UNION CABINET’S NOD TO SPECIAL REMISSION TO PRISONERS ON THE OCCASION OF 150TH BIRTH ANNIVERSARY OF MAHATMA GANDHI

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As part of a memorial and tribute for the 150th anniversary of Mahatma Gandhi, the Union Cabinet, chaired by the Honorable Prime Minister Shri Narendra Modi, has approved the scheme of a nationwide remission of certain categories of prisoners as a gesture of generosity and benevolence on 18th July 2018.

The scheme of remission is planned in three phases –

In Phase-I, the prisoners would be released on 2nd October, 2018 on the occasion of Birth Anniversary of Mahatma Gandhi.

In Phase-II, prisoners would be released on 10th April, 2019 on the Anniversary of Champaran Satyagrah.

In Phase-III, prisoners would be released on 2nd October 2019 on the Birth Anniversary of Mahatma Gandhi.

The Union Cabinet has listed the following categories of prisoners who would be considered for such remission:

Women convicts of 55 years of age and above, who have completed 50% of their actual sentence period.

Transgender convicts of 55 years of age and above, who have completed 50% of their actual sentence period.

Male convicts of 60 years of age and above, who have completed 50% of their actual sentence period.

Physically challenged/disabled convicts with 70% disability and more, who have completed 50% of their actual sentence period.

Terminally ill convicts.

Convicted prisoners who have completed two-third (66%) of their actual sentence period.

Further, special remission would not be granted in the following cases:

Prisoners who have been convicted of heinous crimes like dowry death, rape, human trafficking;

Certain prisoners whose offences have constituted the punishment of a sentence of death or where death sentence has been commuted to life imprisonment;

Prisoners involved and convicted under various laws as amended thereof including the Unlawful Activities Prevention Act 1967, the Narcotic Drugs and Psychotropic Substances Act 1985, the Terrorist and Disruptive (Prevention) Act 1987, the Prevention of Corruption Act 1988, the Foreign Exchange Management Act 1999, the Prevention of Money Laundering Act 2002, the Prevention of Terrorism Act 2002, the Protection of Children from Sexual Offences Act 2012, etc.

The Ministry of Home Affairs would issue advice to all states and union territories in India and would direct the state governments to process the cases of eligible prisoners. The administrations in charge would be further advised to constitute a Committee to examine the cases. The state governments would then place the recommendations of the Committee before their Governor for his/her consideration.

The Constitution of India 1950 has empowered the following authorities to grant pardons, etc and to suspend, remit or commute sentences in certain cases:

In case of a union territory- say, the President of India (Article 72)

In case of a state- the Governor of such state (Article 161)

Although, such remissions have earlier taken place in various states of Assam, Punjab, Delhi etc but this special remission of releasing the aforesaid categories of prisoners, comes at a significant time and is being considered as a befitting homage to the humanitarian values that Gandhi advocated.

 

Harini Daliparthy,

Senior Legal Associate

with

Srishti Banerjee

Faculty of Law, ICFAI Foundation for Higher Education (IFHE), Hyderabad

Intern,

The Indian Lawyer

REGULATION OF FOREIGN DIRECT INVESTMENT IN E-COMMERCE IN INDIA

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The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry, India has recently decided to implement yet again the guidelines issued for foreign direct investment (FDI) in e-commerce as provided by DIPP in its Press Note No. 3 (2016 Series).

According to the Press Note No. 3 (2016 Series), FDI in business to consumer (B2C) e- commerce is permitted in case a manufacturer/single brand retail trading entity wants to sell its products in India through e-commerce retail, etc. Further, a foreign e-commerce entity providing an information technology platform for facilitating transactions between buyers and sellers in India is allowed to enter the Indian e-commerce market under ‘100% FDI’ automatic route category. Although such an e-commerce entity is permitted to do B2B business with sellers registered on its platform, it cannot permit more than 25% of the sales/transactions conducted through its platform from a single vendor or their group companies.

A number of seller associations have earlier filed complaints before the Competition Commission of India (CCI) against the preferential treatment given to selected seller entities by a few e-commerce giants. The selected entities then become the major sellers on such e-commerce platforms to the disadvantage of smaller seller entities who do not get a fair opportunity to conduct B2C transactions in the e-commerce space. Further, the selected entities are allowed to give sharp discounts on such e-commerce platforms.

Reportedly, it is believed that this may have led the e-commerce giants to gain a bigger and dominant market share in the Indian online retail space, thereby making it difficult for other e-commerce entities to gain a market share in the e-commerce space. For instance, as per a few reports, Snapdeal and Shopclues merely have a share of 2-3% each in the total marketplace, whereas Flipkart and Amazon, together capture about 70% of the marketplace, thereby putting them in a place of dominant position.

Thus, the Government of India has proposed to formulate a national policy to regulate the e-commerce sector. Until such a policy is brought in force, the Government of India has proposed to create a separate wing comprising of certain officials from the DIPP and the Enforcement Directorate who would monitor and handle any violations of the FDI Policy governing e-commerce platforms, strengthen the implementation and enforcement of guidelines governing online retail platforms etc.

Thus, this move of the DIPP may help to maintain a level playing field for the sellers and the marketplace, and also promote and sustain a fair competition amongst the sellers and amongst the e-commerce entities.

Harini Daliparthy,

Senior Legal Associate

with

Siddharth Gupta

NorthCap University, Gurugram

Intern,

The Indian Lawyer

THE GOVERNMENT TAKES STEPS TO REDUCE TAX LITIGATIONS

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The Government of India has time and again felt the need to control the sprouting tax related litigations. The Economic Survey of 2018 had noted earlier this year that even though the success rate in such litigations is around below 30%, but there has been a high rate of filing of petitions by the Indian tax authorities including the Central Board of Direct Taxation (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) [Authorities] against defaulters. It further stated that the success rate for appeals in cases of indirect tax was only 11%, whereas in cases of direct tax, it was 27% in the Supreme Court of India. With a view to manage the indirect and direct tax related affairs and to eliminate minor litigations, the Government has hiked the threshold limit for appeals by the Authorities before the tribunals and the courts on 11th July, 2018 as follows:

APPELLATE FORUM PRESENT LIMIT FOR FILING APPEAL

(in INR)

CHANGED LIMITS FOR FILING APPEAL

(in INR)

Income Tax Appellate Tribunal (ITAT)/ Customs, Excise and Service Tax Appellate Tribunal (CESTAT) 10 Lakhs 20 Lakhs
High Courts 20 Lakhs 50 Lakhs
Supreme Court 25 Lakhs 1 Crore

 

In addition to this, the CBDT has decided to withdraw an aggregate of 41% cases that it had filed in ITAT, High Courts and Supreme Court except those cases that involve a substantial question of law. Further in case of CBIC, the litigation from its side in CESTAT, High Courts and Supreme Court would reduce by 18% except those cases involving substantial points of law.

According to the Economic Survey 2018, the delay and pendency of economic cases may have a severe toll on the economy in terms of delayed projects, accumulating legal costs and diminished investments. It further highlighted that the Authorities continue with the litigation despite high rates of failure in the appellate stage which adds to the pendency.

This decision of the Government aims to promote ease of doing business in India and to minimize the pending grievances of taxpayers pertaining to tax matters. It aims to reduce future litigation flow from the Authorities. This may also benefit small and medium taxpayers as they can focus on doing business than being bothered about litigating in the various fora.

Harini Daliparthy,

Senior Legal Associate

with

Sukriti Goyal

School of Law, University of Petroleum and Energy Studies

Intern,

The Indian Lawyer

 

APPROVAL OF DNA TECHNOLOGY (USE AND APPLICATION) REGULATION BILL, 2018

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The Union Cabinet, presided over by Prime Minister Shri Narendra Modi, has recently approved the DNA Technology (Use and Application) Regulation Bill, 2018 on 4th July, 2018. The Department of Biotechnology had drafted the Bill with a view to develop the forensic technologies pertaining to DNA for establishing a stronger justice delivery system in the country. The use of DNA technology in criminal investigation may be for various purposes such as for finding missing persons, victims of mass disasters, offenders, suspects, under trials, unknown deceased and for solving cases where offences are categorized as affecting the human body such as murder, rape, grievous hurt, etc, and those against property such as theft, dacoity, etc. This may help in providing speedy justice and increasing the conviction rate for heinous crimes.

As per the Press Information Bureau, India, the Bill provides for mandatory accreditation and regulation of DNA laboratories in India so that the DNA test results derived from the use of the DNA technology is reliable. It also ensures that there is no misuse of data of citizens and thereby no abuse of privacy in the hands of third parties.

Reportedly, the Bill further provides for an enforcement agency, the DNA Profiling Board, for authorizing the creation of state level DNA databanks, approving the methods of collection and analysis of DNA technologies. These databanks so established can be used only for the purpose of storing and recording information related to and used in forensic criminal investigation.

The Bill aims to set up an institutional mechanism to collect and utilize DNA technologies to collect samples from the crime scenes and identify people by using it.

The Bill may seem to be a move to reform the justice system in India. But it would have to ensure protection from misuse and abuse of the sensitive data so collected which relates to the privacy of the citizens of the country.

Harini Daliparthy,

Senior Legal Associate

with

Sukriti Goyal

School of Law, University of Petroleum and Energy Studies

Intern,

The Indian Lawyer

 

THE GOVERNMENT OF INDIA TO REVIEW OFFENCES UNDER COMPANIES ACT, 2013

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The Ministry of Corporate Affairs (MCA) in India has issued an order dated 13th July, 2018 thereby notifying the formation of a Committee to review certain offences under the Companies Act, 2013 (the Act) and decriminalize them in order to facilitate the courts to focus on offences of serious nature.

The ten member Committee would be chaired by the Secretary of MCA, Shri Injeti Srinivas. The Committee comprises of a number of prominent members including Shri T.K. Vishwanathan, the Ex-Secretary General of the Lok Sabha; Shri Shardul Shroff , the Executive Chairman of Shardul Amarchand Mangaldas & Co.; Shri Ajay Bahl, the Founder Managing Director of AZB & Partners; Shri Uday Kotak, Managing Director of Kotak Mahindra Bank; Shri Sidharth Birla, the Past President of Federation of Indian Chambers of Commerce & Industry (FICCI) and others.

The Committee may also invite experts from the Securities and Exchange Board of India, the Reserve Bank of India and the Comptroller and Auditor General of India for broad based consultation. The Committee has been constituted for the following purpose:

To examine the nature of acts categorized as compoundable offences, that are punishable with a fine or imprisonment or both, and recommend whether such acts can be re-categorized as civil wrongs or defaults. Further, whether non- compoundable offences, that are punishable with imprisonment or with imprisonment and fine, can be made compoundable.

To examine the current mechanism of levy of penalty/fine under the Act and to make recommendations for possible improvements.

To lay down an in-house adjudicatory mechanism to resolve such disputes without having to approach the courts.

To take necessary steps for the formulation of draft changes in the law and any other steps as may be relevant.

The Committee would have to submit any recommendations so made within thirty days of its first meeting.

A number of experts have welcomed this move of the Government as it may help to reduce the burden on the courts and enable them to pay attention to more serious offences. Thus the in-house adjudicatory system would hear and determine cases involving simple violations where only fine/penalty may be imposed.

Harini Daliparthy,

Senior Legal Associate

with

Sukriti Goyal

School of Law, University of Petroleum and Energy Studies

Intern,

The Indian Lawyer

 

ACCUSED IS ENTITLED TO COMPLETE INFORMATION IN HIS DEFENCE

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The Central Information Commissioner (hereinafter the ‘CIC’) has held in the favour of an accused-appellant, charged with the allegation of sexual harassment, holding him entitled to seek and receive complete information pertaining to the charges against him in order to enable him to defend himself appropriately.

The CIC in Balkrishna Porwal v. PIO, Department of Posts, decided in June, 2018, imposed a penalty on the Central Public Information Officer (hereinafter the ‘CPIO’) for not disclosing the information sought by the accused-appellant to defend himself.

The accused-appellant was facing an enquiry on a complaint of alleged sexual harassment and sought information through an RTI application on 15 counts, which also included statements of some of the witnesses pertaining to the case. The CPIO had disclosed information with respect to only 3 points and denied the rest under section 8 of the Right to Information Act, 2005 and section 16 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (hereinafter the ‘SHW Act, 2013’). Section 8 of the Right to Information Act, 2005 deals with ‘exemption from disclosure of information’ while section 16 of the SHW Act, 2013 deals with ‘prohibition of publication or making known contents of complaint and inquiry proceedings’.

The decision was upheld by the First Appellate Authority.

However, the accused-appellant thereafter appealed to the CIC. The CIC held that during the appeal the appellant is not a charged official but he is an official who is seeking justice and collecting documents for his safeguard provided under the Constitution of India. These are the safeguards against misuse and to protect the accused from false allegations. Principles of natural justice demand that certified copies of all documents relating to the inquiry report including copies of the statements of witnesses should be given to him to facilitate him to substantiate his defence and for conduct of the enquiry in a fair manner.

The CIC concluded by holding that “the charge of sexual harassment is a serious allegation which if falsely made and proved by suppression of information to the accused, it can ruin the career of the accused, cause permanent and irreparable damage to the reputation and also disturb his domestic life affecting his relations with his wife and children. Society will look him down and people will talk badly about him in his absence and some may even insult him openly. As per SHW Act 2013 he would be shifted, and he might even face criminal prosecution under IPC which in our country would span over a decade or more involving huge expenditure and going to courts for several rounds as an accused person. A false allegation can render his life a hell and if innocent, he might suffer serious mental torture also. It can destroy a person totally. The due process, principles of natural justice and legal provisions of the SHW Act 2013 provide him a right to information to secure all those related documents will strengthen that right.”

 

Surabhi Aggarwal

Senior Associate

The Indian Lawyer

ONE NATION ONE POLL: A CENSORIOUS CONCERN

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Recently, the Law Commission of India headed by Justice B.S Chauhan has been conducting various discussions with various political parties regarding the possibility for the conduct of simultaneous polls for Lok Sabha and State Assemblies in India.

During the discussion, Prime Minister Shri Narendra Modi emphasized the need of holding simultaneous polls which may later be worthwhile in conserving valuable resources such as time and money and the political parties would be more focused on building good governance. The then President of India, Shri Pranab Mukherjee and the Chief Election Commissioner of India, Shri Om Prakash Rawat have also consented to his view. But according to a few experts, multiple elections may help strengthen the democracy.

The Law Commission has proposed certain suggestions in the discussions which have been listed below:

Amendments to the Constitution of India, 1950, the Representation of the People Act, 1951 and the Lok Sabha and State Legislative Assemblies’ Rules of Procedure.

Addition of definition of simultaneous election in the Representation of People Act, 1951.

Amendment of the Rules of Procedure and Conduct of Business to replace ‘vote of no confidence’ with ‘constructive vote of no confidence’.

Ratification by majority of states of the proposed Constitution amendments, etc.

According to a few experts, these simultaneous elections may have the following pros and cons:

Pros

More time may be invested on developmental issues rather than wasting time on designing strategies and actions against opposition parties.

The Government of India may reserve and utilize money for implementing essential schemes and not waste the money in conducting elections throughout the year.

This system may help in diminishing corruption, casteism, communalism which is generally prevalent in elections and campaigns.

Cons

Conducting elections at the same time may lead to various complexities including requirement of huge numbers of electronic voting machines, enormous deployment of central forces, i.e. Central Reserve Police Force, Central Industrial Security Force and the Border Security Force, as cities and villages together will gear for voting, etc.

Upon clubbing both the elections there may always be dominance of national issues over state issues.

The politicians may, after the elections, become serene and lethargic during their term and become ignorant towards their responsibilities.

This idea of simultaneous elections has been highly debated over the years and may soon prove to be a colossal step taken towards a major reform in India but it is believed that the criticism should also be taken into consideration before this path-breaking idea is turned into a reality.

 

Harini Daliparthy,

Senior Legal Associate

with

Shubham Mongia

Law College Dehradun, Uttaranchal University

Intern

The Indian Lawyer

RESERVE BANK OF INDIA TO MONITOR FOREIGN INVESTMENTS RECEIVED BY INDIAN ENTITIES

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The Reserve Bank of India (RBI) has recently issued a circular, RBI/2017-18/194 A.P (DIR Series) Circular No.30, dated, 07th June 2018, to introduce a single master form (SMF) to be filled online by Indian entities receiving foreign investment. The RBI addressed this Circular to all Category I Authorized Dealer Banks including Commercial Banks, Urban Cooperative Banks, and State Cooperative Banks, etc, so that they could intimate the contents of this Circular to their concerned customers.

As per the Circular, prior to the implementation of the SMF, the Indian entities would now have to submit data on total foreign investment they have received so far to the RBI on its website on or before 20th of July 2018. Further the Indian entities would have to declare that the foreign investment received was within the sectoral cap and in accordance with the Foreign Exchange Management (Transfer or issue of security by person resident outside India) Regulations, 2017. Additionally they would have to state that the foreign investment received and reported now would be utilized in compliance with the provisions of Prevention of Money Laundering Act 2002 (PMLA) and Unlawful Activities (Prevention) Act, 1967 (UAPA). Such a declaration would have to be certified by the Company Secretary or a Chartered Accountant, etc.

The preliminary information would consist details about the types of foreign investments and investors, types of instruments issued to the investors, declaration by the investor, modes of payment of investment amount, whether the Indian entities are being investigated by Enforcement Directorate, Central Bureau of Investigation or any other agency for violation of Foreign Exchange Management Act, 1999 (FEMA), etc.

The aforesaid information may enable the RBI and the Government of India to monitor the quantum and the quality of foreign investments made in India.

Reportedly, the issue of this Circular seems to have created chaos and confusion amongst companies as they would have to submit a whole range of information pertaining to the foreign investments they have been receiving over the years, by 20th of July 2018. Also many companies are reluctant to disclose such information to RBI, as they might not have kept a record of the same and fear that they may be held liable for incorrect reporting or non-compliance of the said RBI directions.

The RBI has also stated in the Circular that Indian entities not complying with the aforesaid directions would not be able to receive any further foreign investments and be treated as non-compliant with Foreign Exchange Management Act, 1999 (FEMA).

 

Harini Daliparthy,

Senior Legal Associate

with

Srishti Banerjee

Faculty of Law, ICFAI Foundation for Higher Education (IFHE), Hyderabad

Intern,

The Indian Lawyer

 

LEGALITY OF GAMBLING AND SPORTS BETTING IN INDIA: WHETHER COMMENDABLE OR REPREHENSIBLE

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Recently, the Law Commission of India has in its 276th Report dated 5th July, 2018 made recommendations for legalization and Regulation of the act of gambling and sports betting in India. The said report was formulated in furtherance of an order of the Supreme Court dated 18.06.2016 that was passed in Board of Control for Cricket in India v. Cricket Association of Bihar and Ors (2016(8)SCC 535), where the Apex Court required the Law Commission of India to mandate the legality of gambling and betting in India.

According to Section 65B(15) of the Finance Act, 2017,  gambling or betting is defined as putting on stake something of value, particularly money with consciousness of risk and hope of gain on the outcome of game or a contest, whose result may be determined my chance or accident or on the likelihood of  anything occurring  or not occurring.

With the emergence of online gambling it has become rampant worldwide and has deeply penetrated into the Indian system. Therefore as per the Law Commission of India, it has become more important that gambling and betting is legalized in India. This would help to promote transparency and public welfare and also to detect frauds and money-laundering in the country.

For the purpose of enacting the law to govern and regulate gambling and betting in sports in India, it may be necessary to elucidate what activities would fall under the ambit of gambling and betting.

The Law Commission has made certain important recommendations listed below:

To design separate law, investigating agency and courts to deal with betting and match fixing charges.

To enact a model law by Parliament to regulate gambling that may be adopted by states in exercise of its powers under Article 249 or 252 of the Indian Constitution.

That betting and gambling transactions should be made cashless, i.e. only through electronic means such as credit cards, debit cards, online banking, etc.

To prescribe restrictions for the purpose of fixing the amount that   would be allowed for betting while using electronic facilities like debit cards, credit cards, online banking etc.

Further, these transactions should also be linked with the operator’s as well as of the participant’s PAN/AADHAR card to ensure transparency in these transactions.

It has also proposed for a restriction on persons below the age of 18 years and those who are below poverty line who may not be eligible to undertake such activities.

To debar certain sections of society such as minors, people from poor backgrounds etc. from being exploited by the possible ill-effects of such activities.

That income derived from such activities are made taxable under the Income Tax Act, 1961 as amended thereof, the Goods and Services Tax Act, 2017 as amended thereof,

To allow foreign direct investment (FDI) in this industry and regulate such FDI to prevent money laundering. It further held that the FDI as well as Foreign Exchange Management Act, 1999 may be suitably amended through encouraged FDI in the casinos / online gaming industry lawfully permitting technological collaborations, licensing and brand sharing agreements, etc.

To amend the Indian Contract Act, 1872 to allow wagering as lawful.

To compulsory ensure that the websites advertising gambling do not display objectionable or pornographic content on their portals / platforms.

To mandatorily display information regarding the risks involved in gambling / betting and to warn gamblers that the portal is not responsible for any risks taken by the gambler.

To amend National Sports Development Code of India, 2011 which aims at preventing betting and gambling in sports or any other code applicable from time to time in order to create an exception for the same if betting and gambling are to be regulated.

To make match- fixing and sports frauds as criminal offences with severe punishments.

To lay down safeguards for casinos inter alia for employees of casinos, minors, maintenance of accounts, audit in order to prevent ‘problem gambling’ and ‘gambling by minor’.

The Law Commission of India has referred to a Supreme Court case of M/s B.R Enterprises v. State of U.P and Ors. (AIR 1999 SC 1867), where the Apex Court has held that gambling is a not a trade within the meaning of Article (19) (1) (g) or Article 301 of the Constitution of India. Therefore, it is not constitutionally protected in India.

According to a few experts, only Government – licensed operators should be allowed to undertake gambling and betting activities in India, so that such practices are regulated in a better and effective manner by the Government of India.

As gambling and betting has become an integral part of the Indian society and as such, It would be impossible to stop such activities then the Law Commission of India has recommended legalization of gambling deeply rooted in Indian society and may further become difficult to cease such operations, therefore, the Law Commission of India has made the aforesaid recommendations to rather legalize and regulate the same in an effective manner.

 

Harini Daliparthy,

Senior Legal Associate

with

Shubham Mongia

Law College Dehradun, Uttaranchal University

Intern,

The Indian Lawyer

CENTRAL INFORMATION COMMISSION TAKES STEPS TOWARDS BETTER TRANSPARENCY UNDER RIGHT TO INFORMATION ACT

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The Central Information Commission (CIC), a body constituted under the Right to Information (RTI) Act of 2005 (the Act), has recently passed an order dated 18.06.2018 and declared that in the event of death of a complainant/appellant, the CIC would continue to examine the pending RTI applications as a complaint/appeal, as the case may be and further order the concerned department(s) to suo moto publish the decision on its website. By virtue of Section 18 of the Act, CIC has to inquire into complaints against refusal of access to information under the Act, incomplete or false information provided under the Act, to impose penalties, etc.

The order dated 18.06.2018 was passed after it was observed that there were series of mysterious deaths of whistle blowers and RTI activists who had filed applications/appeals under RTI.

Earlier, Regulation 24 of the CIC (Management) Regulations 2007 provided for abatement of pending proceedings before CIC, in case of death of the complainant or appellant. But the Delhi High Court in Delhi Development Authority v. Central Information Commission and Another 2010 SCC OnLine Del 2058 quashed the CIC (Management) Regulations 2007 on the grounds of being ultra vires to the RTI Act.

Further CIC has reportedly ruled that the account details of a deceased could not be denied to legal heirs on the grounds of personal information. In this case a son had sought for information from the Department of Posts about the policies taken by his deceased father. The CIC ruled that a son, being a class I legal heir of a deceased male person under the Hindu Succession Act, is entitled to know about the policies of his deceased father. Thus, CIC held that the Department of Posts was wrong in not furnishing the information to the Applicant and further, imposed penalty of a sum of Rs. 25,000 on the concerned officer.

This may be an encouraging step towards transparency and may also help to curb attacks on RTI activists and whistleblowers.

 

Harini Daliparthy,

Senior Legal Associate

with

Srishti Banerjee

Faculty of Law, ICFAI Foundation for Higher Education (IFHE), Hyderabad

Intern,

The Indian Lawyer