly implement the aforesaid Orders issued under the DM Act, as the MHA Orders specifically provide for strict enforcement of the Lockdown Orders by the respective State Governments.

“…though the Impugned Condition reads as a prohibition, no coercive action will be taken against anyone above the age of 65 years who chooses to remain present at the site of the shooting of films/television series / OTT. The prohibition is issued in the interest of the health and safety of persons who are above the age of 65 years and is to be read as such.”

Analysis and Decision

Bench while analysing the facts and circumstances of the case, started while stating that Sections 38 and 39 of the DM Act empower the State Government to take measures to deal with the disaster at hand, which in this case is the Covid-19 pandemic.

Keeping the above in mind and being fully conscious of the hardship and risks posed by the Covid-19 pandemic, Court first considered the challenge to the impugned condition under Article 14 of the Constitution of India.

Intelligible Differentia

In Court’s opinion, impugned condition was not based on any intelligible differentia.

Whilst there may be a nexus with the object sought to be achieved, i.e. to protect vulnerable people from the Covid-19 pandemic, there is no intelligible differentia between persons who are 65 years of age or above in the cast/crew of films and TV shootings on the one hand and persons who are 65 years of age or above in other sectors and services, permitted under prevailing lockdown orders.

Thus, there is discrimination in the disparate treatment of persons who are 65 years of age or above in the film or television industry and in the other permitted sectors and permitted activities and no explanation on the said aspect has been given by the State Government.

Hence, Impugned Condition, therefore, cannot be sustained in view of the well-settled principles enunciated under Article 14 of the Constitution of India.

Further, the said impugned condition also failed to take into consideration the relevant material, namely the relaxation contained in orders dated 30th May 2020 and 31st May 2020 issued by MHA and the Government of Maharashtra respectively, which reads as an advisory for persons above the age of 65 years.

Impugned Condition in light of Article 21 of the Constitution

Citing the decision of Olga Tellis v. Bombay Municipal Corpn., (1985) 3 SCC 545, it was stated that the Righto Earn a livelihood and the Right to Live with Dignity are well-established facets of the Right to Life guaranteed under Article 21 of the Constitution.

Court added that coming to the conclusion that the impugned condition cannot be sustained on account of it being discriminatory and arbitrary, stated 

“we are satisfied that the absolute prohibition as regards persons above the age of 65 years who earn their livelihood from the film industry (which is allowed to operate), is a measure that violates the Petitioner’s right to live with dignity under Article 21 of the Constitution and the restriction imposed by the Impugned Condition in relation to a specific sector or industry that is now allowed to operate, cannot constitute a valid procedure established by law.”

Hence, on perusal of the above observations, the Court held that if there are no general prohibitions on persons above the age of 65 years from working or practicing their trade in those sectors and businesses which are allowed to operate, an age-based prohibition in only one industry namely the film industry/television / OTT, without any material to support its differential classification, would constitute an unreasonable restriction.

The stated impugned condition was quashed and set aside in view of being an unreasonable restriction. [Pramod Pandey v. State of Maharashtra, Ad-Hoc No. WP-LD-VC-178 of 2020, decided on 07-08-2020]


Also Read:

Bom HC | How a physically fit person of 65 years age or above is expected to live a dignified life if not allowed to go out & earn livelihood? Maharashtra Govt to respond

Case BriefsHigh Courts

Bombay High Court: A Division Bench of Dipankar Datta, CJ, and A.S. Gadkari, JJ., deferred the hearing for PIL’s filed in view of the unnatural death of Sushant Singh Rajput, a film actor.

In the present two Public Interest Litigations, it has been sought that CBI should be entrusted with the investigation into the unnatural death of a film actor, Sushant Singh Rajput.

Advocate General for the State, A.A. Kumbhakoni informed the Court that a petition with similar relief was moved before the Supreme Court, but the same was dismissed.

The petitioner on being asked for the copy of the petition stated answered in negative and added that the Supreme Court while dismissing the petition granted liberty to approach this Court.

Another significant point that the Court noted was the Supreme Court’s order dated 5-08-2020 wherein a status report has been called for from the State of Maharashtra in regard to the stage of investigation by Mumbai Police.

Hence, the Advocate General for the State states that the Court may not pass any order on the present petition and may await the Supreme Court’s decision.

Additional Solicitor General, Anil Singh submitted that on acceptance of the request of the deceased father, the CBI has already registered an FIR, inter alia, under Section 306 of the Penal Code, 1860. He has also questioned the approach of the Mumbai Police in quarantining an IPS officer of the Bihar cadre, who had come to Mumbai for the purpose of ascertaining facts, although four other officers of Bihar Police who had earlier visited Mumbai were not meted out such treatment.

Hence in view of the above stated, Court while deferring the hearing till 21-08-2020, stated that CBI has registered an FIR and it would not be appropriate, at this stage, to express any opinion either way.

It would be just and proper to await the orders of the Supreme Court in the pending Transfer Petition, referred to above. [Priyanka Tibrewal v. UOI, PIL-CJ-LD-VC- No. 37 of 2020, decided on 07-08-2020]


Also Read:

Sushant Singh Rajput death case| SC asks Mumbai Police to submit status of investigation so far; says truth must come out

Case BriefsHigh Courts

Bombay High Court: A Division Bench of S.S. Shinde and M.S. Karnik, JJ., partly allowed an appeal by reducing the sentence of the accused in light of the sentencing policy.

In the present matter, the lower Court’s decision was challenged.

Appellant faced trial for alleged commission of the offences punishable under Sections 307 along with 341 of the Penal Code, 1860.

Prosecution Version

Victim used to reside with her brothers at her maternal uncle’s house and worked as a babysitter. Appellant-Accused and the victim were residing in the same area and eventually from acquaintance they turned into lovers.

Victim’s uncle objected the affair, after which the victim stopped meeting the appellant-accused. Later, she expressed her clear refusal to continue the relationship.

On victim’s refusal, appellant-accused kept threatening her and on one occasion he had beaten her up too as he wanted her to marry him.

Day of the incident

Appellant- accused suddenly entered the rickshaw in which the victim was seated. The victim was pulled out of the rickshaw. The appellant-accused threatened the rickshaw driver and forced him to leave. The appellant-accused assaulted the victim with his fists and pulled her to the footpath.

On her refusal, the appellant-accused took out a knife from the right side pocket of his pant and inflicted injuries on her neck.

At that time, one police vehicle arrived. The appellant-accused ran away from the spot. The victim was taken to the hospital and on the basis of her statement, the offences under Section 307 and 341 of the IPC came to be registered.

Submissions

Appellant-accused’s counsel submitted that the cardinal principle of sentencing policy is that the sentence imposed on the offender should reflect the crime he has committed and it should be proportionate to the gravity of the offence.

APP on behalf of the respondent-State submitted that the sentence imposed by the trial Court in the facts and circumstances of this case cannot be said to be unjustified. In support of his submission that the appellant-accused deserves no leniency, he relied on the Supreme Court’s decision in State of M.P. v. Kashiram, (2009) 4 SCC 26.

Decision

In view of the facts and circumstances of the case, bench stated that it would be profitable to refer to the decision of the Supreme Court in State of Punjab v. Bawa Singh, (2015) 3 SCC 441, in the context of duty of the Court to award proper sentence, wherein the following was stated:

“16. ………… undue sympathy to impose inadequate sentence would do more harm to the justice system to undermine the public confidence in the efficacy of law. It is the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed.”

In the present case, Court opined that the sentence imposed by the trial court required to be reduced.

The aggravating and mitigating factors and circumstances in which a crime has been committed are to be delicately balanced on the basis of really relevant circumstances in a dispassionate manner by the Court.

Court stated that in view of the dicta of the Supreme Court, “we are conscious of the social impact of the crime against women cannot be lost sight of and per se require exemplary treatment.”

Hence, considering the totality of circumstances, the imposition of sentence of imprisonment for life by the trial court appears to be harsh and hence the same needs to be reduced by maintaining the conviction.

Therefore, sentence of 10 years would meet the ends of justice. [Arumugum Arundatiyar v. State of Maharashtra, Criminal Appeal No. 1070 of 2015, decided on 05-08-2020]

Hot Off The PressNews

Delhi High Court: Prathiba M. Singh, J. has upheld the Delhi University’s (DU) decision to conduct open-book examinations (OBE) for final year undergraduate students, set to start from the 10th of August, 2020.

The Court was hearing a plea filed by multiple students of the University, which sought to challenge the university’s decision to conduct OBEs, contending that it would be discriminatory for students who did not have internet, books and/or other resources for preparing for the exam or were stuck in Covid-19 containment zones. Moreover, the ability and preparedness of the University to conduct the exams, especially in light of the possibility of various technical problems, had been questioned. The University argued that conducting OBEs was in accordance with the UGC’s guidelines to conduct exams in a time-bound manner, and students would only require basic technology to appear for the examination. It contended that holding OBEs was to prevent students from assembling in one hall, intended at preventing the spread of Covid-19.

The High Court ruled in favour of DU, allowing it to conduct the OBEs from the 10th of August, 2020. However, the Court also issued several guidelines which the University would have to follow in conducting the examinations, such as uploading question papers on a portal and emailing them to students individually, giving students an extra hour to upload their answer sheet, sending auto-generated email to each student to confirm the receipt of the answer sheet by the University, etc. The Court observed that a Grievance Redressal Committee would have to be formed by the DU to resolve issues being faced by students, Common Service Centres would be made available for students with no cyber infrastructure, and students who fail to appear in the OBEs would have the option to appear in physical examinations in September; all of these would serve as safeguards for the students.


Source: Hindustan Times

New releasesNews

Consumer Claims by Akanksha Rana

Overview:

Akanksha Rana’s Consumer Claims is part of EBC’s LAYMAN SERIES and is written for the consumer and to empower them in a way that they can gain awareness of their rights and how to get these rights enforced through appropriate forums. This book explains the purpose and provisions of the latest Consumer Act, 2019 in a simple and lucid manner.

The book starts with explaining the definition and concept of the consumer as per the Indian laws and goes on to explain the rights of a consumer. A chapter has been dedicated to Ombudsman services available for consumers, offered by some service/product sectors like banking, telecommunications, etc. The complete legal process has been explained in detail, starting from the definition of the complainant and understanding the claim, to structure and jurisdiction of consumer forums, and culminating in appeals and enforcement of the final order and beyond.

Chapters dealing with established consumer rights are included with “legal consumer cases” to illustrate the legal points. This is also aimed at “empowering” consumers by connecting them to local and governmental forums and to other consumers with similar problems. The book includes step-by-step guides to file complaints which the reader can use to file his/her complaint correctly. Web links to model formats for filing complaints have been added for reference.

This book includes a companion web resource EBC ExplorerTM (www.ebcexplorer.com), powered by SCC Online providing access to important cases, indicated by the Case PilotTM. Find articles and important links on consumer laws, updates, a discussion forum and a host of free learning resources on EBC ExplorerTM.

Table Of Contents:

Table of Cases

Introduction

Consumer and Its Protection

Ombudsman

Rights of a Consumer

Initiating Legal Action

Outcome of the Legal Action

Online Shopping

Education Services

Insurance Services

Housing Services

Medical Services

Food Products

Transportation Services

Responsibilities of a Consumer

Annexure

Subject Index


Here’s the link to get your copy — CONSUMER CLAIMS

Case BriefsCOVID 19High Courts

Allahabad High Court: A Division Bench of Siddhartha Varma and Ajit Kumar, JJ., while addressing the matter observed that the following rule, “Two individuals should remain two yards away and wear masks” seems to be an empty shibboleth coined by the Government.

Court furthering its observations stated that, neither the government is looking interested in implementing the above rule nor the people of Uttar Pradesh are interested in following the said rule.

Shops are surrounded by people without complying the norm of social distancing of two yards.

Advocate, Ram Kaushik, brought certain photographs on record from which it is certain that Unlock-1, 2 and 3 have been misunderstood by the people of Uttar Pradesh.

Either the people have not been told to maintain social distancing or they have chosen to flagrantly violate the principle of maintaining social distance.

Shopkeepers will have to be told that crowding at their shop would be of no help and even may invite coercive measures against them.

Hence, police along with the District Administration will have to see that people who crowd at shops should queue up with a distance of two yards in between two individuals.

“Nagar Nigam Administration is not only proceeding at a snail’s pace but it has mostly remained a passive spectator of the encroachment activities in various parts of the city.”

Also it can be then expected for social distancing norms to be followed in letter and spirit, if such unathorised encroachers are permitted to carry out commercial activities in every nook and corner of the city.

Further, Government is coming up with various data to show that things are under its control but newspaper reports are not very encouraging. There are complaints that people, though have been tested for COVID-19 but have not yet received their reports even after a lapse of two or more weeks.

Chief Medical Officer has been directed to file an affidavit stating the pending COVID-19 reports already tested and reports received and delivered date-wise from 20th July, 2020 till 5th August, 2020.

Bench also added to its observations that, the rule of maintaining 2 yards distance has to go on till the time there is either a cure of the Corona Virus or there is a vaccine for the general public.

Court issued the following directions:

  • State Authorities to see vigorously that no two individuals in public remain within a distance of two yards from each other.
  • If any public place is found where people fail to maintain distance of two yards from each other then the owner of the premises, where the violation of this Rule is found, should be brought to book and the premises should be closed down.
  • If policemen etc. are not enforcing rules of distancing then action should be taken against them.
  • If there is crowding seen at O.P.D’s of hospitals, Nursing Homes and Clinics then action must be taken against them.
  • If within an hour of the starting of the functioning judicial institutions, it is found that crowding is happening and physical distancing is not being maintained by individuals on whose shoulders the judicial institutions function then the Bar Association, the Registry and the District Administration should step in and see that proper physical distancing is maintained.
  • Administration to remove all encroachments within the time limit as was provided to the Nagar Nigam by the Court at an earlier date.
  • No pillion riders except couple on two wheelers are to be seated unless there is an extreme urgency.

Matter to be listed on 07-08-2020. [Inhuman Condition at Quarantine Centers and for Providing Better Treatment to Corona Positive v. State Of U.P., PIL No. 574 of 2020, decided on 05-08-2020]

Case BriefsHigh Courts

Calcutta High Court: A Division Bench of Bibek Chaudhari and Soumen Sen, JJ., addressed an matter wherein a reporter published a story on witnessing the police personnel bribing a truck driver and further driving negligent get hold of the truck resulting in death of a person.

Petitioner a reporter of ETV Bharat made a news report stating, inter alia that some police personnel were collecting bribe from a truck loaded with sand and while chasing the truck, the vehicle owned by police department was being driven in rash and negligent manner.

Result of the rash and negligent driving caused the death of a person.

Above was the prima facie reason of lodging a complaint against the petitioner.

Bench on perusal of the materials on record stated that, it is a fundamental right of a press reporter to publish any news, which may not be palatable to the administration.

In order to stifle and muzzle the voice of the reporter this case has been registered against the petitioner.

Court also noted the fact that the police have taken cognizance of the report which prima facie discloses the offences committed by its own personnel.

Hence, in view of the above, Police Superintendent of the District concerned has been directed to initiate enquiry regarding registration of the FIR against the ETV reporter and to investigate about the collection of money by the police personnel, the incident of which has been published by the reporter and to take appropriate action against the offenders.

Therefore, petitioner shall be release on bail. [Avishek Dutta Roy, In Re., CRM No. 4952 of 2020, decided on 30-07-2020]

Appointments & TransfersNews

Appointment of Judges

President appoints Justice Abhijit Gangopadhyay, Additional Judge of the Calcutta High Court, to be a Judge of the Calcutta High Court and Justice Jyotsna Rewal Dua, Additional Judge of the Himachal Pradesh High Court, to be a Judge of the Himachal Pradesh High Court.

 


[Notification dt. 27-07-2020]

Ministry of Law and Justice

Case BriefsCOVID 19Tribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): Bimal Julka, Chief Information Commissioner, noted that the RTI application seeking very pertinent information with regard to COVID-19 pandemic was shuttled between one public authority to another and held that the Ministry of Health and Family Welfare shall collate all the information and furnish the same to complainant and on its’ website.

Complainant sought records by way of his RTI application on the following points:

  • Date when the Government of India first received information on the coronavirus/Wuhan virus/ virus affecting China.
  • Whether any communication was received by the Government of India about a possible pandemic like situation in India between the period of November 2019 to March, 2020?
  • Copy of the minutes of meeting that took place into the possibility of declaring coronavirus a health emergency or not between the period of March 5th to March 14th, 2020.
  • Whether the Government of India/any of its ministries or departments had received warnings/alerts/communication from the World Health Organisation on the possibility of coronavirus affecting India?
  • Whether any internal reports on a possibility of a pandemic like situation arising in India was communicated within the Ministry or its departments?
  • Any intelligence information on the coronavirus diseases originating from China possibly affecting India in future?
  • Whether the Government of India/this Ministry or its various departments sought China’s assistance in getting the sample of Virus?
  • Was China requested to share virus genetic sequence?
  • On which date did ministry of health first communicated the information of Virus possibly affecting India to PMO?
  • When was the issue of inadequate PPE discussed in the Ministry?
  • Whether additional funds were sought on fight against the virus. If so the date on which the first request and subsequent requests were made and to whom be furnished?
  • Whether the Ministry proposed a ban on incoming Chinese citizens to India?
  • Whether the ICMR received any reports/communications/internal warnings/memos/internal reports during the period of November 2019 to March 2020 about the possibility of a pandemic like situation in India due to the virus: To this ICMR responded that all the information pertaining to circulars, notifications, etc, is available on the ICMR website.
  • Whether the Government of India/this Ministry or its various departments was monitoring the situation in China and its possible effects on India?

To almost all the above queries, ICMR responded with a standard response — Not pertains to ICMR.

Complainant remained dissatisfied with the respondent’s response.

RTI Act

Commission observed that a voluntary disclosure of all information that ought to be displayed in the public domain should be the rule and members of public who having to seek information should be an exception.

Another significant observation was that, an open government, which is the cherished objective of the RTI Act, can be realised only if all public offices comply with proactive disclosure norms.

Accountability

Several decisions are being made by the Governments involving huge interventions in the healthcare impacting daily lives of billions of people, hence it is essential that the decisions are thoroughly documented in order for the Government to remain accountable.

Information pertaining to COVID-19

Complainant sought very pertinent information with regard to COVID-19 situation, which could not be made available by the Ministry of Health and Family Welfare.

Commission held that authentic, verified and cogent reply based on factual information needs to be furnished to the complainant as also disclose on the Public Authority website for the benefit of public at large.

Secretary, Health & Family Welfare was advised to have this matter examined at an appropriate level and the Nodal Authority so notified should furnish all the details sought by the Complainant in a clear, cogent and precise manner within a period of 30 days.

In view of the above complaints were disposed. [Saurav Das v. CPIO, CIC/ICOMR/C/2020/672284-BJ+CIC/MOHFW/C/2020/675866-BJ, decided on 23-07-2020]

Op EdsOP. ED.

Anomalies in law and justice – that is, the inconsistencies, contradictions or absurdities in law and justice – abound in our laws and in our judicial decisions.  Some anomalies cannot be corrected due to inherent limitations. Some of them, though not capable of being corrected, can be explained with reference to legal or moral principles. Luckily, many of the anomalies are rectifiable.  But, unfortunately, many anomalies are not noticed, or if noticed, not corrected; and even when corrected, may give rise to further anomalies.  Such anomalies have a bearing on rendering of justice and when left un-rectified, undermine the rule of law.  They create confusion in the minds of the public, lawyers and Judges and complicate the judicial process.  In extreme cases, they lead to an unwarranted and uncharitable description of law as an ‘ass’[1]. They also lead to despair and dissatisfaction among the litigants, in turn affecting the credibility of the judiciary. 

1. Anomalies occur mainly due to three reasons – (i) omissions and commissions of the legislatures and the judiciary; (ii) the existing difference between concepts of morality and concepts of law which are moulded by political, economic and social necessities; and (iii) inherent limitations of the legal system.  Some of the frequently encountered anomalies in the field of law and justice are:

Anomalies attributable to legislature:

(1) Anomalies arising by reason of failure to review and revise statutes periodically taking note of the effect of inflation.

(2) Anomalies arising by reason of legislature’s failure to improve/update laws by taking note of the changing needs of the society.

(3) Anomalies arising out of defective drafting of statutes.

(4) Anomalies arising out of separate adjudications under civil and criminal laws in respect of a common cause. 

Anomalies attributable to judiciary:

(5) Anomalies arising out of personal philosophies and idiosyncrasies of Judges.

(6) Anomalies arising out of erroneous judicial interpretation of statutes.

(7) Anomalies arising from judgments per incuriam.

(8) Anomalies arising from the orders made ‘for doing complete justice’.

(9) Anomalies arising from ipse dixit orders in PILs.

(10) Anomalies arising from discretionary non-adjudicatory directions. 

Anomalies inherent in rule of law, not capable of effective correction:

(11) Anomalies arising out of inherent difference between justice according to law and justice according to morality.

(12) Anomalies arising out of generality of law.

(13) Anomalies arising from application of different scales for rich, powerful and well-connected & poor, weak and lacking in influence.

2. Anomalies (1) to (4) require to be addressed by the respective legislature which made the law.  Anomalies (5) to (10) require to be addressed by the judiciary.  Anomalies (11) to (13) are natural consequences of rule of law in regard to which effective correction would be difficult, if not impossible.   

3. This article attempts to explain each of the aforesaid anomalies and identify the solutions for rectification wherever possible.    

I — Anomalies arising by reason of failure to review and revise statutes periodically taking note of effect of inflation

4. Whenever a law specifies a fee, fine, penalty or other charge, it has to be periodically revised by the legislature by taking note of the effect of inflation.  When the legislatures fail to do so, they lead to anomalies. What was a perfectly reasonable and logical provision of law when enacted, may, with passage of time, become either irrelevant or absurd or meaningless.  Much worse, they may become unreasonable or unfair or cease to serve the purpose for which they were enacted. 

5. An illustration of the failure to take note of the effect of inflation is the glaring omission by Parliament to periodically review and revise the provisions of the Penal Code, 1860 (“the Penal Code” for short) relating to fines leviable which is one of the modes of punishments under it (the other modes of punishments being death, imprisonment for life, rigorous or simple imprisonment for a specified period and forfeiture of property).  Levy of fine is either a punishment by itself or is a punishment in addition to or as an alternative to imprisonment. Levy of fine, apart from being a punishment for the offence committed, is also intended to be a deterrent against commission of similar offences.

6. When the Penal Code came into force in the year 1860, the amount specified by way of fine as an alternative to imprisonment was intended to be a severe deterrent against similar future crimes, which in its effect was equivalent to the punishment of imprisonment. By way of illustration, reference can be made to Sections 274 and 275 of the Penal Code which provides for a punishment of imprisonment (of either description) for a term which may extend to six months or with a fine extending up to Rs 1000 or with both, to any person who adulterates drugs or sells adulterated drugs.  Similarly, a person who causes grievous hurt by any rash and negligent act is punishable with imprisonment of either description for a term which may extend to two years or with fine which may extend to Rs 1000 or with both (vide Section 338 of the Penal Code).[2]

7. Where the fine is specified as an alternative to imprisonment, the object is that the fine should be a punishment effect of which is comparable to the effect of imprisonment for the specified period and commensurate with the gravity of the offence so that the levy of fine acts as much a deterrent as imprisonment, to future wrong-doers.  In many cases, where fine is specified as an alternative to imprisonment, courts tend to impose the punishment of fine instead of imprisonment, when the accused is found guilty. When the fine leviable is small or negligible (say, Rs 1000 or Rs 2000) and such fine is levied as punishment for the offence as an alternative to imprisonment for a period varying from six months to two years, it neither makes sense as a punishment, nor acts as a deterrent against future offences. 

8. From the year 1860, the value of money has been steadily decreasing on account of inflation.  After more than a century-and-a-half, the present day value or worth of Rs 1000 bears no comparison to the value/worth of Rs 1000 in the year 1860.  The difference in value can be effectively brought out by referring to the purchasing power of money then and now. A bag of rice which would have costed a few rupees (far less than Rs 10) in 1860, costs around Rs 4000 now.  A gram of gold which used to cost a few rupees in the year 1860, now costs around Rs 3500 per gram. A rupee then (in 1860), even by a very modest estimate and comparison, was a thousand times more valuable than it is now.  If an offender was punished with a fine of Rs 1000 in the year 1860, for the same offence, an offender should now be punished with a fine of Rs 10,00,000.   When the provision for fines was made in 1860, the fine amount was so high as to be an effective alternative punishment, and many offenders could not afford to pay the same and consequently underwent imprisonment.  In several cases, the amount of fine was sufficient to provide a reasonable recompense to the victim or victim’s family.  Thus, when the Penal Code was brought into force one- and- a- half centuries ago, the fine that was levied was intended to be an adequate punishment for the crime and/or an adequate deterrent against a future crime. But, as the value of money decreased over the years, the deterrent effect of the fine amount fixed in 1860 also decreased gradually and virtually become nil today.  Is it not absurd that a person who is found guilty of causing grievous hurt by his rash and negligence, or a person found guilty of adulterating or a person selling adulterated drugs who had to pay a fine of Rs 1000 in the year 1860 (today’s equivalent of which is not less than Rs 10,00,000) could get away now in the year 2019, by paying only a fine of Rs1000?  What is Rs 1000 in the present day – the cost of a breakfast for the offender in a luxury restaurant?  Can such absurdly low fine provide a reasonable recompense to the victim? Can it have any deterrent effect on the wrong-doer? If the intention of the State was to levy a fine of Rs 1000 in 1860, and now after more than one- and- half centuries, if the same fine is levied, it is as good as letting off the offender. The failure on the part of the legislature to periodically review and revise the quantum of fine or to link the amount of fine to an index/formula to take note of inflation, has the following adverse effects:

(a) Encourages crime as fine has ceased to be an adequate punishment for an offence or a deterrent against future offences.

(b) Makes a mockery of the law in question.

(c) Compels courts to impose the punishment of imprisonment instead of imposing the absurdly low fine, leading to overcrowding of prisons.

(d) Depletes a valuable source of funds to the State, which would have been available for effectively compensating the victims and meeting the increasing cost of maintaining courts. 

To achieve the object of the enactment, the prescribed fine for such offence should logically be at least a few lakhs of rupees, taking note of the effect of inflation after sixteen decades.

9. In its 156th Report (1997)[3], the Law Commission of India took cognizance of the position that fines prescribed in 1860 have lost their relevance, impact and deterrent effect in the present day;  that the quantum of fine should be increased so that the fines have a correlation to the economic structure of the society; and that victims of crime should be compensated by way of reparation.   

10. A revamp of the sentencing protocol under the Penal Code can effectively improve the criminal law administration, bring down crime and render justice to the victims of crimes.  Why are we waiting?  Why continue with the absurdly low fines unrelated to the gravity of the crime which neither has a punishment element nor a deterrent effect?  Why continue with the archaic system of sending offenders to jail (for short term imprisonment) for sundry small offences, instead of subjecting them to graded deterrent fines?  A balance has to be struck by resorting to realistic punishments by increasing the fines as an alternative to imprisonment, except in the case of heinous/serious offences. 

11. Inflation may also affect some other provisions differently.  While the examples given above refer to a category of cases where inflation has rendered the fine amount so insignificant so as to make the punishment illusory, in a different category of cases, the effect of inflation has made offences insignificant while maintaining the heavy punishment. Sections 427 to 429 of the Penal Code are examples of such anomalies.  Section 427 provides that whoever commits mischief and thereby causes damage to the amount of Rs 50 or upwards shall be punished with imprisonment which may extend up to two years or with fine or both.  Sections 428 and 429 provide that whoever commits mischief by killing, poisoning, maiming or rendering useless any animal of the value of Ten Rupees to Fifty Rupees, shall be punished with imprisonment which may extend up to two years or with fine or both, and of the value of Fifty Rupees or more, shall be punished with imprisonment which may extend up to five years or with fine or both.  This leads to the incongruous position that a person who causes death of another person by a rash and negligent act (vide Section 304-A) and a person who causes damage or wrongful loss of Rs 50 by any mischievous act (vide Section 427) are prescribed identical punishment, that is, imprisonment which may extend up to two years!  [Some may argue that comparing Sections 304-A and 427 is like comparing apples with oranges, as a rash and negligent act underscores the lack of any intention to cause injury, while a mischievous act underscores the existence of an intention of causing loss or damage.] 

12. The solution is to have a protocol of mandating review of the sentencing provisions and the quantum of fines (as also provisions defining or describing what constitutes an offence) periodically to assess the effect of inflation on statutory provisions.  Another solution is for the Law Commission to examine all enactments ‘creating’ offences and providing for punishment by way of payment of fines, as also enactments describing payment of fees and other charges, periodically and recommend revision so that the statutes will remain current, meaningful and effective.

II — Anomalies arising by reason of legislature’s failure to improve/update laws by taking note of the changing needs of the society

13. The exigencies and problems of the society at any given point of time lead to framing of laws to meet and deal with them.  With passage of time, the problems and exigencies may challenge or altogether disappear and new exigencies and problems may crop up. The changing circumstances requires the legislature to constantly monitor and review the laws so that any existing provision of law does not become cumbersome, redundant, impractical or absurd.  The Law Commission of India is tasked with this responsibility.  Frequent changes of the Chairman and Members of the Law Commission and/or keeping those posts vacant for long periods, come in the way of the Commission making effective recommendations for changes and pursuing them with the Government.  Further, the Law Commission being only a recommendatory body and the law-making being in the domain of the legislature, there is no guarantee that the recommendations of Law Commission for changes in law will be implemented.   The same is the fate of suggestions and recommendations made by the Supreme Court of India and the High Courts for changes in law and the efforts of individual members of the legislature to bring in legislations to improve the laws governing the society.  The country has been witnessing an unfortunate trend of some members of the legislature showing more interest in disrupting the proceedings of the House as part of their political or other agendas, rather than concentrating upon the purpose for which they are elected (which is addressing the needs of the people and meeting the requirements of the society by making/amending/repealing laws).

14. As a result, statutory provisions which are outdated, which have lost their relevance, which have become difficult of implementation and which have become absurd or meaningless, continue to be in the statute book to the detriment of the public and rule of law. 

15. By way of illustration, I may refer to the provisions relating to a civil suit under the Code of Civil Procedure enacted in 1908 (“CPC” for short) and the need to streamline the said provisions so that a civil suit can become result-oriented and its progress expedited till its logical conclusion.  At present, CPC provides for filing of a suit for adjudication of a right or remedy resulting in grant of a relief (by way of judgment and decree in a suit) and a separate proceeding for the enforcement of the judgement and decree to realise the relief granted (by way of execution of the decree).  When an adjudication results in a judgment and decree granting relief, the plaintiff does not actually get the relief, but merely gets a declaration that he is entitled to the relief sought.  Invariably, the defendant or the person against whom the decree is made (described as a ‘judgment debtor’) does not comply with it.  This means, the person who sued and obtained a decree does not get any actual relief, but has to initiate a separate proceedings to execute the decree to obtain the actual relief.  Many a time, getting the relief in execution is more difficult than getting the decree itself.

16. In certain types of cases such as partition suits, partnership suits, mortgage suits, administration suits and suits for accounts, the decision of the court is rendered in two stages, namely, a preliminary decree to determine the right/liability, and a final decree to quantify/give effect to the right/liability declared by the preliminary decree. This requires a plaintiff to initiate a suit for determination of the right/liability resulting in a preliminary decree declaring the entitlement to the relief and a subsequent proceedings (known as ‘final decree proceedings’) to secure the quantification or crystallisation of the declared relief through a final decree.  This again has to be followed by third proceedings, that is, execution proceedings, to realise the fruits of the decree.

17. Every person who approaches a civil court for relief is perplexed as to why there cannot be a single continuous proceedings from the stage of filing of an action till he gets the actual relief (satisfaction of his claim).   A person approaches a court with a grievance or cause of action not for the purpose of obtaining a paper decree, but for the purpose of obtaining a relief.  Therefore, a case which has been initiated by a person with a grievance should ideally end, not when a decree is passed, but when he secures the relief sought in the suit. 

18. In suits for partition, enforcement of mortgage, etc., the proceedings for preliminary decree, the proceedings for final decree and the proceedings for execution should merge into a single continuous proceeding with three stages; and once there is a determination and declaration of the right (by way of a judgment and preliminary decree in favour of plaintiff), the court should suo motu proceed to the next stage (that is, the stage of final decree) and then proceed to the next stage of execution to realise the relief, so that the proceedings once commenced by a plaintiff, logically ends only when he gets the actual relief.  Similarly, in other suits (which do not involve a preliminary decree and final decree), the proceedings for obtaining the decree and the execution thereof should be merged into a single continuous proceeding. The existing law does not permit such a single proceeding.    

19. A person who approaches the civil court for relief has further questions – when he has diligently approached the court and secured a decree, why should the defaulting judgment-debtor have the benefit of limitation and be released of his obligation to pay after twelve years?  Why should an execution proceedings once started be closed (for administrative or statistical reasons) before the relief is actually obtained by the decree-holder?  Why should not the judgment-debtor be declared as insolvent if he does not satisfy the decree within the specified period?  Why should, at every stage, the burden should be on the person who sues and obtains the decree, and not on the person who is found to be in default, that is, the judgment-debtor?   The existing system encourages many a clever and devious debtor to resort to dilatory tactics in the hope that passage of time will render the decree infructuous.  Only when the proceedings once initiated are continued till the matter reaches its logical end by the decree-holder getting the relief, justice can be said to have been effectively rendered.   

20. Recognising the need for continuation of the original proceedings (which presently ends with the judgment) till the plaintiff actually gets the reliefs sought and granted, the Supreme Court made the following suggestion for change in law[4]: (Shub Karan Bubna, SCC pp. 698-700)

A suggestion for debate and legislative action

23. The century old civil procedure contemplates judgments, decrees, preliminary decrees and final decrees and execution of decrees. They provide for a `pause’ between a decree and execution. A ‘pause’ has also developed by practice between a preliminary decree and a final decree. The `pause’ is to enable the defendant to voluntarily comply with the decree or declaration contained in the preliminary decree. The ground reality is that the defendants normally do not comply with decrees without the pursuance of an execution. In very few cases, the defendants in a partition suit, voluntarily divide the property on the passing of a preliminary decree. In very few cases, defendants in money suits, pay the decretal amount as per the decrees. Consequently, it is necessary to go to the second stage, that is, levy of execution, or applications for final decree followed by levy of execution in almost all cases.

24. A litigant coming to court seeking relief is not interested in receiving a paper decree, when he succeeds in establishing his case. What he wants is relief. If it is a suit for money, he wants the money. If it is a suit for property, he wants the property. He naturally wonders why when he files a suit for recovery of money, he should first engage a lawyer and obtain a decree and then again engage a lawyer and execute the decree. Similarly, when he files a suit for partition, he wonders why he has to first secure a preliminary decree, then file an application and obtain a final decree and then file an execution to get the actual relief. The commonsensical query is: why not a continuous process? The litigant is perplexed as to why when a money decree is passed, the court does not fix the date for payment and if it is not paid, proceed with the execution; when a preliminary decree is passed in a partition suit, why the court does not forthwith fix a date for appointment of a Commissioner for division and make a final decree and deliver actual possession of his separated share. Why is it necessary for him to remind the court and approach the court at different stages?

25. Because of the artificial division of suits into preliminary decree proceedings, final decree proceedings and execution proceedings, many trial Judges tend to believe that adjudication of the right being the judicial function, they should concentrate on that part. Consequently, adequate importance is not given to the final decree proceedings and execution proceedings which are considered to be ministerial functions. The focus is on disposing of cases, rather than ensuring that the litigant gets the relief. But the focus should not only be on early disposal of cases, but also on early and easy securement of relief for which the party approaches the court. Even among lawyers, importance is given only to securing of a decree, not securing of relief. Many lawyers handle suits only till preliminary decree is made, then hand it over to their juniors to conduct the final decree proceedings and then give it to their clerks for conducting the execution proceedings.

26. Many a time, a party exhausts his finances and energy by the time he secures the preliminary decree and has neither the capacity nor the energy to pursue the matter to get the final relief. As a consequence, we have found cases where a suit is decreed or a preliminary decree is granted within a year or two, the final decree proceeding and execution takes decades for completion. This is an area which contributes to considerable delay and consequential loss of credibility of the civil justice system. Courts and lawyers should give as much importance to final decree proceedings and executions, as they give to the main suits.

27. In the present system, when preliminary decree for partition is passed, there is no guarantee that the plaintiff will see the fruits of the decree. The proverbial observation by the Privy Council is that the difficulties of a litigant begin when he obtains a decree. It is necessary to remember that success in a suit means nothing to a party unless he gets the relief. Therefore to be really meaningful and efficient, the scheme of the Code should enable a party not only to get a decree quickly, but also to get the relief quickly. This requires a conceptual change regarding civil litigation, so that the emphasis is not only on disposal of suits, but also on securing relief to the litigant.

28. We hope that the Law Commission and Parliament will bestow their attention on this issue and make appropriate recommendations/amendments so that the suit will be a continuous process from the stage of its initiation to the stage of securing actual relief.

29. The present system involving a proceeding for declaration of the right, a separate proceeding for quantification or ascertainment of relief, and another separate proceeding for enforcement of the decree to secure the relief, is outmoded and unsuited for present requirements. If there is a practice of assigning separate numbers for final decree proceedings that should be avoided. Issuing fresh notices to the defendants at each stage should also be avoided. The Code of Civil Procedure should provide for a continuous and seamless process from the stage of filing of suit to the stage of getting relief.

30. In money suits and other suits requiring a single decree, the process of suit should be a continuous process consisting of the first stage relating to determination of liability and then the second stage of execution and recovery, without any pause or stop or need for the plaintiff to initiate a separate proceedings for execution. In suits for partition and other suits involving declaration of the right and ascertainment/quantification of the relief, the process of the suit should be continuous, consisting of the first stage of determination and declaration of the right, second stage of ascertainment/division/ quantification, and the third stage of execution to give actual relief.”

[emphasis supplied]

Unfortunately, nothing has been done.  The issue has not even been debated.  The anomaly can be corrected only by the legislature by suitable changes in law providing for a continuous proceeding, so that the courts become litigant-friendly and result/relief-oriented and the litigant approaching the court gets effective relief rather than relief on paper.

21. Such instances of complicated and prolonged procedures or impractical provisions abound in law.  There is a need for identification and rectification of such anomalies so as to streamline the procedure and make justice delivery real and meaningful. 

22. Another example that comes to mind is the continued existence of a draconian provision forming part of colonial legacy – Section 124-A of the Penal Code relating to the offence of sedition, relevant portions of which are extracted below:

124-A. Sedition.– Whoever by words, either spoken or written, or by signs, or by visible representation or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards the Government established by law in India, shall be punished with imprisonment for life, to which fine may be added, or with  imprisonment which may extend to three years to which fine may be added, or with fine.   

Explanation 1. – The expression “disaffection” includes disloyalty and all feelings of enmity…..”

The words ‘brings or attempts to bring into hatred or contempt or attempts to excite disaffection towards the Government’ are so vague as to cover at one end of the spectrum any attempt to overthrow the Government with violence or illegal means, and at the other end, any comment, public debate, criticism, political dissent, which are the ingredients of healthy public debate in a democracy where there is a constitutional guarantee of freedom of speech and expression.  Further, there are specific provisions in the Unlawful Activities (Prevention) Act, 1967, a law made post-independence, dealing with unlawful activities.  ‘Unlawful activity’ is defined as:

“(o) unlawful activity”, in relation to an individual or association, means any action taken by such individual or association (whether by committing an act or by words, either spoken or written, or by signs or by visible representation or otherwise),–

(i) which is intended, or supports any claim, to bring about, on any ground whatsoever, the cession of a part of the territory of India or the secession of a part of the territory of India from the Union, or which incites any individual or group of individuals to bring about such cession or secession; or

(ii) which disclaims, questions, disrupts or is intended to disrupt the sovereignty and territorial integrity of India; or

(iii) which causes or is intended to cause disaffection against India.”

There are also adequate provisions in the Penal Code itself (Chapter VIII relating to offences against public tranquillity) dealing with unlawful assemblies, rioting, obstructing public servants, promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., imputations/assertions prejudicial to national integration. In view of these specific provisions, there is no need to continue to have in the statute book, Section 124-A, a draconian and vague provision which came into existence to serve as a tool in the hands of the colonial rulers to suppress any dissent or to discourage participation in freedom struggle.  The continued existence of the said provision in the post-independence era may lead to mischief in the hands of unscrupulous, intolerant or totalitarian elements, causing irreparable misery and hardship to the public.   

III — Anomalies arising out of defective drafting of statutes

23. Legislative drafting is an art.  It requires not only sound legal knowledge and social awareness, but also precision, clarity, brevity.  It requires a command over the language.   When these qualities are missing, the enactment would be a clumsy inconsistent wreck leading to uncertainty, confusion, chaos, difficulty in implementation and a spate of litigation.  These defects are however rectifiable by suitable amendments to the statutes or by judicial interpretation. 

24. Maxwell onInterpretation of Statutes (12th Edn., p. 228), under the chapter ‘Exceptional Construction – Modification of the language to meet the intention’ explains the circumstances in which some defects in a statute could be corrected (approved and adopted by the Supreme Court[5]):

“Where the language of a statute, in its ordinary meaning and grammatical construction, leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity, hardship or injustice, which can hardly have been intended, a construction may be put upon it which modifies the meaning of the words, and even the structure of the sentence. This may be done by departing from the rules of grammar, by giving an unusual meaning to particular words, or by rejecting them altogether, on the ground that the legislature could not possibly have intended what its words signify, and that the modifications made are mere corrections of careless language and really give the true meaning. Where the main object and intention of a statute are clear, it must not be reduced to a nullity by the draftman’s unskilfulness or ignorance of the law, except in a case of necessity, or the absolute intractability of the language used.”

Where the plain and literal interpretation of a statutory provision produces a manifestly absurd and unjust result, the court will modify the language used by the legislature or even do some violence to it so as to achieve the obvious intention of the legislature and produce rational construction and just results[6].  In the words of Lord Denning[7]:

“If the makers of the Act had themselves come across this ruck in the texture of it, how would they have straightened it out?  He must then do as they would have done.  A Judge must not alter the material of which it is woven, but he can and should iron out the creases.”

25. I may refer to two examples where the Supreme Court made such corrections.

Correction of an error in Order 7 Rule 14(4) CPC

26. When the Code of Civil Procedure was amended in 1999, sub-rules (3) and (4) were added in Rule 14, Order 7 of the Code dealing with ‘Production of documents on which plaintiff sues’.  Sub-rule (4) provided “Nothing in this rule shall apply to document produced for the cross examination of the plaintiff’s witnesses or handed over to a witness merely to refresh his memory”.  This provision defeated the very purpose of Rule 14 on account of an error committed by the draftsman in legislative drafting, by erroneously using the words “plaintiff’s witnesses” instead of the words “defendant’s witnesses”.  The Supreme Court, in Salem Bar-II[8], substituted the words “defendant’s witnesses” for the words ‘plaintiff’s witnesses’ in the said sub-rule, pending correction by the legislature, on the following reasoning: (SCC pp. 368-69)

“35. Order 7 relates to the production of documents by the plaintiff whereas Order 8 relates to production of documents by the defendant. Under Order 8 Rule 1-A(4) a document not produced by defendant can be confronted to the plaintiff’s witness during cross-examination. Similarly, the plaintiff can also confront the defendant’s witness with a document during cross-examination. By mistake, instead of ‘defendant’s witnesses’, the words ‘plaintiff’s witnesses’ have been mentioned in Order 7 Rule (4). To avoid any confusion, we direct that till the legislature corrects the mistake, the words ‘plaintiff’s witnesses, would be read as ‘defendant’s witnesses’ in Order 7 Rule 4. We, however, hope that the mistake would be expeditiously corrected by the legislature.”

Corrections of mix-ups in Section 89 CPC

27. A classic mix-up occurred while drafting Section 89 of the Code of Civil Procedure rendering the said provision virtually meaningless and impossible of implementation.  As ADR processes were not being resorted to with the desired frequency, Parliament thought fit to introduce Section 89 in the Code, to ensure that the ADR process was resorted to before the commencement of trial in suits.  The relevant portion of the said section reads thus:

89. Settlement of disputes outside the court. – (1) Where it appears to the court that there exist elements of a settlement which may be acceptable to the parties, the court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the court may reformulate the terms of a possible settlement and refer the same for –

(a) arbitration;

(b) conciliation;

(c) judicial settlement including settlement through Lok Adalat; or

(d) mediation.

(2) where a dispute has been referred –

(a)-(b)            *                        *                              *

(c) for judicial settlement, the court shall refer the same to a suitable institution or person and such institution or person shall be deemed to be a Lok Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of 1987) shall apply as if the dispute were  referred to a Lok Adalat under the provisions of that Act;

(d) for mediation, the court shall effect a compromise between the parties and shall follow such procedure as may be prescribed.”

          (emphasis supplied)

If Section 89 is to be read and required to be implemented in its literal sense, it will be a trial Judge’s nightmare.

28. The first anomaly is the mixing up of the definitions of ‘mediation’ and ‘judicial settlement’ under clauses (c) and (d) of sub-section (2) of Section 89 of the Code. Clause (c) says that for “judicial settlement”, the court shall refer the same to a suitable institution or person who shall be deemed to be a Lok Adalat. Clause (d) provides that where the reference is to “mediation”, the court shall effect a compromise between the parties by following such procedure as may be prescribed. It makes no sense to call a compromise effected by a court as “mediation”.  Nor does it make any sense to describe a reference made by a court to a suitable institution or person for arriving at a settlement as “judicial settlement”, as is done in clause (c). “Judicial settlement” is a term in vogue in the USA referring to a settlement of a civil case with the help of a Judge who is not assigned to adjudicate upon the dispute. “Mediation” is a well-known term and it refers to a method of non-binding dispute resolution with the assistance of a neutral third party who tries to help the disputing parties to arrive at a negotiated settlement.  When words are universally understood in a particular sense, the definitions of those words in Section 89 with interchanged meanings, apparently due to a clerical or typographical error in drafting, led to confusion, complications and difficulties in implementation. If the word “mediation” in clause (d) and the words “judicial settlement” in clause (c) are interchanged, the definition makes perfect sense.

29. The second anomaly in Section 89 CPC is that its sub-section (1) wrongly imports the final stage of conciliation referred to in Section 73(1) of the Arbitration and Conciliation Act, 1996 (‘the A&C Act’) into the pre-ADR reference stage under Section 89 of the Code. Sub-section (1) of Section 89 requires the court to formulate the terms of settlement and give them to the parties for their observation and then reformulate the terms of a possible settlement and then refer the same for any one of the ADR processes.  If sub-section (1) of Section 89 is to be literally followed, every trial Judge before framing issues, is required to ascertain whether there exists any elements of a settlement which may be acceptable to the parties, formulate the terms of settlement, give them to the parties for observations and then reformulate the terms of a possible settlement before referring it to arbitration, conciliation, judicial settlement, Lok Adalat or mediation. A Judge cannot do this unless he acts as a conciliator or mediator and holds detailed discussions and negotiations running into hours.  If the aforesaid acts mentioned in sub-section (1) of Section 89 have to be carried out by the trial court before referring the parties to any ADR process, the court itself may as well proceed to record the settlement as nothing more would be required to be done by the ADR forum thereafter.  Section 73 of the A&C Act shows that the formulation and reformulation of terms of settlement is a process carried out at the final stage of a conciliation process, when the settlement is being arrived at. What is required to be done at the final stage of conciliation by a conciliator is borrowed lock, stock and barrel into Section 89 and the court is wrongly required to formulate the terms of settlement and reformulate them at a stage prior to reference to an ADR process. This becomes evident by a comparison of the wording of the two provisions[9].

30. Formulation and re-formulation of terms of settlement by the court is therefore wholly out of place at the stage of pre-ADR reference.  It is not possible for the courts to perform these acts at a preliminary hearing to decide whether a case should be referred to an ADR process and, if so, which ADR process.

31. If the reference is to be made to arbitration, the terms of settlement formulated by the court will be of no use, as what is referred to arbitration is the dispute and not the terms of settlement; and the arbitrator will adjudicate upon the dispute and give his decision by way of an award. If the reference is to conciliation/mediation/Lok Adalat, then drawing up the terms of the settlement or reformulating them is the job of the conciliator or the mediator or the Lok Adalat, after going through the entire process of conciliation/ mediation. Thus, the terms of settlement drawn up by the court will be totally useless in any subsequent ADR process. Why then should the courts be burdened with the onerous, virtually impossible and redundant task of formulating the terms of settlement at the pre-reference stage?

32. It will not be possible for a court to formulate the terms of the settlement, unless the Judge discusses the matter in detail with both parties.   The court formulating the terms of settlement merely on the basis of pleadings is neither feasible nor possible. The requirement that the court should formulate the terms of settlement is therefore a great hindrance to courts in implementing Section 89 of the Code. The Supreme Court attempted to give some clarity and purpose in Salem Bar (II)[10] by equating the “terms of settlement” to a “summary of disputes” meaning thereby that the court is only required to formulate a ‘summary of disputes’ and not ‘terms of settlement’.  Subsequently in Afcons[11], the Supreme Court directed that until Section 89(2) of the Code of Civil Procedure, 1908  was amended by Parliament, the definitions of the terms ‘judicial settlement’ and ‘mediation’ should be interchanged and that it would be unnecessary to formulate the terms of settlement or reformulate them while referring the cases to an ADR process.  In fact, even as on date, the errors in Section 89 CPC have not been rectified by Parliament; and consequently, the said section is being implemented relying upon the interpretation/corrections indicated in Afcons[12]

33. All errors and defects in statutes cannot, however, be corrected by courts.  Only some defects can be cured.  Courts cannot invalidate or correct the provisions of the Act on the ground that a better, fairer or wiser alternative is available.  Courts can examine only the constitutional validity of a statutory provision and not the wisdom or soundness of the provision.

34. Some laws may reflect the philosophy of the party in power. A law made by a particular party in power may not be to the liking of those who believe in a different ideology.  It is difficult, if not impossible, to make a law, particularly in social welfare legislations, which satisfies the ideologies and beliefs of all sections of society.  There will always be some who do not like or who do not believe in a particular law and consequently, are not satisfied with justice rendered with reference to such a law. 

35. There should be a continuous effort by the legislature, assisted or guided by the recommendations of the Law Commissions and suggestions of the courts, to minimise the anomalies and inconsistencies and ensure that the laws made are, to the extent possible, just, equitable and fair.

IV — Anomalies arising out of separate adjudications under civil and criminal law in respect of a common cause

36. The adjudication of liabilities/responsibilities under civil law and criminal law are kept separate and distinct.  This means that even in regard to the same subject- matter or cause of action, there can be more than one proceeding.  Normally, this position exists with reference to causes of action which give raise to a criminal liability for the offence in a criminal law and a civil liability under torts. 

37. For example, in a motor accident arising out of a rash and negligent driving, prosecution and punishment of the driver for rash and negligent driving is dealt with by the criminal court in a criminal proceedings, whereas the claims of compensation by the injured or the family members of the victim (where the victim succumbs to injuries) are dealt with by a tribunal in civil proceedings.  Another example is dishonouring of cheques which entails a criminal prosecution, but a civil action is necessary for recovery of the amount of the cheque or the interest that may be due thereon.  Other offences like cheating, forgery, misappropriation and defamation giving rise to civil as well as criminal liability are determined under separate civil and criminal proceedings. 

38. The anomaly arises on account of two different binding judgements being given in civil and criminal cases. Quite frequently, the criminal court may hold a driver of the vehicle not guilty of any rash and negligent driving, while in regard to the very same incident, an Accident Claims Tribunal may presume or hold the driver to be negligent and award compensation.  In fact, statistics show that in respect of about 98% of motor accidents, the victim/victim’s family gets compensation from the driver/owner (through the insurer) in the civil proceedings, but hardly around 15% of the criminal prosecutions end up in conviction of the driver for rash and negligent driving.  Similarly, quite frequently, domestic tribunals may hold an employee guilty of misappropriation and breach of trust and terminate him from service which may be upheld by the civil courts or labour courts, but on the other hand, the criminal court may hold the same employee not guilty of misappropriation and breach of trust, by giving him the benefit of doubt. 

39. The primary reason for such divergence is the degree of proof that is required under civil and criminal law.  While in civil law, the preponderance of probabilities is sufficient proof for creating a liability, proof beyond doubt (or the rule that no possibility other than the guilt of the accused should exist) is the requirement under criminal law.  The second reason is that the ingredients or legal requirements to make out an offence under criminal law may be different from the legal requirements that give rise to a liability under civil law.  As a result, the finding recorded in one proceedings (say in a criminal proceedings which becomes final) may not be treated as final and binding in the other proceedings (civil proceedings) arising out of the same facts[13]. This difference in adjudication in civil and criminal proceedings was pointed out by the Supreme Court thus[14]

Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein.” 

40. Is there a solution?  The exercise of jurisdiction in regard to civil and criminal matters depends upon the assignment of work by the High Courts (Note: In most of the States, there are no separate cadres of Judges for civil and criminal cases).  In fact, in many  towns, the same judicial officer functions as the civil court as also the criminal court (the Judge may however be referred to as a ‘Civil Judge’ or ‘Sub-ordinate Judge’ of the ‘District Judge’ while exercising civil jurisdiction and referred to as a ‘Magistrate’ or ‘Sessions Judge’ while exercising criminal jurisdiction).  The question often posed by the litigant is: why not a single proceeding for both civil and criminal proceedings arising from the same cause?  The solution is for the law to provide, where the same act or cause gives rise to both criminal and civil liability, for a common trial by a single forum with jurisdiction to inflict punishment for the offence under the criminal law and also grant relief for the civil wrong under the civil law.  Such unification of civil and criminal litigation before a single forum may benefit the public and also reduce the pendency.

V — Anomalies arising from personal philosophies and idiosyncrasies of Judges

41. The outcome of a litigation should depend upon the facts of the case and the legal position.  But in many cases, it depends upon several other factors also – the evidence that is let in, the ability of the advocate to present the case and the knowledge, wisdom and ability of the Judges at the trial and appellate stages. The personal philosophy of the Judges also adds to the uncertainty and inconsistency. Benjamin Cardozo in The Nature of the Judicial Process – Lecture I, put it aptly thus[15]:

“There is in each of us a stream of tendency, whether you choose to call it philosophy or not, which gives coherence and direction to thought and action. Judges cannot escape that current any more than other mortals. All their lives, forces which they do not recognise and cannot name, have been tugging at them – inherited instincts, traditional beliefs, acquired convictions; and the resultant is an outlook on life, a conception of social means…which, when reasons are nicely balanced, must determine where choice shall fall.  In this mental background, every problem finds its setting. We may try to see things as objectively as we please.  Nonetheless, we can never see them with any eyes except our own….”

President Theodore Roosevelt underlined the part played by the social philosophy of the Judges in rendering decisions[16]:

“The decisions of the courts on economic and social questions depend upon their economic and social philosophy. Every time the Judges interpret contract, property, vested rights, due process of law, liberty, they necessarily enact into law, parts of a system of social philosophy; and as such interpretation is fundamental, they give direction to all law-making.”

42. On account of their personal philosophies, some Judges are identified as acquitting Judges and some as convicting Judges; some as liberal and some as strict; some as pro-Government and some as anti-Government; some as pro-landlord and some as pro-tenant; some as pro-labour and others as pro-management and some as relief-oriented Judges and some as negative Judges.   Mr. Fali S. Nariman gives an example[17] of a great Judge who was prone to exhibit extreme ‘pro’ and ‘anti’ views:

“He simply abhorred landlords as a class … His other obsession was that he could not decide – he could never decide and would never decide – a single case involving capital and labour, or employer and employee, in favour of the employer .. In Justice Desai’s social agenda, landlords and employers were a class who could never succeed – who must not succeed – whilst he sat in Court.”

43. As a result of differences in perception among Judges, many cases similar on facts and law end up with different results with different Judges.  An interesting test conducted by National Judicial Academy, Bhopal, demonstrates that the personal philosophy of the Judge hearing the case, his upbringing and the social background in which the Judge was brought up, may have a significant bearing on the result in certain types of cases. The Academy gave a set of facts relating to a case involving rape to a batch of Senior Judges attending a workshop and asked each of them to write a judgment.  [The facts given in brief were: The victim, provocatively dressed, was walking alone on a public road during late hours of the night and did not object to some playful teasing by two youngsters.  The victim subsequently complained that the said two youngsters became friendly with her and raped her.]   51% of the Judges wrote judgments convicting the accused of rape; and 49% of the Judges acquitted the accused by recording a finding that victim’s conduct and actions clearly indicated consent on her part and therefore the complained act was not against her will. 

44. A litigant may win in the trial court, but lose in appeal. He may win in the trial court and the first appellate court, but may lose in a second appeal. On the other hand, he may lose before the trial court as also in the first appellate court but may succeed in a second appeal. The hierarchy of appeals and revisions leads to reversals and further reversals. It is said that whenever there is an appeal as provided in law, there is a 50% chance of the appeal being reversed by an appellate court and there is another 50% chance in regard to further appeal to the High Court and another 50% chance of reversal in the last court. That is why it is said that if there were a higher court than the Supreme Court, half the judgments of the Supreme Court would be reversed.  A senior advocate practicing in the Supreme Court (the eminent Mr. C.K. Daphtary) once observed that seeking special leave to file an appeal before the Supreme Court is a worse gamble than lottery or horse-race. 

45. When similar cases go before different Benches or Judges, it may give rise to different decisions. Lawyers and Judges consider this as normal. The common man and litigant however cannot digest this anomaly.  They expect that where the facts and circumstances are similar, the decision should be the same, whoever renders it.  They are unable to understand how the same case can end in success if it goes before Judge ‘A’ but fails if it goes before Judge ‘B’. They are perplexed because according to them, as a decision is based on facts and law, it should be the same whether it is decided by one Judge or the other.  If decisions should depend upon the philosophies or inclinations of the Judge, the litigant cynically and legitimately poses the query as to why he should not be permitted to choose his Judge.  It is well known that many a lawyer waits for a particular subject to be assigned to a particular Judge as per roster, to have his case listed for hearing or to argue his case.  On the other hand, if an experienced advocate knows that the Judge’s philosophy does not suit his client’s interest, he tries to avoid the hearing before that Judge.  This means that when some Judges are considered to be pro-something, there is a clamour for cases relating to such subject being listed before them by those who perceive that the Judge’s philosophy would help their cause. Judges who grant bails liberally and who are known for acquittals are hugely popular among defence lawyers. Strict Judges who seldom give interim orders are uniformly unpopular.  When a Judge is strict and considered to be a convicting Judge, everyone hesitates to proceed with the matter before him. 

46. If a bread winner dies in a motor accident, it can be possible that before Judge ‘A’, a compensation of Rs 10 lakhs may be awarded whereas before Judge ‘B’ the compensation of Rs15 to 20 lakhs may be awarded even though the persons who died were in the same age group, earning the same amount. Why should one court, when recording a finding that the termination of service is bad in law, award 100% back wages, whereas another court on the same fact awards only 50% and yet another court awards nothing on the ground that the employee has not done any work during that period?  The litigant would certainly want to know: Why he should not have the benefit of a more favourable decision by a liberal Judge?  Why should he be discriminated upon on account of vagaries in the philosophies and perceptions of Judges?  Why should he be discriminated upon by being given a lesser benefit, or worse, no benefit, when others are given better or the same benefits? Why should each court in a hierarchy of the courts decide differently? Why should not the State/courts ensure that all similar cases are similarly decided?

47. A free mind, as contrasted from indoctrinated minds, will always have different views and perceptions or different degrees of same perception.  Anomalies arising from personal convictions and philosophies of Judges will always be an inherent part of justice delivery in a free society.  As they are based on human traits and human philosophy, it is difficult to find a solution to them.  It is easy to say that if a Judge is pre-disposed or suffers from prejudice and bias, he disqualifies himself from acting as a Judge.  But it is next to impossible to achieve a state of absolute impartiality and neutrality.  Judge Frank rightly pointed out that it is a myth to think that merely by taking the oath of office of a Judge, a man ceases to be human and strips himself of all predilections and becomes a passionless thinking machine[18] and observed: “If, however, absence of ‘bias’ and ‘partiality’ be defined to mean the total absence of preconceptions in the mind of the Judge, then no one has ever had a fair trial and no one will.  The human mind, even at infancy, is no blank piece of paper.  We are born with predispositions….  What should be and can be avoided is the perceivable, visible or avowed philosophical bias or prejudice.  There is a need for a constant endeavour by appropriate training and education and self-discipline to reduce such predispositions and to ensure that the Judges follow a middle path, cultivating uniformity, consistency and objectivity.  Adherence to the doctrine of ‘Precedents’ would ensure consistency in decision-making. 

48. Judicial Academies, Law Schools, Bar Associations (and of course, members of the judiciary) may identify the decisions of the Supreme Court and High Courts, which have overlooked or are contrary to specific provisions of any statute or a binding decision, and send them to the respective court for taking remedial steps. To ensure that busybodies or vested interests do not mischievously or with ulterior motives, irresponsibly or without any basis, allege that any good or sound decision is per incuriam, an appropriate procedure should be prescribed (as for example by the Supreme Court or the respective High Court constituting a committee to examine and opine whether any decision is per incuriam) for getting such decision reviewed and rectified. The same procedure can also be adopted where there are divergent views by co-ordinate Benches leading to confusion.

VI — Anomalies arising out of erroneous judicial interpretation

49. Anomalies also occur due to erroneous interpretation of laws by Judges either due to lack of knowledge and capacity to understand, or due to their predisposition arising from their personal philosophies and convictions. 

50. Whenever an example is required to be given in regard to an erroneous judicial interpretation, reference is made to the decision of the Supreme Court popularly known as the ‘JMM case[19].  That case arose from the 1991 elections to Lok Sabha.  The Congress Party remained fourteen members short of the majority and it formed a minority Government with P.V. Narasimha Rao as the Prime Minister. The said Government faced a motion of no-confidence on 28.7.1993 and managed to defeat the motion by mustering the support of 265 members as against 251. One Ravinder Kumar of Rashtriya Mukti Morcha filed a complaint (FIR) with “CBI” alleging that a criminal conspiracy was hatched pursuant to which certain members of Parliament belonging to Jharkhand Mukti Morcha and certain others owing allegiance to Janata Dal (Ajit Singh Group) agreed to and did receive bribes from P.V. Narasimha Rao and others to give votes with a view to defeat the no-confidence motion. A criminal prosecution was launched against the bribe-giving and bribe-taking Members of Parliament under the Prevention of Corruption Act, 1988 (“the PC Act” for short) and under Section 120-B of the Penal Code. The Special Judge took cognizance of the offences of bribery and criminal conspiracy. The persons sought to be charged filed petitions before the High Court for quashing the criminal proceedings. The High Court at Delhi dismissed the petitions. The appeals by way of special leave were referred to a Constitution Bench.   

51. Bribery is giving of any consideration or benefit to the holder of a public office or a person performing public duty or the acceptance thereof by such person with the corrupt intention that he be influenced thereby in the discharge of his legal duty.  Section 7 of the PC Act provides that if a public servant accepts or obtains or attempts to obtain from any person, any gratification whatever other than the legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing forbearance to show in the exercise of his official functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, shall be punishable with imprisonment. Section 116 of the Penal Code and Section 12 of the PC Act make it clear that a person who offers bribe to a public servant shall also be punished for the offence of bribery.

52. The Members of Parliament who were accused of taking a bribe claimed immunity from prosecution under clause 2 of Article 105 of the Constitution which provided:

‘(2) No Member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament….

In view of this, the Supreme Court formulated the following as the first question for its decision:

“Does Article 105 of the Constitution confer any immunity on a Member of Parliament from being prosecuted in a criminal court for an offence involving offer or acceptance of a bribe?” 

53. The Constitution Bench by a majority of three to two answered the first question in the affirmative holding that the bribe-taking Members of Parliament who voted on the no-confidence motion are entitled to immunity from criminal prosecution for the offences of bribery and criminal conspiracy conferred on them by Article 105(2) of the Constitution. The majority held: (JMM case[20], SCC pp. 730 & 732)

137. We are acutely conscious of the seriousness of the offence that the alleged bribe-takers are said to have committed. If true, they bartered a most solemn trust committed to them by those they represented. By reason of the lucre that they received, they enabled a Government to survive. Even so, they are entitled to the protection that the Constitution plainly affords them. Our sense of indignation should not lead us to construe the Constitution narrowly, impairing the guarantee to effective parliamentary participation and debate.

                              *                          *                                *

143. Our conclusion is that the alleged bribe-takers, other than Ajit Singh, have the protection of Article 105(2) and are not answerable in a court of law for the alleged conspiracy and agreement. The charges against them must fail. Ajit Singh, not having cast a vote on the no-confidence motion, derives no immunity from Article 105(2).”

[Note: Ajit Singh was not extended the immunity extended to the other accused, as he did not cast his vote on the no-confidence motion and therefore was not entitled to the immunity under Article 105(2).]

54. Is this the correct view?  The answer is that it is not. Article 105(2) confers immunity on Members of Parliament when they discharge or purport to discharge their parliamentary or official duty of “making of speech” or “giving of votes” in Parliament or any committee thereof.  As the act of receiving a bribe is not in pursuance of the parliamentary or official duties of Members of Parliament and as their official status merely furnished the occasion or opportunity for the commission of an offence of bribery, the bribe-taking Members of Parliament were not entitled to immunity from criminal prosecution. The immunity under clause (2) of Article 105 becomes available to a Member only when he “makes a speech” or “gives his vote” in the parliamentary proceedings inside one of the Chambers of Parliament or in any committee thereof. Since the acts involving conspiracy and acceptance of a bribe were wholly done by the accused outside the four walls of the legislative Chamber, it did not attract the immunity provision so as to protect them from criminal prosecution. Further, these criminal acts constituted crimes by themselves without reference to what was going on in Parliament and were capable of proof before the Special Judge independent of any proof of casting of vote by a Member in Parliament. Therefore, such offences could not be construed as acts “in respect of anything said or any vote given” inside Parliament. In fact, the majority, though noticed the view of the US Supreme Court to that effect[21] did not follow the same. 

55. It is thus clear that Article 105(2) would give immunity in respect of complaints relating to private criminal offences involving defamation, libel or slander, but would confer no immunity from criminal prosecution for “public offences” (offences against the State) like bribery. Obviously, no State can be expected to confer such immunity which would be destructive of rule of law and adverse to the interests of the nation. Thus, the view of the Court in interpreting clause (2) of Article 105 in a manner enabling a Member of Parliament to claim immunity from prosecution for an offence of bribery would not only be repugnant to the healthy development of democratic institutions provided for in the Constitution, but would be subversive of the Constitution itself. 

56. The solution to this anomaly was indicated in the article Precedents – Boon or Bane?[22] thus:

“Legal scholars and members of the Bar should continuously identify precedents which may require reconsideration; and law journals/law research institutions may prepare a list of such decisions which can be a reference point for the Supreme Court (and the High Courts in respect of the decisions of the respective High Courts) to revisit/ reconsider such cases.”

VII — Anomalies arising from judgments per incuriam

57. A decision per incuriam means a decision rendered in ignorance of the terms of a statute or rules having the force of statute or a binding authority. The term also applies to a decision rendered by a court ignoring a binding decision (that is, binding decisions of the Supreme Court or binding decisions of larger Benches or coordinate Benches of the High Court)[23].  Judgments rendered per incuriam is a respectful way of saying that the judgment has been rendered in ignorance of law or that the Judge has overlooked some relevant statutory or legal provision or binding decision. 

58. A decision per incuriam leads to an anomalous situation as such decision is contrary to law, but the parties to the decision are bound by it and are expected to comply with it.  Much worse, a decision of the Supreme Court per incuriam will continue to be a law declared by the Supreme Court binding on all courts until it is declared to be per incuriam by a coordinate Bench or a larger Bench of the Supreme Court.  The decision declared per incuriam would no longer bind as a judicial precedent.  However, neither smaller Benches of the Supreme Court nor the High Court, much less the subordinate courts, can declare the decision to be per incuriam nor ignore the decision even though it is apparent on the face of it that a statutory provision or a binding authority has been ignored by the decision.  Such decisions rendered per incuriam cause considerable chaos and damage, as such decision will have to be followed until declared to be per incuriam, thereby perpetuating the injustice caused by the decision. 

59. The decision of the Supreme Court in S.R. Chaudhury v. State of Punjab[24] is an example where an obvious per incuriam observation continues to hold the field, as it is yet to be declared per incuriam by a coordinate or larger Bench of the Supreme Court.  In that case, the Court was considering the question as to whether a non-member appointed as a Minister by virtue of Article 164(4) of the Constitution of India could resign before the completion of six months period and re-appointed as a Minister after a gap, for another six months.  The Court held that the appointment of a person as a Minister for a second time during the term of the same Legislature, without being elected as its Member, was in violation of the constitutional provisions.  While doing so, it made the following observations with reference to the privileges of non-member ministers: (SCC p. 145)

37. …The privilege to vote in the House is conferred only on Members of the House of the Legislature of a State (Article 189).  It does not extend to non-elected ministers.  He may address the House but he cannot vote as an MLA.  None of the powers or privileges of an MLA extend to that individual.  Though under Article 177, the individual shall have a right to speak and to otherwise take part in the proceedings of the Legislative Assembly, he does not carry with him the usual “free speech” legislative immunity as provided by Article 194(2).  The individual cannot draw any of the benefit of an MLA without getting elected…”

Strangely, this observation did not take note of Article 194(4) which provides that the provisions of clauses (1), (2) and (3) of Article 194 would apply in relation to members who, by virtue of the Constitution, have the right to speech and otherwise to take part in the proceedings of the House of a Legislature of the State, as they apply in relation to members of that Legislature.  This would mean that the immunity regarding free speech and other privileges would be available to non-member Ministers under Article 194(2) during the term of six months.  This erroneous interpretation has resulted in non-members appointed as Ministers being denied the privileges and immunities to which they are entitled by virtue of Article 194(4) of the Constitution.  These observations of the Court continue to be binding law as it has not been declared to be per incuriam by a coordinate or larger Bench of the Supreme Court.    

60. Similarly, anomalies may also arise on account of the failure of Judges to follow binding precedents, either due to erroneous reading of earlier decisions or by dishonestly ignoring a binding decision resulting in divergent decisions.  Whenever there are such conflicting decisions, the litigant public are uncertain about the legal position, nor can they arrange their affairs in accordance with a settled legal position.  The lower courts who are bound by the decisions are also perplexed as the conflicting decisions have led to uncertainty about law and elaborate time-consuming exercises to decide which of the two conflicting decisions should be applied[25]

61. The solution to these categories of anomalies (decisions per incuriam and conflicting decisions) is more diligence – on the part of Judges to ensure that they do not ignore any relevant legal provision or binding authority while rendering the decision, and on the part of the lawyers to ensure that they bring to the notice of the court all relevant provisions of law and binding decisions.

VIIIAnomalies arising from the orders ‘for doing complete justice’

62. Article 142 of the Constitution empowers the Supreme Court to pass such decree or make such orders as is necessary for doing complete justice in any cause or matter pending before it.  Though the power conferred under Article 142 is very wide, the Court cannot, when exercising such power, make any decree or order inconsistent with, repugnant to, or in violation of, the express statutory provisions[26].    

63. Many a time, the Supreme Court, after deciding a matter on merits, finds that a further direction or order is required to do complete justice between the parties, exercises its extraordinary power under Article 142 and issues such further directions or order giving some benefit to a party either by relaxing the application of law or exempting the case from the rigours of the law.  For example, the Supreme Court, while dealing with cases of students whose admissions are cancelled or who are barred from taking the examinations on the ground that they had obtained admissions to engineering or medical courses by producing false caste certificates, has affirmed the decision of the concerned authorities that the admissions were invalid.  However, with the object of doing complete justice, the Supreme Court has exercised its power under Article 142 and permitted such students to complete the course and/or take the examinations, so that the time, money and efforts of the students were not wasted. Such benefit or relaxation is extended by the Supreme Court only to the students who were parties before it, as the power under Article 142 can be exercised only in any cause or matter pending before it.  Hundreds of other students similarly placed approach the High Courts.  As the High Courts do not have powers similar to the power vested in the Supreme Court under Article 142, they have to follow only the law laid down by the Supreme Court (that the admissions obtained by producing false caste certificates are invalid) and hold the admissions of such students to be invalid.  Having done so, the High Courts cannot permit the students to complete the course or take the examinations as they do not have the power to do ‘complete justice’ similar to the power of the Supreme Court under Article 142. Further, what is binding as a precedent is the ratio of the decision of the Supreme Court holding that the admissions obtained by producing false caste certificates are invalid.  As an order under Article 142 is not law declared by the Supreme Court, the further order or direction by the Supreme Court in exercise of power under Article 142 permitting the students to take the examinations, cannot be a precedent for the High Courts to grant similar relief, as only the ratio decidendi has to be followed and not any order made in exercise of power under Article 142.  Resultantly, if the High Courts grant relief similar to what was granted by the Supreme Court under Article 142, they would be committing an illegality as they have no power to make orders to do complete justice.  On the other hand, if the High Courts do not grant relief to those similarly placed students who approached the High Court, similar to the relief granted by the Supreme Court, it would result in similarly placed students being treated differently amounting to discrimination and injustice. 

64. The Supreme Court exercises jurisdiction under Article 142 if the special facts of the case before it necessitate making of an order to do complete justice. The Supreme Court cannot make an order directing that others similarly placed would be entitled to a similar relief, as the power under Article 142 is available only to make an order for complete justice in any cause pending before it.  When a large number of similar cases are pending before the High Court/s or trial court/s, if the Supreme Court makes an order under Article 142 to benefit only the party whose case is before it, that would result in injustice to those whose cases are not before it. 

65. In the early days of the Supreme Court, this issue did not arise as the Court had only five Judges and most of the cases were decided by all the Judges sitting together; and the power under Article 142 was very rarely exercised.  Over the course of seven decades, things have changed.  The Supreme Court has as many as 33 Judges and they sit in around 15 Divisions/Benches. Each Bench is independent of the other Benches and passes orders as it deems fit to do complete justice.  The decision making and declaration of law by each Bench of the Supreme Court is subject to some form of checks and balances as they are generally bound by the doctrine of precedents.  But in regard to orders made in exercise of the very wide unregulated power under Article 142 to do complete justice, the doctrine of precedents is inapplicable and therefore each Bench can pass orders as it deems fit purporting to do complete justice.  While some Benches (Benches identified as liberal or acquitting Benches) may exercise power under Article 142 by making orders to do complete justice thereby giving relief, other Benches (Benches identified as conservative or convicting Benches) may not choose to grant relief in exercise of jurisdiction under Article 142.  Passing of orders by different Benches in exercise of the power to do complete justice under Article 142, without any checks, balances or guidelines, will gradually lead to confusion and chaos.  Though the extraordinary power under Article 142 is to be used in rare and special circumstances, when the existing laws and precedents are found inadequate to do justice, the power is being used by different Benches frequently and routinely even though the matters are governed by specific statutory provisions or by binding precedents.  The following comments of Mr. K.K. Venugopal[27] in regard to the exercise of power under Article 142 are apposite:

“What we have found is that the Court, in its anxiety to do justice in a particular case or matter, has failed to account for the far- reaching effects of its judgment which may result in the deprivation of the rights of a multitude of individuals who are not before the Court at that time….. The Supreme Court has perceived its role as the one which would require it to ‘wipe away every tear from every eye’ but perhaps it is time that the use of this vast unlimited power included checks and balances…. One cannot lose sight of the fact that we have a Court of 31 Judges who sit in 13 Divisions* of 2 or 3 to deliberate on the seminal legal issues of the day.  One would even be compelled to observe that India has 13 Supreme Courts as each division represents, by itself, the Supreme Court of India and each Bench is independent of the other.  I would therefore propose that all cases invoking Article 142 should be referred to a Constitution Bench of at least five Judges so that this exercise of discretion may be the outcome of independent judicial minds operating on matters having such far reaching impact on the lives of the people….” 

[*Now the Court has 33 Judges who sit in 15 Divisions.]

The Supreme Court may have to ponder over the ways and means of bringing some discipline and consistency in exercising power under Article 142 if it is to be exercised by 15 Benches each acting as the Supreme Court.   

IXAnomalies arising from ipse dixit orders in PILs

66. A large number of public interest litigations are brought before the High Courts and the Supreme Court where sweeping directions are sought in regard to matters which fall within the domain of the executive.  In several of these PILs, directions are issued by the Supreme Court or the High Courts requiring the executive to provide certain benefits to the public in general or to certain sections of society.  Omnibus orders in the nature of ‘Government shall ensure supply of clean and safe drinking water to all citizens’, ‘Government shall take measures to reduce pollution and ensure clean air’, or grandiose directions like ‘let there be shelter for everyone’, ‘let all children be provided healthy and nutritious  food’, ‘let everyone be provided basic health care’, ‘let the rivers be cleaned’, ‘let all the potholes be filled’ and so on.  The intent and thought behind these directions are no doubt noble, well-meaning and in the interest of the public. 

67. When two Judges sitting as a division of the Supreme Court genuinely feel that everyone should be happy, healthy, comfortable and prosperous, it does not follow that they can direct the Government to ensure that everyone is happy, healthy, comfortable and prosperous.   As Courts issuing such directions are neither in a position to identify the source or provide the funds required for implementation of such orders, nor are they equipped to take over the functions of the executive, nor in a position to monitor the implementation of such directions continuously on day-to-day basis, there is no point in issuing such sweeping unimplementable directions or orders.  For example, a Court cannot direct the State to make available to all, basic health care, blissfully unmindful of or ignoring the huge financial outlay required for implementing such direction.  It is not proper for any Court to say that it is not concerned as to how the Government will find the resources or funds required to implement its orders, as it is only concerned with public interest and the rights and welfare of the people.  Courts should keep in mind that the resources/revenue of the Government are earmarked and allotted for definite designated purposes by way of budget allocations; and that if the Court issues any direction to achieve a particular objective or implement a particular scheme involving huge expenditure, such a direction can be implemented only by shifting or reallocating funds earmarked for other schemes or projects, which in fact may be equally or more important, but which are not before the Court and about which the Court has no information or knowledge.  Budgeting is a complex exercise.  Merely because a particular cause is brought before the Court, it cannot direct priority and out of turn implementation of that cause at the cost of other causes or schemes which are not before the Court.  Therefore, the temptation to issue grandiose directions or the temptation to make publicity-oriented observations should be curbed and avoided.  The role of the Court in public interest litigations should be merely to act as a catalyst and not to take over the functions of the executive and direct implementation without taking the responsibility for failure. 

68. In Supreme Court Bar Association[28], the Supreme Court stressed upon the need for care to ensure that its power is used with restraint, without pushing back the limits of the constitution and to function within the bounds of its own jurisdiction. It cautioned: (SCC  p. 446)

“82….To the extent, this Court makes the statutory authorities and other organs of the State perform their duties in accordance with law, its role is unexceptionable but it is not permissible for the Court to take over the role of the statutory bodies or other organs of the State and ‘perform’ their functions.”

In Directorate of Film Festivals[29], the Supreme Court pointed out: (SCC p. 746)

“16. The scope of judicial review of governmental policy is now well defined. Courts do not and cannot act as appellate authorities examining the correctness, suitability and appropriateness of a policy. Nor are Courts advisors to the executive on matters of policy which the executive is entitled to formulate. The scope of judicial review when examining a policy of the Government is to check whether it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution, or opposed to any statutory provision or manifestly arbitrary. Courts cannot interfere with policy either on the ground that it is erroneous or on the ground that a better, fairer or wiser alternative is available. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial review.”

The Supreme Court has repeatedly pointed out the need for the Courts to stay away from the domain of the executive. D.Y. Chandrachud, J. speaking for a Bench of three Judges in a recent case[30] cautioned: (SCC, p. 606)

“13. A suo motu exercise of the nature embarked upon by the High Court encroaches upon the domain of the executive. In a democracy based on the rule of law, government is accountable to the legislature and, through it, to the people. The powers under Article 226 are wide – wide enough to reach out to injustice wherever it may originate. These powers have been construed liberally and have been applied expansively where human rights have been violated. But, the notion of injustice is relatable to justice under the law. Justice should not be made to depend upon the individual perception of a decision- maker on where a balance or solution should lie. Judges are expected to apply standards which are objective and well defined by law and founded upon constitutional principle. When they do so, Judges walk the path on a road well-travelled. When judicial creativity leads Judges to roads less travelled, in search of justice, they have yet to remain firmly rooted in law and the Constitution. The distinction between what lies within and what lies outside the power of judicial review is necessary to preserve the sanctity of judicial power. Judicial power is respected and adhered to in a system based on the rule of law precisely for its nuanced and restrained exercise. If these restraints are not maintained the Court as an institution would invite a justifiable criticism of encroaching upon a terrain on which it singularly lacks expertise and which is entrusted for governance to the legislative and executive arms of Government.”

The principles regarding exercise of jurisdiction in PILs was succinctly analysed by the Supreme Court in another PIL seeking moral science to be prescribed for high school students.  The Supreme Court in that case stated[31]: (SCC, pp. 260-62)

“19. There is a tendency on the part of public interest petitioners to assume that every good thing which society should aspire to achieve can be achieved through the instrumentality of the court. The judicial process provides remedies for constitutional or legal infractions. Public interest litigation allows a relaxation of the strict rules of locus standi. However, the Court must necessarily abide the parameters which govern a nuanced exercise of judicial power. Hence, where an effort is made to bring issues of governance before the court, the basic touch stone on which the invocation of jurisdiction must rest is whether the issue can be addressed within the framework of law or the Constitution. Matters of policy are entrusted to the executive arm of the State. The court is concerned with the preservation of the rule of law.

20. This petition is illustrative of matters which lie beyond the province of judicial review. Whether children pursuing their education from Classes I to XII should be saddled with a separate course of moral science is not for the court to decide. Whether a value based educational system would best be subserved by including a separate subject on moral science or whether value based teaching should traverse the entire gamut of a prescribed curriculum is a matter which cannot be resolved by applying settled norms of judicial review. These are matters which cannot be determined in the exercise of the jurisdiction of the Court under Article 32.

                *                           *                               *

23. It is unrealistic for the Court to assume that it can provide solutions to vexed issues which involve drawing balances between conflicting dimensions that travel beyond the legal plane. Courts are concerned with issues of constitutionality and legality. It is difficult to perceive how matters to which solutions may traverse the fields of ideology, social theory, policy making and experimentation can be regulated by this court such as by issuing a mandamus to enforce a scheme of instruction in a particular subject in school education…..

24. These are vexed issues to which more than one solution may appear just. That is exactly the reason why a resolution of such matters must rest with those who have the responsibility to teach and govern over matters of education. Every good that is perceived to be in the interest of society cannot be mandated by the court. Nor is the judicial process an answer to every social ill which a public interest petitioner perceives. A matter such as the present to which a solution does not rest in a legal or constitutional framework is incapable of being dealt with in terms of judicially manageable standards.”

69. If, for example, the Court takes upon itself to clean up a river and issues directions implementation of which involves expenditure running into hundreds of crores, but is not a position to directly supervise the implementation resulting in the direction not yielding the desired result, who is responsible or accountable for the amount spent?  Even if the Court wants to monitor the interim and final directions issued by it in PILs, having regard to the nature of working of the courts and the case load, the matter under monitoring would be listed hardly once in a month or three months or six months. That kind of monitoring is of no help. The fact that the executive is not functioning effectively or properly is not a ground for taking over the functions of the executive.  For example, can the executive take over and decide criminal appeals on the ground that High Courts are not disposing of criminal appeals for more than twenty years resulting in the convicted appellants rotting in jails?  Or can the executive make an order requiring the judiciary to dispose of all matters which are pending for more than five years to be disposed of within three months?  The answer obviously is ‘No’.  Self-discipline and restraint are necessary before crossing the boundaries which delineate the operational fields of other wings. 

X —  Anomalies arising from discretionary non-adjudicatory directions

70. It is quite common for lawyers appearing before the High Courts and the Supreme Court, to seek a direction, especially when appeals (or SLPs) arising from pending matters are rejected, for disposal on priority basis within a specified period, of the matter pending before the lower court; and it is also common for the Supreme Court or the High Courts to routinely issue such discretionary non-adjudicatory directions.  This has resulted in the trial courts having on their board, a large number of cases with directions for priority disposal.  The trial courts, which are bound to follow such directions, are therefore constrained to keep aside older cases or more urgent cases, and take up the direction-given cases even though they may not really involve any urgency or they may not be old enough for getting priority in disposal.  In several courts, the entire time of the court is spent in taking up cases with priority directions from higher courts resulting in more urgent and older matters being side-lined.  Such directions by the higher courts for out of turn priority disposal without ascertaining the pendency position in regard to the old and urgent matters before the trial court, cause great hardship to other litigants whose cases are older or more urgent, apart from the interfering with the freedom of the trial court to organise and arrange their work in an efficient manner. 

71. The affected litigants wonder how the High Court or the Supreme Court, without ascertaining the number of older matters and urgent matters pending before the lower court, direct that a particular case that came before it, should be heard and decided on priority basis or day-to-day basis. The higher courts should refrain from issuing routine or frequent directions for priority disposal merely on the asking, without ascertaining the pendency position before the lower court. Such directions are warranted only where extraordinary urgency is made out, as for example where the matter is likely to become infructuous if it is not decided immediately.  In other cases where the higher court is of the view that expeditious disposal is required,  the proper course would be merely to observe that the case deserves expedition, but leave it to the discretion of the lower court to manage its board and decide upon the inter se priority among the cases pending before it.

XI — Anomalies arising out of inherent differences between justice according to law and justice according to morality

72. One of the major anomalies in law and justice arises on account of the difference between the concept of law and the concept of morality. Law comprises of statutes (codification of rules and principles in the form of enactments) and legal precedents (binding decisions of superior courts). On the other hand, morality refers to the prevalent moral values and ethical behaviour of the society (principles of fairness, truth, compassion, equity and equality).  In an ideal State, there will be rule of morality.   But what a practical working democracy seeks to achieve is rule of law and good governance. 

73. In the initial stages of development of legal systems, principles of morality recognised by the society were the legal rules.  Decisions by rulers and courts were based on the then current principles of morality and social customs. When principles of morality and ethical behaviour were being codified into laws, the law-makers found that there was also a need to incorporate the rules that were necessary for good governance, that is, rules required to maintain economic prosperity and security, peace and tranquillity, uniformity and consistency.  It was also found necessary to make laws to tone down the excesses, shortcomings and absurdities of traditions, social customs and conventions, rigid religious tenets (which were based on faith, conviction and superstitions) by breathing sense and logic into them.  Thus, there was a steady shift of emphasis from moral justice (prevalent beliefs and sentiments of the society as to what behaviour is right and what behaviour is wrong) to legal justice (justice according to law).

74. Law no doubt is broadly based on moral values and ethical behaviour.  But the notions and perceptions as to what constitutes ethical behaviour and morality undergo changes from generation to generation or even more frequently.  Principles of morality are based on social customs and conventions, religious tenets, faith, superstitions and illogical beliefs.   The law, though not wholly delinked from accepted principles of morality of the time, is also based on the needs and necessities of the society and the political philosophies and practical conveniences of the government in power.  Public good, economic stability, national and internal security, correction of regional or sectional imbalances played a dominant role in the formulation of most of the laws.  What is available is utilitarian justice or justice in accordance with law and not justice in accordance with moral and ethical values.  What is ‘just’ need not always be ‘lawful’ and what is ‘unlawful’ need not always be ‘unjust’.  The dichotomy between law and morality leads to several anomalies.

75. To give a simple illustration, principles of morality would require the borrower of a thing (say money) to return the thing borrowed to the lender whenever demanded; but in law, a lender may not be able to recover the amount lent by him in several circumstances – if the prescribed period of limitation has expired, or if the promissory note executed by the borrower does not bear the requisite revenue stamp, or if the lender being a money-lender is not duly licensed, or if the borrower is an insolvent.  A moral obligation cannot be, and is not, always converted into a legal obligation.

76. Bentham[32] explains the difference between morality and law thus in the following celebrated passage:

“Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good.  Legislation ought to have precisely the same object.  But although these two arts or rather sciences, have the same end, they differ greatly in extent.  All actions, whether public or private, fall under the jurisdiction of morals.  It is a guide which leads the individuals, as it were, by the hand through all the details of his life, all his relations with his fellows.  Legislation cannot do this; and, if it could, it ought not to exercise a continual interference and dictation over the conduct of men.  Morality commands each individual to do all that is advantageous to the community, his own personal advantage included.  But there are many acts useful to the community which legislation ought not to command.  There are also many injurious actions which ought not to forbid, although morality does so.  In a word, legislation has the same centre with morals but not the same circumference.”

77. Some sections of the society think that society should be governed by morality.  They expect laws to conform to morality.  As they expect law and morality to be the same, they tend to equate justice according to law with justice according to morality. They expect justice according to morality, not recognising that the two are conceptually different.  As a consequence, they perceive anomalies when law does not see eye to eye with morality.  An eye for an eye and a limb for a limb or life for life may be moral justice. An honour killing or a revenge killing may be justified under locally prevalent customs and moral values. But they are unacceptable to rule of law as no person can be a vigilante taking law into his own hands, nor act as a private arbiter of justice for what he perceives as a wrong.  If someone ruthlessly, savagely and openly kills a family of dozen persons, the residents of the area who resort to his lynching, may justify it as moral justice.  But in a society governed by law, the onlookers cannot resort to mob lynching, but are expected to catch the offender and hand him over to the police, for being prosecuted and punished in accordance with law. A society’s morals and culture may accept punishment by penalty of death, but if the laws of the country prohibit capital punishment, the murderer cannot be sent to gallows, but only to prison for life.  One of the elementary principles of jurisprudence relating to rule of law is that law cannot be, and should not be, interpreted on the basis of moral principles[33]. A crime may be heinous, morally repulsing and extremely shocking, but moral considerations cannot be a substitute for legal evidence and an accused cannot be convicted on moral considerations[34]

78. As a result, the decisions rendered by courts in accordance with the laws of the land, need not always be in consonance with principles of morality and ethics.   A court may render a decision which is perfectly valid in law, but unjust from the view of morality.  The Supreme Court has stated that law is different from morality and cases should be decided by the courts on legal principles and not on the Judge’s own moral values.  Maintaining this distinction, the Supreme Court, while recognising drug (heroin) manufacture and smuggling are illegal and are offences under criminal law, nevertheless allowed the value of such goods seized/confiscated to be treated as business losses for purposes of income tax[35]. Many a time society cannot understand or digest the fact that law is different from morality and justice according to law is different from justice according to morality.  Justice in a country governed by rule of law is rendered in accordance with law and not in accordance with morality.  Once the need for justice to be in accordance with law is understood and accepted, ‘justice according to law’ not being in accordance with ‘morality’, will not be considered as an anomaly.  In S.P. Gupta[36], the Supreme Court noted: (SCC p. 810)

1074. …A court of law has no power to give effect to any right not recognised by law.  It is also not the function of a court of justice to enforce or give effect to moral obligations which do not carry with them legal or equitable rights. It seems to be a very formidable proposition indeed to say that any court has a right to enforce what may seem it to be just, apart from the Constitution and the laws.”

XII — Anomalies arising out of generality of laws

79. A law is not drafted with reference to a particular individual or a particular fact situation.  A law is intended to be for general application.  This necessarily means that the law will have to make some general assumptions; that the law has to draw certain dividing lines to define what is legal (and what is not and what is permissible and what is not); and that such demarcating or dividing lines, when drawn, may in certain circumstances or viewed from certain angles, look unreasonable, arbitrary and absurd.  But it is futile to expect all laws to be logical, fair and just in all circumstances.

80. Take for example the Juvenile Justice (Care and Protection of Children) Act, 2015, enacted to protect children.  The Act defines a juvenile or child as a person who has not completed 18 years.  While an act which is an offence under the Penal Code would make an adult committing such act a ‘criminal’, the same act when committed by a child (a person who is not aged 18 years) would  render him  a ‘juvenile in conflict with law’ having regard to the provisions of the Juvenile Justice Act.  It assumes that a juvenile gets into a situation of conflict with law, either on account of ignorance, illiteracy, penury, undue influence, or coercion.  In fact, it proceeds on the basis that ills of children are the consequences of the greed, selfishness, apathy and lust of adults – which many a time include a parent or guardian.  It proceeds on the basis that a juvenile is unaware of consequences of his actions and cannot distinguish right from wrong.  As a consequence, when a juvenile violates law, he is not treated as an offender or considered as an accused in criminal law, nor treated as a convict and sent to jail, even if the offence is proved.  This has the following strange effect: If a youngster aged 16 years (completed 16 years) commits a rape or murder, he can be tried as an adult awarded punishment of life imprisonment or even the death, depending on the facts of the case.  But if he was aged 15 years and 364 days, that is, one day short of his 16 years when he commits a murder or rape, he will be considered to be a juvenile in conflict with the law and will neither be subjected to a trial under the Code of Criminal Procedure, nor punished under the provisions of the Penal Code.  He would not be sentenced or even ‘punished’, but be subjected to a reform process by being kept in a special home for a period of three years without any stigma or punishment and ordered to perform community service.  In short, technically if a juvenile commits a murder or rape five minutes before mid-night on the last day of his 16th year, he will go ‘unpunished’ in the standard sense, but if he commits the same heinous crime five minutes later, that is after he completes 16 years, he will be punished by imprisonment for life by treating him as an adult. [Note: The same is the position in regard to juveniles aged 17-18 years also unless, on a preliminary assessment with reference to his mental and physical capacity, the Juvenile Justice Board comes to the conclusion that he can be tried as an adult.] The common man, in particular the victim or her/his family and friends, may feel that such a law is absurd and cannot understand the following anomaly:  A person who has completed 16 years can be considered to be a mature person conscious of the consequences of his actions and is punished for a vicious and deliberate crime, the same person, if he was only a one day younger, would be considered as having no such vicious and deliberate intent and therefore spared the punishment.

81. But there is nothing absurd or unreasonable about such a legal provision.  As noticed above, the law is not made with reference to the facts of a particular case nor is it made to apply to a particular individual.  When the law is made, it is not trying to make a provision enabling a youngster who is aged 15 years and 364 days committing an offence, to get away with offence.  The law is made on the assumption that society wants to protect youngsters from the consequences of their unintended actions, during the age of their ‘innocence”.   Necessarily, while doing so, the law makers have to draw a line somewhere to distinguish a child from a man.  In this case, Parliament chose to draw the line at the completion of 18 years (or 16 years where the child is assessed to have the mental and physical capacity to commit the offence).  It is true that such line could as well have been drawn on completion of 15 years or 19 years.  Wherever the line is drawn, whether it is at 15 years or 16 years or 18 years or 21 years, there will always be a situation where, in border line cases, the law will look absurd and unreasonable.  Necessarily, when a law is made for application to the entire population, while serving the purpose reasonably and sensibly in general, it may look absurd or unjust in certain extreme or exceptional cases, as for example, when it enables a youngster aged 17 years and 364 days committing a ‘crime’ to contend that he did not commit a ‘crime’ and get away with the crime.

82. Another example is the provisions of the Limitation Act.  A person borrows Rs10 lakhs from another and executes a promissory note.  If a suit is filed within three years, it is considered to be maintainable and will be decreed.  But, if the same suit is filed one day after three years, the suit is dismissed as barred by limitation, and the creditor is prevented from recovering the amount due in a court of law.  The same applies to adverse possession.  If a trespasser occupies another person’s immovable property and enjoys it openly and peacefully asserting to be the owner, the real owner can recover possession by approaching court of law within 12 years.  But, if the real owner files the suit one day beyond 12 years, the suit will be dismissed and he will be remediless. Wherever the law of limitation prescribes a period beyond which the right cannot be enforced, a person who is barred by such limitation, would consider the limitation to be illogical, unreasonable and absurd; and he cannot understand why a one day’s difference should bar the suit. 

83. Laws will have to be made with certainty and definiteness.  Laws prescribe a timeline to avoid uncertainty and doubt.  Therefore, there is a need for the law to prescribe a cut-off line or date for various purposes.  The fact that such cut-off line by law discriminates between those immediately above and immediately below the cut-off line is inevitable and unavoidable result when drawing a line by prescribing a cut-off date.  The Supreme Court has clarified that the choice of a (cut-off) date as a basis for classification cannot be termed as arbitrary even if no particular reason is forthcoming for the choice of such date unless it is shown to be capricious or whimsical in the circumstances[37].   The citizens should accept such anomalies arising out of cut-off dates/cut-off ages. 

84. But another area of generality of laws is where unequals being treated as equals. Being of uniform application, a law does not distinguish between rich and the poor, powerful and the weak, educated and illiterate. There are several enactments which ignore the financial/economic condition criteria resulting in unequals being treated as equals.  For example, an offender pays the same fine for an offence under the Penal Code, whether he is a clerk with a monthly income of Rs 15,000 or is the CEO with a monthly income of Rs15,00,000.  Such an anomaly however is capable of correction.

85. The scheme of levying fines has been streamlined in some western countries to ensure that unequals are not treated equally.  France has enacted a Penal Code which provides for the imposition of fine according to a system allowing the court to levy a fine with reference to the offender’s income for a particular period, that is, a number of days [and/or revocation of rights and privileges (that is, prohibition to drive a motor vehicle or use of credit card or closure of business, etc.) and/or directing community service].  This system adopts two steps to quantify the fine: (i) establishing the number of day fine units based on the severity of the offence; and (ii) quantifying the value of the units with reference to the offenders’ daily income and the number of his dependents.  The structured fines are made punitive with the severity of punishment varying with the gravity of the offence.  This system makes the offender literally pay his debt to the society and also provide an economic disincentive for criminal behaviour.  By this method, the fine is levied as one month’s salary of the offender, which means that in case the offender is a blue-collar worker with a monthly income of 500 Euros per month, he will have to pay a fine of 500 Euros and in case the offender is the Chief Executive Officer with a monthly income of 50,000 Euros, he will have to pay a fine of 50,000 Euros.  Such a system of levying fines treats unequals differently (and not as equals) and acts as an effective deterrent to crime. 

86. The Law Commission of India has also expressed the view (in its 156th Report submitted in 1997) that the financial status of the offender should become a relevant consideration for levying fine. It pointed out that when all offenders, irrespective of their financial status, are subjected to the same fine, a rich man would pay the fine and walk away thereby avoiding imprisonment in default of payment of fine, whereas a poor man who cannot pay the fine is forced to undergo imprisonment. But nothing has been done till now to remove such discrimination (by reason of unequals being treated equally) and consequential injustice to the poor. 

XIII — Anomalies arising from application of different scales for rich, powerful & well-connected and for poor, weak & lacking in influence

87. The general perception among the public is that the scales used while applying laws and rendering justice to rich and powerful is different from those used for poor and weak; that when accused are rich and powerful, they mostly manage to go scot-free; and that when the accused are poor and weak, they either face conviction or suffer sentences disproportionate to the offence,  even if they are innocent. Is there any merit or truth in this perception? If so, what are the reasons for such a state of affairs?

88. The answer unfortunately is ‘yes’ and the reasons are obvious. Rich and powerful engage the best of lawyers. If they commit a crime, their money and power enable them to sabotage the investigation and prosecution at every crucial stage – at the stage of reporting the crime and registering the first information report, creating loopholes in the investigation, tampering with evidence, delaying the trial so that the witnesses die/disappear/forget thereby preventing the truth from coming out, buy/induce/threaten/coerce the prosecution witnesses to turn hostile, engage eminent lawyers to paint black into white or  white into black, or create enough doubt and confusion so that everything is grey and cloudy. Their money, position, connections, and power sometimes, even enable them to purchase their acquittal. The state of affairs with reference to the rich and powerful was aptly described by an eminent lawyer thus:

“Their crimes are not reported; if reported, most frequently not registered; if registered, true perpetrator is not identified; if identified, not prosecuted; if prosecuted, not usually convicted; if convicted, not punished sufficiently; if punished, sentence is not served, but time is spend away from the jail either on parole or in hospitals for imaginary illnesses; and even if sentence is served, buy and live a life of comfort, if not luxury, in the jail”

89. On the other hand, when the poor and the weak are accused of an offence, more often than not, they are victims of circumstances, or framed for someone else’s offence, or the offending act itself is a desperate attempt at survival. Their inability to engage the services of competent lawyers, results in their cases not being presented in the best possible light.

90. Thus, the consequence of difference in status is that there is more likelihood of an accused rich and powerful getting acquitted, while for a similar offence there is more likelihood of an accused who is poor and weak getting convicted, much worse, for an offence he did not commit. 

91. At the Joint Conference of Chief Ministers and Chief Justices held on 11.3.2006, the then Prime Minister noted:

“The manner in which some cases are being prosecuted, particularly where cases fail because witnesses turn hostile or change their evidence is causing concern to ever increasing sections of society.  There is a need for all of us to reflect whether the existing procedures are adequate and fool-proof; whether we are using all available provisions to prevent deviant behaviour; and whether we need new provisions in law so that justice system is seen to deliver justice.

At the said meeting, the Chief Justice of the Supreme Court agreed:

“The criminal justice delivery system appears to be on the verge of collapse due to diverse reasons. The public outrage over the failure of the criminal justice system in some recent high profile cases must shake us all up into the realisation that something needs to be urgently done to revamp the whole process, though steering clear of knee-jerk reactions, remembering that law is a serious business.”

The position remains the same, or possibly more serious.

92. If investigations and/or prosecutions are riddled with loopholes and weaknesses in the case of rich and powerful, courts become helpless spectators reluctantly watching the accused walk free.  Police and other investigation agencies and the prosecutors should be made wholly independent and freed from political or executive interference, to ensure effective and timely investigation and prosecution.  Attempts should be made to rely more and more on scientific evidence which cannot be tampered, rather than depending upon the oral testimony of witnesses who can be tampered and threatened.

93. Avoidance of delay by expediting the investigation and prosecution in most cases will also be an effective solution. Pendency for long periods enables rich and powerful to purchase, threaten and coerce witnesses to turn hostile or disappear. Much worse, it enables them to threaten and coerce the victims/complainants to go back on their complaint or to withdraw their complaint. 

94. Insofar as the poor and the weak, the remedy lies in providing them better access to justice by providing legal aid. In several western countries, the State spends as much on legal aid to poor and the public defenders’ office, as it spends on the department of prosecution. 

95. At this stage, it is necessary to note another widely felt, but unjustified, grievance.  Many commit the same offence – be it a minor offence of driving on the wrong side or a major offence of bribery.  But only a negligible few (not even one in thousand) are caught and tried for such offences. Not even one in lakh of bribe-takers is prosecuted and punished.  In such a scenario, a person caught and punished (for an offence which is also committed by a very large number) feels that he is discriminated against and singled out for punishment. He also feels that only persons like him who are not ‘well-connected’, or those who accidentally violate law, are punished, while others get away with the same offending acts. The grouse is ‘why me and not others?’ This raises the following questions: Should there be equal treatment of all offenders? When an offender is caught and prosecuted, should there be an effort to identify and prosecute all similar offenders, particularly when it is known that there are others who are guilty of similar offences?        

96. It is true that thousands commit the same offence, but only a few are brought to book.  But those who are caught cannot say that others are getting away with the same offence and that they should not be punished. The question considered by the court is whether the person who is booked has committed an offence.The court is not concerned with others who are not before it. The fact that thousands who committed the same offence have not been tried or punished, has absolutely no relevance to punishing those who are caught and prosecuted. The reason is simple. It is impossible to catch and punish all who commit offences. The object of prosecution and conviction is not only to punish those who have committed the offence, but also to deter other offenders and prospective offenders.

97. All said and done, it is an unfortunate truth that in regard to the offences of the same nature, there is more likelihood of the rich and powerful getting away, while poor and weak being punished. Avoidance of delay, stricter supervision of investigation and prosecution processes, education of the public to bring about an overall improvement in the ethical standards, are the remedies.

Conclusion

98. There is thus a need for a constant effort on the part of the legislature assisted by the executive and by the judiciary, to avoid injustices – real and perceived, by reason of several anomalies in law and justice. There should be a constant vigil to remove the defects and loopholes in statutes/rules and regulations to ensure that they are uniform, fair, practical and for the benefit and welfare of the society.   There should be a similar effort on the part of the judiciary to avoid errors, discrepancies and injustices.  Wherever anomalies are inevitable, their adverse effect should be softened and reduced. 

99. This article has attempted to use simple illustrations to avoid reference to either complicated legal issues or cases which are controversial in nature, so that it can be easily followed by law students and those who do not belong to legal fraternity. The object of this article is to encourage anyone associated with any field of law, on noticing  any anomaly, to bring it to the notice of Judicial Academies, or Law Commissions, or Law Journals, for being analysed and debated upon so that the legislature or court concerned may take steps to rectify the anomalies and make laws and justice more meaningful and effective. 


* Justice R. V. Raveendran, Former Judge, Supreme Court of India. The final lecture in the Karnataka State Law University Decennial Lecture Series delivered on 22-11-2019 at Bengaluru.

[1] This statement is attributed to Mr Bumble, a character in Oliver Twist by Charles Dickens, when Mr. Bumble, who had a domineering wife, was informed in court that “....for the law supposes that your wife acts under your direction’, replied: ‘If the law supposes that the law is an ass – a idiot’.  It is however believed that this statement was first made in a 17th century play ‘Revenge for Honour’. 

[2] The other offences for which punishment provided is imprisonment or fine or both are:

Imprisonment for 4 years or fine extending to Rs. 2000/- or both – (Section 335 – Voluntarily causing grievous hurt on provocation).

Imprisonment for 2 years or fine extending to Rs. 1000/- or both – (Section 338 – Causing grievous hurt by an act of endangering the life or personal safety of others).

Imprisonment of one year, or fine of Rs. 500/- or Rs. 1000/- or both – Sections 323 (Voluntarily causing hurt), 334 (Voluntarily causing hurt on provocation), 342 (Punishment for wrongful confinement) and 357 (Criminal force in attempting to wrongfully confine a person).

Imprisonment for 6 months or fine of Rs. 1000/- or both – Sections 177 (Furnishing false information), 178 (Refusing oath or affirmation by a public servant when required), 179 (Public servant refusing to answer a question), 182 (False information with the intent to cause a public servant to use his lawful power to injury of another person), 183 (Resistance to the taking of property by the lawful authority of a public servant, 228 (Intentional insult or interpretation to a public servant sitting in a judicial proceeding), 272 (Adulteration of food or drink intended for sale), 273 (Sale of noxious food or drink), 276 (Sale of drugs as a different drug or preparation), 279 (Rash driving or riding on a public way), 280 (Rash navigation of a vessel), 282 (Conveying a person for hire, by water in an unsafe or overloaded vessel), 286 (Negligent conduct with respect to explosive substance), 287 (Negligent conduct with respect to machinery), 288 (Negligent conduct with respect to pulling down or repairing buildings) and 289 (Negligent conduct with respect to an animal).

Imprisonment of 3 months or fine of Rs. 500/- or Rs. 250/- or both. Sections 140 (Wearing garb or carrying tokens used by a solder, sailor or airman), 171 (Wearing garb or carrying tokens used by a public servant with fraudulent intent), 180 (Refusing to sign a statement), 186 (Obstructing a public servant in discharge of public functions), 277 (Fouling water of a public spring or reservoir), 336 (Act endangering the life or personal safety of others) and 352 (Punishment for criminal force otherwise than on grave provocation).

Imprisonment of one month or fine of Rs. 500/- or both – Sections 172 (Absconding to avoid the service of summons or other proceedings), 173 (Preventing the service of summons or other proceedings, or preventing publication thereof), 174 (Non-attendance in obedience of an order from a public servant), 175 (Omission to produce a document to a public servant by a person legally bound to produce it), 176 (Omission to give notice or information to a public servant by a person legally bound to give it), 184 (Obstructing the sale of property offered for sale by the authority of a public servant) and 341 (Punishment for wrongful restraint).

Imprisonment of one month or fine of Rs.100/- or both – Sections 160 (Punishment for committing affray), 185 (Illegal purchase or bid for property offered for sale by the authority of a public servant), 187 (Omission to assist a public servant when bound by law to give assistance), 188 (Disobedience to an order duly promulgated by a public servant) and 358 (Assault or criminal force on grave provocation).

In fact, for the following offences, fine is the only punishment:

Fine of Rs 200 under Sections 283 (Obstruction in public way) and 290 (Punishment for public nuisance) and 263-A (Prohibition of fictitious stamps). Fine of Rs 500 under Sections 137 (Deserter concealed on board a merchant vessel), 171-H (illegal payment in connection with an election), 171-I (Failure to keep election accounts), and 278 (Making the atmosphere noxious to health). Fine of Rs 1000 under Sections 154 (Owner/occupier of land on which an unlawful assembly is held) and 156 (Liability of an agent of an owner/occupier for whose benefit a riot is committed).

[3] 156th  Report of Law Commission of India on The Indian Penal Code (Vol. 1), August 1997 http://www.scconline.com/DocumentLink/3Mo6Vk97

[4] Shub Karan Bubna v. Sita Saran Bubna, (2009) 9 SCC 689 

[5] Tirath Singh v. Bachittar Singh – (1955) 2 SCR 457 

[6] Bhag Mal v. Ch. Parbhu Ram, (1985) 1 SCC 61 and S. Sundaram Pillai v. R. Pattabhiraman (1985) 1 SCC 591 

[7] Seaford Court Estates Ltd. v. Asher, [1949] 2 K.B. 481:(1949) 2 All ER 155 at 164 

[8] Salem Advocate Bar Association, Tamil Nadu v. Union of India, (2005) 6 SCC 344 

[9]                  Comparison of the two provisions:

Section 73(1) of Arbitration and Conciliation Act, 1996 relating to the final stage of settlement process in conciliation. Section 89(1) of Code of Civil Procedure relating to a stage before reference to an ADR process.

When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations. Where it appears to the Court that there exist elements of a settlement which may be acceptable to the parties, the Court shall formulate the terms of settlement and give them to the parties for their observations and after receiving the observations of the parties, the Court may reformulate the terms of a possible settlement and refer the same for (a)  arbitration; (b)  conciliation; (c)  judicial settlement including settlement through Lok Adalat; or (d)  mediation.

[10] Salem Advocate Bar Association, Tamil Nadu v. Union of India, (2005) 6 SCC 344

[11] Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. Pvt. Ltd., (2010) 8 SCC 24  

[12] Ibid.

[13] Vishnu Dutt Sharma v. Daya Sapra, (2009) 13 SCC 729

[14] Iqbal Singh Marwah v. Meenakshi Marwah, (2005) 4 SCC 370 para 32

[15] The Nature of the Judicial Process – Lecture I, pp. 12-13

[16] In the course of his message to the Congress of United States on 8-12-1908. 

[17] Before Memory Fades….”  published by Hay House India, 2010 Edn., p. 358

[18] J.P. Linahan Inc., In re,138 F 2d 650 (2nd Cir1943)

[19] P.V. Narasimha Rao v. State (CBI/SPE),  (1998) 4 SCC 626

[20] Ibid

[21] Decision of the US Supreme Court in United States v. Daniel B. Brewster, 1972 SCC OnLine US SC 173, referring to United States v. Thomas F. Johnson, (1966) 15 L Ed 2d 681 – ‘A Member of Congress could be prosecuted under a criminal statute provided that the Government’s case did not rely on legislative acts or the motivation for the legislative acts.  A legislative act had consistently been defined as an act general done in congress in relation to the business before it.  The speech or debate clause prohibited enquiry only into those things generally said or done in the House or the Senate in the performance of official duties and into the motivation for those acts…. Financial abuse by way of bribes would gravely undermine legislative integrity and the right of the public to honest representation. Depriving the Executive of the power to investigate and prosecute and the judiciary of the power to punish briber of the members of the congress was unlikely to enhance legislative independence… Taking a bribe was no part of the legislative process or function; it was not a legislative act.  It was not, by any conceivable interpretation, an act performed as a part of or even incidental to the role of a legislature….’

[22] By the author published in (2015) 8 SCC J-1, at p. J-14

[23] Govt of Andhra Pradesh v. B. Satyanarayana Rao, (2000) 4 SCC 262 and State of Bihar v. Kalika Kher, (2003) 5 SCC 448

[24] S.R. Chaudhuri v. State of Punjab, (2001) 7 SCC 126

[25] For a more detailed discussion, see author’s article ‘Precedents – Boon or Bane?’ (2015) 8 SCC J 1  

[26] A.R. Antulay v. R.S. Naik, (1988) 2 SCC 602; Delhi Judicial Service Assn. v. State of Gujarat, (1991) 4 SCC 406; Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409; Lakshmidas Morarji v. Behrose Darab Madan, (2009) 10 SCC 425; J. Jayalalitha v. State of Karnataka, (2014) 2 SCC 401

[27] The Hindu, ‘Article 142 and the Need for Judicial Restraint’ by Mr. K.K. Venugopal, dated 18.5.2017

[28] Supreme Court Bar Assn. v. Union of India, (1998) 4 SCC 409

[29] Directorate of Film Festivals v. Gaurav Ashwin Jain, (2007) 4 SCC 737 

[30] Union of India v. Rajasthan High Court, (2017) 2 SCC 599 

[31] Santosh Singh v. Union of India, (2016) 8 SCC 253

[32] Theory of Legislation, Ch. XII, p. 60, cited with approval in Krishena Kumar v. Union of India, (1990) 4 SCC 207 and Raghunathrao Ganpathrao v. Union of India, 1994 Supp (1) SCC 191

[33] Raghunathrao Ganpatrao v. Union of India, (1994) Supp. (1) SCC 191

[34] K. Venkateshwarlu v. State of Andhra Pradesh, (2012) 8 SCC 73

[35] T.A. Quereshi v. Commissioner of Income Tax, Bhopal, (2007) 2 SCC 759  and Commissioner of Income Tax v. Piara Singh, 1980 Supp SCC 166

[36] S.P. Gupta v. Union of India, 1981 Supp SCC 87 para 1074 

[37] Union of India v. Parameshwaran Match Works, (1975) 1 SCC 305 and Indira Nehru Gandhi v. Raj Narain, (1975) Supp SCC 1 


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Op EdsOP. ED.

Economics has made a substantial contribution to our understanding of the law, but the law has also contributed to our understanding of economics.… The study of law gives economists an opportunity to improve the understanding of some of the concepts underlying economic theory.”

— David D. Friedman

Law and economics refer to the study of the application of the economic theories of law on the applications of law, was a brainchild of the Chicago School of Economics. The bringing together of the legal theory and economic reasoning brings out the psychological aspects of the changes that the new legal trends bring about and its impact on the rationality of the people. Law and economics albeit being new and recent, has been a development and a work in progress as we look at and the divergence of which cannot be fully explained and known presently. With the evolution of science and technology and the internet reaching its far heights, the value of consumer protection and more use of legally binding contracts and agreements are becoming increasingly at par with the ever-growing industries everywhere. With the advancement of the e-commerce industry, the business to business (B2B) and the business to customer (B2C) governing laws have turned out to be a major concern of this uprising front of the industry. The B2B laws govern the transactions between two or more businesses, whereas the B2C laws govern the laws and their contracts with the general public. Varied applications of the economic impacts of the law on the country and the people and vice versa is just a glimpse of what this developing study of law and economics pertains to.

Electronic commerce has been defined as the purchase and sale of commodities via the use of the internet. There can be sale of physical products as well for which money transfer takes place online. E-commerce takes into account different forms such as retail, wholesale, crowdfunding, subscription, physical products and services. The embellishment reasons of e-commerce are that with immense ease, it also cuts down on the cost of inventory management due to which it attracts new customers and bring them into the field of the online market. This enables a trader to stay open all the time and sell their products all across the nation.

E-commerce in India comprises the second largest user base in the world but the market is comparatively smaller than that of the United States or France. It is believed that e-commerce will grow at a very high rate in India touching $150 billion by 2020. Presently, Flipkart Pvt. Ltd. and Amazon.com Inc. are dominating the Indian markets but over time with an increase in the middle-class population, new entities will establish themselves. E-tail and e-travel will dominate the Indian market in the near future. India’s e-commerce industry is expected to contribute 4% of GDP by 2022 and match with China’s demands in 5-6 years.

Nevertheless, the major players in the Indian e-commerce sector underwent a jolt before the new year after the Department of Industrial Policy and Promotion tightened some of the Foreign Direct Investment rules through a Press Note which came as a huge setback for Amazon and Flipkart, the dominant players in the Indian e-commerce sector. This paper analyses the changes brought in by the Press Note 2 and how such changes are going to have an effect on the e-commerce sector in the upcoming times. Unfortunately, it seems the road ahead is full of obstacles.

Introduction

The last week of 2018 brought forth a new development with the new e-commerce policy being announced by the Government.  They went ahead and tightened some norms and regulations for the e-commerce players, a move that struck hard to the likes of Flipkart and Amazon, for now, they cannot sell products of companies in which they have stake.[1] The Department of Industrial Policy and Promotion (DIPP) in its Press Note 2 (Press Note) issued in December last year, made significant changes to Foreign Direct Investment (FDI) rules in the e-commerce sector in India.[2]

The big trigger which led to such changes was the increasing complaints being made to the Competition Commission of India (CCI) and All India Vendors Association (AIVA) from the small brick and mortar traders against Amazon and Flipkart, that they have been favouring their own subsidiaries on their platform to such an extent that the revenues of small scale traders are taking a hit. Some of these changes have been made in the backdrop of a lot of opposition and resistance from the trader’s association such as the Confederation of All India Traders (CAIT).[3] It is pertinent to note that the Press Note was released to acknowledge some of the major concerns raised by the trader’s association after the CCI approved the merger between Walmart and Flipkart where Walmart which happens to be the largest private employer in the USA purchased majority of the shares of Flipkart, the largest e-commerce company of India.[4]

The important point to take into consideration is that a small number of sellers in Flipkart’s online marketplace played a major contribution in its substantial shares. These small sellers were also the customers of Flipkart in the (B2B) segment as a result of which they were given preferential treatment by way of hefty discounts from both the B2B segment and online marketplaces.[5] However, even after taking note of such major concerns, the CCI decided not to address such competition concerns on the grounds that such concerns were not incidental to the impugned combination, thus playing a safe hand. The failure of CCI to address such issues led to the Government making major policy changes to provide relief to the small traders and sellers.

These changes aim to make the marketplaces far more genuine for there has always been complaints that the online marketplace as a channel offers regulatory arbitrage. The whole logic and the reasoning of a marketplace functioning is to have a genuine marketplace where there are only connecting sellers and buyers. This reasoning often used to get questioned. The FDI e-commerce policy clearly states that while FDI is allowed in the marketplace but it is not allowed in the inventory-led model.[6] The likes of Amazon and Flipkart hold major stakes in their online marketplace such as Cloudtail and RetailNet respectively which are big sellers on their respective platforms. This led to preferential treatment by way of providing hefty discounts to such marketplaces. With the new changes coming into place major players such as Amazon and Flipkart will have to make sure that they maintain fair play on the platform and maintain an arm’s length distance while providing discounts to such sellers.

While these changes are welcomed and the intention of the Government in bringing such changes might be to curb the unfair practices and ensure fair play in the marketplace, however, these changes are not entirely free from the lacunas and the Government will have to address such grey areas in the near future for proper functioning of the marketplace.

Business Models

In order to understand the changes brought in by policy, it becomes important to first understand the inventory-led model and which are the prevalent business models in the e-commerce sector.

Inventory Model: A brand while selling online on sites like Amazon and Flipkart is most likely to first sell to an intermediary alpha seller entity like Cloudtail or RetailNet and then these entities are selling to the end consumer on the e-commerce marketplaces like Amazon and Flipkart.

Marketplace Model: In this model, the brand directly sells to the end consumer via Flipkart or Amazon with e-commerce marketplaces. This can be done in two ways. First, one could ship the product form his own warehouse directly to the end customer which is said to be the pure marketplace model or, second, one could follow the Fulfilled by Amazon (FBA) model or Flipkart Advantage (FA) model where a brand could keep some of its stock in Amazon and Flipkart warehouses and then when the orders are received these stocks are shipped to the end consumers from those warehouses, the products being owned by the vendors while they use their warehousing services.

Changes

The DIPP issued guidelines and clarifications on rules pertaining to FDI in e-commerce. The highlights of the Press Note were the definitions of the marketplace and also the fact that the Press Note categorically states that FDI will be prohibited in inventory-led e-commerce models while 100% FDI through the automatic routes will be allowed in marketplace models.

Firstly, the policy mandates that 100% FDI is only allowed in the e-commerce marketplace model.[7] Secondly, no equity participation is allowed by the marketplace in the selling entity[8] thus prohibiting such marketplaces from selling products of entities related directly or indirectly on their platform. Thirdly, the marketplace cannot exercise control on the inventory. In fact, they have clarified this point further by saying that not more than 25% sales of the selling entity can come from one marketplace or a group[9] such as Flipkart, Myntra and Jabong which are one group. Fourthly, no exclusivity can be offered by the marketplace.[10] Fifthly, discounts and cashbacks cannot be influenced by the marketplace[11], although this rule has been in place for some time now but the word “cashback” has been added because people were circumventing in discounts in form of cashbacks. Sixthly, the contact details of the selling entity need to be clearly made visible on the marketplace to the customers.[12]

Implications

The no-equity participation rule and the 25% sales in one marketplace rule have direct ramifications for the marketplaces if they have been selling through the alpha sellers, for example, Cloudtail and RetailNet in cases Amazon and Flipkart respectively. The future of these models has now become unclear and now such brands need to think about alternative measures. Now, all the brands need to rethink about directly participating in the marketplace model. This could be done either through one’s own warehouse if they are equipped to handle single piece orders or through the models like Fulfilment by Amazon (FBA) model or the Flipkart Advantage (FA) model which are already in place.

The 25% sale in one marketplace rule and the exclusivity rule will have major ramifications for online brands and private labels of marketplaces because invariably they will end up having more than 25% of share in one marketplace. Further, the decline on the private label side can be expected which will provide an opportunity to homegrown Indian brands to go and capture the market.

If the 25% sale rule and exclusivity rule are coupled along with the curb on discounts and cashbacks rules, it becomes a great level playing field for traditional online as well as offline brands who were finding it difficult to compete due to the predatory pricing mechanism of these e-commerce marketplaces.

Furthermore, the contact details of the seller, being directly visible on the marketplace and the customer satisfaction being the responsibility of the seller would mean that brands will have to evolve their consumer relationship management (CRM) practices. Marketplace orders now need to flow into an integrated CRM where the call centre will be able to pop-up the Amazon order and answer any questions.

In the backdrop of elections as well as traders lobby putting a fair degree of pressure, the Government has made some significant changes in the policy. The few ones that merit significant attention is that though 100% FDI is permitted under the automatic route[13] it has been made applicable only to the marketplace model and not the inventory-based model of e-commerce. This provision albeit existing, was being openly flouted. However, the present Press Note went on to make this rule more stringent bringing in new regulation measures per which inventory-based model can appear only through ownership or control. A vendor is supposed to not only hold an ownership stake in the new product but also control that inventory. With the marketplace controlling that inventory, it becomes an inventory-driven marketplace in which FDI is prohibited.[14] This change in effect means that marketplace entities going forward cannot exercise any degree of control over the actual supply of the products. Further, they have also changed to the effect that insofar as any after-sales delivery and customer satisfaction is concerned, the product has to be solely handled by the sellers.[15] Both these changes are of immense implication for the ongoing marketplaces.

Other major changes that garners attention is that the Press Note imposes an embargo on the marketplaces by stating that if any of the group companies are selling more than 25% of what the vendor is selling on the marketplace, it will fail to qualify as a marketplace and will be seen as an inventory-driven FDI marketplace where FDI is prohibited.[16] According to these new regulations an entity can take up only 25% of the purchases from its subsidiary. Given the fact that entities such as Cloudtail contribute almost 40% to the business of Amazon and similarly RetailNet which contributing a fair share to Flipkart’s sales, this regulation going to have a huge impact on the big giants.

The impact of this rule can be broken down into two levels. Firstly, that the wholesale arms of these marketplaces cannot be selling more than 25% of what the vendor is purchasing. The important point to note here is that Amazon wholesale or Flipkart wholesale were supplying products in huge volumes and value to a number of vendors who were selling on these marketplaces. The new regulations have placed an embargo on such practice by restricting the vendors from purchasing more than 25% from group entities of the marketplace. Secondly, the other big restriction brought about by the new regulations is that the marketplace entity or any of the group companies of the marketplace entity cannot own a single percentage of equity in any company which is a vendor on the marketplace.[17] Such a regulation ties into the whole point of players such as Cloudtail and RetailNet or other marketplaces where there is indirect foreign investment. However, it remains to be seen whether no equity participation would also include indirect equity participation as in some of the marketplaces and seller entities the foreign investment is not there at the direct level but it is one layer above. The intent of the policymakers is clearly to keep the marketplace genuine where the scope or the relevance of the marketplace in driving sales has to be kept limited.

As a result of such regulations coming into place, Morgan Stanley warned that Walmart may exit the Indian e-commerce sector.[18] It is a major concern as Amazon decided to shut down its retail business in China after the Chinese Government imposed similar restrictions in the country.[19]

Before the new regulation coming into effect, Flipkart and Amazon could sell their own line of products such as AmazonBasics, Flipkart SmartBuy etc. which proved to be profitable for them as they could lower the costs and the supply chain process. As a result of these new restrictions marketplace such as Amazon reduced its stake in its group company Cloudtail from 49% to 24%.[20]

The Press Note also imposes a ban on the exclusive tie-ups with the sellers.[21] The intention behind this regulation is to create a level playing field and ensure uniformity in the market. This regulation seeks to take away the dominant position of some of the marketplace entities such as Flipkart and Amazon and exclusive sale of smartphone brands such as OPPO, VIVO, XIAOMI, etc. could be a thing of the past.[22] This rule restricts marketplace entities from giving preferential treatment to particular sellers and thus maintains an arm’s length basis.

Further, the Press Note mandates that cashbacks that are provided to the buyers by a group of companies of a marketplace entity should be fair and non-discriminatory.[23] This regulation has got its origin and background in the context of the fact that the earlier policy stated that the marketplace entity should not directly influence the price at which products are to be sold[24]. However, number of trader associations had raised grievances before the Government that the particular policy is not being followed in letter and spirit following which the Government went on to become extremely prescriptive to address the perceived abuse. The new regulation, however, does not change the overall nature of the restriction that was already present.

The issue of marketplaces influencing sale prices gained attention in April 2018 after the Income Tax Appellate Tribunal in Flipkart India (P) Ltd. v. CIT[25] noted that Flipkart is indulging in predatory pricing and that it has its nexus with certain specific retailers for increasing its profit. Thus, the Government vide Press Note has made efforts to curb the issue of predatory pricing and preferential treatment by clearly stating that the group companies can provide only fair and non-discriminatory cashbacks and prohibiting the marketplaces from giving preferential treatment to specific vendors. This restriction has come as great relief to brick and mortar retailers and small e-commerce players with Snapdeal’s CEO Kunal Bahl welcoming the new regulations.[26]

Plugging the Loopholes

The Government released the Press Note to establish a level playing field in the Indian e-commerce sector and making the sector fair and just for all. However, the Government in its pursuit to address the concerns of the e-commerce sector have left some grey areas which may merit re-evaluation in the future.

The timeline provided to marketplaces to implement changes was fairly short given the fact that significant changes were brought in by the Press Note and that would have required a significant amount of restructuring by the existing marketplaces as the regulations has a significant amount of ramifications for the current business model on which the current marketplaces are running. Flipkart’s Chief Executive, Kalyan Krishnamurthy in his letter to India’s industry department requested the Government for extension of time for implementing the new rules as he feared that the new regulations could cause significant customer disruption in the case of non-extension of the deadline for implementation of new rules.[27]

The new norms have also banned the exclusive tie-ups which will have big implications on a lot of brands that have been looking at specific tie-ups with either Flipkart or Amazon. The Government here has gone a little overboard in its measure to check the anti-competitive practices. In order to ensure and streamline the process of a genuine marketplace, the Government has taken away the party autonomy that comes with any business model. If a brand intends to tie-up with particular marketplace for it offers better commercial value to them then they should be allowed to do so. Such a condition restricting a vendor to tie-up exclusively with one particular marketplace does not even serves the objective the Press Note seeks to achieve which as a matter of fact has not been laid down clearly in black and white. This regulation has taken away the party autonomy and is not in line with any intent that one could have deciphered from the policy announcement.

Further, the new regulations have severely hit the marketplaces such as Flipkart and Amazon while excluding the domestic marketplace entities such as Patym Mall, Snapdeal, etc.[28] The prime intention of the Government in bringing new regulations was to create a level playing field in the Indian e-commerce sector and ensure fairness and justice. However, the new regulations failed to take the domestic entities within its ambit thus giving rise to the possibility of such domestic entities indulging in unethical business practices which would further raise competition concerns in the sector as this will give a clear advantage to these domestic players thus defeating the objective of the Government behind introducing the Press Note. While on one hand, the FDI marketplace is finding it tough to adhere to the new norms and regulations, on the other hand, these regulations provide an opportunity for the domestic players to take undue advantage.

The Press Note has also banned the marketplaces from providing hefty discounts and cashbacks. However, since the Government did not appoint any agency to ensure proper compliance of the rules, these marketplaces are likely to come up with innovative methods of providing discounts.[29] Also, there is a threat that such a restriction will have a negative impact on the customers at large as deep discounts and cashbacks are the primary incentive for most of the people in India behind shopping online. Further, these regulations do not take offline retailers within its ambit neither the same is clear from any provision which gives the offline retailers undue advantage. Further, although the Press Note talks about cashbacks provided by the group companies it is silent on the point of cashbacks provided by the marketplace entities. Marketplace entities can provide deep discounts and hefty cashbacks that could result in unfair and discriminatory pricing.

Furthermore, the Press Note failed to take into consideration the problems of implementation of some regulations. The Press Note does not even mentions any criteria to assess whether 25% purchases of a vendor are from the marketplace entity or its group companies considering the fact these marketplace entities do not even have the access to the accounts book of most of its vendor.

The new regulations also prohibit preferential treatment to any vendor in similar circumstances without providing any proper interpretation of the term “similar circumstances” thus giving uncontrolled discretionary power to the regulatory bodies.

Conclusion

The new policy brought in by DIPP should be welcomed as in the long run it has the potential of creating a level playing field. In the short run, entities might face some operational challenges of moving from the alpha seller model to the marketplace model directly. However, no matter how good the intention of the Government might be behind bringing the changes, they need to open their eyes soon and take step towards curbing the loopholes in the new policy as it clearly discriminates between foreign and domestic companies giving a clear-cut advantage to the latter. If these problems are not solved soon then the whole objective of the Government will face a major setback. In fact, as stated earlier there is a threat that major marketplace like Flipkart might end their operation in India. Such a possibility cannot be ruled out given the fact that Amazon decided to take an exit from the Chinese e-commerce sector in light of similar restrictions. Therefore, to prevent such extreme measure the Government should look forward to work in collaboration with these big entities and come up with rules, that is beneficial for all.


†  3rd year student, NUSRL, Ranchi.

[1] Govt. Tightens Norms for Etailers, Bars Exclusive Deals, The Economic Times (27-12-2018, 11.57 a.m.) <https://economictimes.indiatimes.com/news/economy/policy/government-tighten-norms-for-e-commerce-companies-for-sale-of-products/articleshow/67258251.cms>.

[2]  Press Note 2, Department of Industrial Policy and Promotion <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[3]  War Against Flipkart! Traders Association CAIT Complains to ED; Alleges Violation of Trade Rules, Financial Express (1-6-2018, 3.23 p.m.) <https://www.financialexpress. com/industry/war-against-flipkart-traders-association-cait-complains-to-ed-alleges-violation-of-trade-rules/1189833/>

[4]  Walmart International Holdings, In re, 2018 SCC OnLine CCI 103.

[5]  Walmart International Holdings, In re, 2018 SCC OnLine CCI 103, (para 13).

[6] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.3(ii)  <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[7] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.3(i) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[8] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(v)  <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[9] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(iv) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[10] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(xi) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[11] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(ix) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[12] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(vi) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[13] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.3(i) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[14] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(iv) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[15] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(vi) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[16] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(iv) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[17] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(v) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[18]  Nishanth Vasudevan and Samidha Sharma, Morgan Stanley Warns Walmart may Exit Flipkart Post New FDI Rules, The Economic Times (5-2-2019, 4.27 p.m.) <https://economictimes.indiatimes.com/industry/services/retail/morgan-stanley-warns-walmart-may-exit-flipkart-post-new-fdi-rules/articleshow/67843595.cms>.

[19]  Amazon Plans to Shut Online Store in China, BBC (18-4-2019) <https://www.bbc.com/news/business-47972634>.

[20]  Shambhavi Anand and Chaitali Chakravarty, Key Amazon Seller Cloudtail Returns in a New Avatar, The Economic Times (7-2-2019, 11.29 a.m.) <https://economictimes.indiatimes .com/industry/services/retail/key-amazon-seller-cloudtail-returns-in-a-new-avatar/articleshow/67877172.cms>.

[21] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(xi) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[22]  Subhayan Chakraborty and Karan Choudhury, New Govt. Norms may End Amazon, Flipkart Flash Sales and Discounts, Business Standard (27-12-2018, 4.22 a.m.) <https://www.business-standard.com/article/economy-policy/amazon-flipkart-may-feel-the-pinch-after-govt-bars-exclusive-deals-118122600873_1.html>.

[23] Press Note 2, Department of Industrial Policy and Promotion, Para 5.2.15.2.4(ix) <https://dipp.gov.in/sites/default/files/pn2_2018.pdf>.

[24] Press Note 3 (2016 Series), Department of Industrial Policy and Promotion, Para 2.3(ix) <http://dipp.nic.in/sites/default/files/pn3_2016_0.pdf>.

[25]  ITA No. 693. Bang/2018 (Asst. Year – 2015-16) <https://taxguru.in/wp-content/uploads/2018/08/Flipkart-India-P-Ltd.-Vs-Asstt.-CIT-ITAT-Bangalore.pdf>.

[26] Govt. Tightens Norms for Etailers, Bars Exclusive Deals, The Economic Times (27-12-2018, 11.57 a.m.) <https://economictimes.indiatimes.com/news/economy/policy/government-tighten-norms-for-e-commerce-companies-for-sale-of-products/articleshow/67258251.cms>.

[27] New E-Commerce Rules: Flipkart Warns of Major Customer Disruption, Livemint (29-1-2019) <https://www.livemint.com/industry/retail/flipkart-amazon-new-e-commerce-rules-1548756549308.html>.

[28]  E-Commerce FDI Norms Should be Applied on Domestic Players Also: CAIT, Business Standard (1-1-2019, 1.23 a.m.) <https://www.business-standard.com/article/companies/e-commerce-fdi-norms-should-be-applied-on-domestic-players-also-cait-118123100412_1.html>.

[29] E-Commerce Discounts May Continue, But in Innovative Ways, Livemint (28-12-2018, 12.39 p.m.) <https://www.livemint.com/Industry/QCRLPPX16uWwsTfFX07V0M/Ecommerce-discounts-may-continue-but-in-innovative-ways.html>.