ARREST OF MR. NIRAV MODI UNDER THE FUGITIVE ECONOMIC OFFENDERS ACT

Economic offences refer to illegal acts committed by an individual or a group of individuals to obtain a financial or professional advantage primarily motivated for personal economic gain. It is one of the most menacing and predatory of offenses as the average citizen is completely left to the mercy of the perpetrators of these offences.

Economic offences entail, embezzlement, fraud, counterfeiting, money-laundering, and tax evasion, cheating, transactions defrauding creditors, benami transactions, inter alia. The Government of India brought in the ‘Fugitive Economic Offenders Act’ in 2018 (hereinafter referred as the “Act”) as then the existing Civil and Criminal laws were devoid of specific provisions to tackle such offenders. The procedures laid down under the Prevention of Money-Laundering Act (“PMLA”), the Benami Properties Transactions Act, 1988, the Companies Act, 2013 and the Indian Penal Code, 1860 were riddled with procedural delays and loopholes, which obstructed investigation and thereby impacted the financial state of the banks. We have witnessed several instances where such offenders have successfully fled and eluded the grasp of Courts, costing the country billions of dollars which eventually resulted in an exponential downfall in investor confidence in the country.

The Act defines a Fugitive Economic Offender (“FEO”) as a person against whom an arrest warrant has been issued and the offence exceeds Rs 100 crore in value. Further, the person has fled the country and refuses to return, in order to circumvent prosecution.

The Adjudicating authority under the Act is the Special Court established under PMLA, 2002. The powers of the Special Court pursuant to this Act are similar to those of a Civil Court, including search of persons in possession of records or proceeds of crime, search of premises on the belief that a person is an FEO, and seizure of documents.

The Act further provides for provisional attachment of properties, and subsequent confiscation if a person is declared a FEO. Furthermore, most importantly the Act disables the FEO from filling or defending any civil claim.

In the past, we have witnessed a number of scams and economic offences which have left an adverse impact on the Indian economy and also on the banking sector.  Some notable of these have been the IPL Scam, the Rotomac Scam, the fraud by Kingfisher Airlines Vijay Mallya, and now the most recent pervading media is the Punjab National Bank Scam by diamantaire Nirav Modi who was arrested in London on 19th March, 2019.

The Westminister Magistrate’s Court rejected the bail application of fugitive diamantaire terming him a ‘flight risk’. He is charged with conspiracy to commit fraud and conspiracy to conceal criminal property. The Indian Agencies have expedited the efforts to extradite him to face criminal trial in India.   

The Act aims to tackle a peril of today that has far reaching implications upon the well-being of the economy.  The Act is an efficacious attempt to curtail the impact of these economic offences which create an everlasting dent on the economy of the country.

Sonam Yadav

Associate

The Indian Lawyer

ELECTION COMMISSION OF INDIA ISSUES MODEL CODE OF CONDUCT TO GOVERN THE CONDUCT OF POLITICAL PARTIES AND CANDIDATES

In view of a Judgment passed by the Supreme Court of India in S. Subramaniam Balaji vs. State of Tamil Nadu and Others 2013, the Election Commission of India (ECI) has recently issued a Model Code of Conduct (MCC) in March 2019 to guide political parties and candidates and also govern their conduct during the election period.

The Supreme Court had observed in S. Subramaniam Balaji case (supra) that political parties, vide election manifestoes, promise to give gifts, freebies, etc to public if they come to power, which indirectly influences voters and to a large extent, also disturbs the idea of free and fair elections. Thus, the Supreme Court in this case directed the ECI to frame guidelines in consultation with all the recognized political parties for general conduct of the candidates, meetings, processions, polling day, party in power, election manifesto, etc.

In case of a general election to the House of the People or to a state Legislative Assembly, the MCC is applicable throughout India or, the state, as the case may be and remains in operation from the date of announcement of election date till the completion of election process.

The MCC broadly lays down the following guidelines to govern the conduct of political parties/candidates during the election period:

  1. A political party/candidate cannot indulge in any activity that causes or aggravates existing differences, hatred, criticism about other party/candidate’s private life not connected to their public activities, bribing of voters, protest against individual’s opinions, disturbances to public meetings organized by other political parties, hindrance to traffic during public procession/meeting, etc;
  2. A political party/candidate has to inform and provide details to the local police authorities before conducting a public meeting;
  3. A political party/candidate has to cooperate with officers on election duty to ensure that there is peaceful and orderly polling;
  4. The party in power or its officials cannot use their official position or use public exchequer for their electioneering work including publication of advertisements, conduct of public meetings, etc;
  5. From the time elections are announced, a political party/candidate cannot announce any financial grants or promises to construct roads and bridges, etc;
  6. The election manifestos should not contain promises of welfare measures that may exert undue influence on voters, etc.

As per the ECI, although the Model Code of Conduct is not a statutory document, but many of its provisions have enabling laws in the Indian Penal Code 1860 as amended thereof and the Representation of the People Act, 1951 as amended thereof, and therefore, any person aggrieved of violation of any such provision may take legal recourse under the said laws.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

SUPREME COURT OF INDIA HOLDS THAT DELAY BY LAWYER IN FILING APPEAL CANNOT BE GROUND FOR CONDONATION OF DELAY

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The Supreme Court of India in the case of Estate Officer, Haryana Urban Development Authority & Anr. vs Gopi Chand Atreja, passed a judgement dated 12.03.2019 holding that delay by a Lawyer cannot be a ground for delay in filing an appeal.

In the above case the Respondent filed a civil suit in the Civil Court, Karnal against the Appellant for a mandatory injunction in relation to the suit land. The suit was decreed by the Trail Court vide Judgement dated 01.05.2001.

The Appellants aggrieved with the Judgement of Trial Court filed a first appeal in the Court of Additional District Judge, Karnal. The District Court of Karnal by the Judgement dated 07.02.2002, dismissed the first appeal and affirmed the Judgement of the Trail Court.

The Appellants then filed a second appeal in the High Court of Punjab & Haryana at Chandigarh after 1942 days (4 years 6 months) along with an Application under Section 5 of the Limitation Act, 1963 praying to condone the delay in filing the second appeal. The High Court on 20.01.2008 rejected the application and declined to condone the delay. The Court further added that the second appeal is dismissed as it is barred by limitation. The Appellant further filed a review petition which the High Court again dismissed. The Appellant then filed a special leave petition in the Supreme Court of India.

The Supreme Court of India held that if the Appellant’s lawyer did not take timely steps which resulted in delay, it was the duty of the Appellant to have reminded the lawyer and if even then the lawyer was not taking interest the Appellant should have engaged some other lawyer.

The Apex Court held that the High Court was correct in not condoning the second appeal for the following reasons, firstly, the delay was disproportionate, secondly, there was no proper explanation for the delay and thirdly, the ground alleged in support of the Application under Section 5 of the Limitation Act, 1963 does not establish an adequate cause for delay as allowed by the Law.

 

Suchit Patel

Associate

The Indian Lawyer

INDIA LOK SABHA ELECTION 2019: SOCIAL MEDIA RULES

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Amidst the 2019 Election being in full swing, the Election Commission on 10th March 2019, announced dates for the 2019 Lok Sabha Polls along with the Model Code of Conduct (“Code”). This Code is a set of guidelines and rules to ensure that the Elections and the campaigning are conducted in just and fair manner. The Code shall be in force till the results are declared.

In the era of digital politics where the media is an important ally and a potent force multiplier, the Election Commission being conscious about the power of media, has issued stringent guidelines on social media usage during elections by political parties and candidates for its progressive engagement.

According to the guidelines framed for the use of social media candidates are required to furnish full details of their social media accounts at the time of filing nominations and their activities on Facebook, WhatsApp, Twitter, Google and other platforms. These accounts would be monitored and scrutinized by the Election Commission. This is for the first time that the political parties are mandated to ensure that their social media accounts also conform to the official guidelines for “acceptable behavior”.

Provisions of the Code will apply to the content being posted on social media by the candidates or the political parties. Any contravention from the prescribed Code would warrant a stringent action by the Election Commission.

The Media Certification and Monitoring Committees (“MCMCs”) are also constituted at the district and state levels to pre-certify all political advertisements to be issued on social media platform by the parties. One social media expert will be a part of the MCMC at each level.

The Internet and Mobile Association of India (“IAMAI”) along with the social media platforms are required to deploy proper fact checkers to scan fake news and abuses on the social media.

Pursuant to the guidelines, the political parties or the candidates are not allowed to post any content that could potentially vitiate the electoral process or hamper peace, tranquility, social harmony and public order.

Candidates and political parties are now obligated to include all payments made to internet companies and websites for carrying advertisements, campaign-related operational expenditure on making creative development of content, salaries and wages paid to the team employed to maintain social media accounts in their campaigning expenditure, including the money spent on social media advertising, in their poll expenditure to be submitted to the Election Authorities.

These guidelines on the face of it seem to have done a good job in formulating a regulatory mechanism for information dissemination through social media. The real problem lies with the implementation and enforcement as the scrutiny and exploration is limited to the declared official accounts of the parties but there are numerous unofficial accounts operating to carry out the messages of these parties, thus enabling violation of the guidelines.

It would be interesting to witness how the third pillar of democracy is used by the political parties at large in propagating their ideologies, promises and agenda through the social media in the world’s largest democracy.

Sonam

Associate

The Indian Lawyer

ELECTION COMMISSION OF INDIA MANDATES DISCLOSURE OF CRIMINAL ANTECEDENTS OF CANDIDATES

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The Election Commission of India (ECI) has recently issued the Schedule of Elections 2019 on 10.03.2019. The said Schedule contains instructions and model code of conduct for political parties and candidates contesting in the Elections 2019, guide for voters, information for polling parties, etc.

One of the instructions to the political parties and the candidates contesting in the Elections 2019 is that all the candidates have to file a Form 26 Affidavit along with their nomination papers. This Affidavit would contain certain information including:

The criminal antecedents of the candidate, if any,

The movable and immovable assets, and investments in India and abroad, of the candidate, and his/her spouse and dependents,

The liabilities of the candidate, and his/her spouse and dependents,

The candidate’s educational qualifications, etc.

The Supreme Court in Lok Prahari Vs. Union of India 2018 made the following observations and held that:

A voter speaks out or expresses his/her opinion by way of casting a vote and such speech is a part of the Fundamental Right under Article 19 (1) (a) of Constitution of India. Thus, to enable the voter to exercise his/her Fundamental Right effectively, he/she is entitled to all relevant information about candidates at an election.

Thus, such relevant information would include:

A candidate’s criminal antecedents (if any)

A candidate’s assets and liabilities

A candidate’s educational qualifications

Further, Section 33A of the Representation of the People Act, 1951 as amended thereof (the Act) has provided that a candidate at an election has to disclose certain information about whether he/she is:

Accused of any offence punishable with imprisonment for a period of 2 years or more in a pending case in which a charge has been framed by a court of competent jurisdiction;

Convicted of certain offences, other those under the Dowry Prohibition Act, 1961 as amended thereof, the Prevention of Corruption Act, 1988 as amended thereof, etc, and sentenced to imprisonment for a period of 1 year or more.

In view of the aforesaid Judgment passed by the Hon’ble Supreme Court in Lok Prahari case (supra), the ECI has incorporated the following instructions in the said Schedule:

The candidates with criminal antecedents are required to publish information about their criminal antecedents in newspapers and in television channels on three occasions during the campaign period.

Further, any political party that sets up candidates with criminal antecedents is also required to publish information about the criminal background of its candidates in their website, in newspapers and in television channels on three occasions.

Thus, this may enable a voter to cast a vote in favour of a worthy candidate at election in India based on proper rationale and reasoning.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

GOVERNMENT OF INDIA INTRODUCES MEASURES FOR GREEN AND DIGITAL MOBILITY IN INDIA 2019

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Recently, Prime Minister of India, Shri Narendra Modi has launched a National Common Mobility Card (NCMC) on 05.03.2019 in India. This would operate as a One Nation One Card for transport mobility in India, which is said to be the first of its kind in India.

The NCMC Card would be issued by banks in form of a debit/credit/prepaid card. This single NCMC Card may be used by the customer to make payments for travel by bus, metro, suburban railways, and other transport systems, for toll and parking, for payments on e-commerce websites, retail shopping, etc. The NCMC Card also supports monthly passes, season tickets, etc. This digital system aims to address the issues of cash payments, fare collection, operating cost, etc.

Further, the Government has introduced green mobility measures in the form of electric and hybrid vehicles to curb environment pollution. Reportedly, various vehicle manufacturers including luxury cars such as Porsche, Audi E Tron, Mercedes-Benz, etc are soon set to launch green and eco-friendly vehicles in India. In fact, the State of Telangana has already launched around 40 electric buses in Hyderabad last week.

These Government measures to make mobility in India greener and convenient would gradually improve the way in which people travel in India and it would also lead to higher digital payments penetration in the country.

Harini Daliparthy

Senior Associate

The Indian Lawyer

SUPREME COURT OF INDIA HOLDS NO LIMITATION PERIOD FOR DECLARATION OF MARRIAGE AS VOID

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The Supreme Court of India in the case of Swapnanjali Sandeep Patil vs Sandeep Ananda Patil, has passed a judgement dated 06.03.2019 holding that one needs no limitation period to seek declaration of a marriage as null and void.

In the above case Mrs. Swapnanjli Sandeep Patil (Appellant – wife) got married to Mr. Sandeep Ananda Patil (Respondent – husband) on 05.04.2010. The Appellant – wife in her complaint stated that the Respondent – husband started drinking and harassing her in numerous ways so the Appellant – wife left the house on 30.06.2012 and started dwelling with her parents. Before leaving the Respondent – husband’s house, she found a copy of Marriage Dissolution Deed dated 10.12.2009 between the Respondent – husband and his first wife.

Further, the Appellant – wife filed a Petition in the District Court of Pune under Section 25 of the Special Marriage Act, 1954 (the Act) for the declaration of marriage as null and void as the Respondent – husband had obtained consent for marriage by fraud, then she further added that she was not aware of the first marriage and the respondent – husband had declared himself as a bachelor in the marriage documents. The District Court of Pune dismissed the Petition by order dated 01.12.2014 stating that the ill-treatment by the husband and consent for marriage obtained by fraud cannot be the grounds under section 25 of the Act. The Court further held that the Petition was beyond limitation one year as per Section 25 of the Act.

The Appellant – wife dissatisfied by the judgment of the District Court appealed before the Bombay High Court. The High Court of Bombay by its order dated 09.03.2016 stated the same reasons given by the District Court. Dissatisfied by the judgement of the High Court the Appellant – wife appealed in the Supreme Court of India.

The Apex Court held that both the Trial Court and High Court have made an error in observing that the matter was filed beyond the period of limitation. The Court further held that the Courts above ought to have considered Section 24 read with Section 4 of the Act which states that a marriage will be void if the Respondent – husband already has a living spouse. The Court further held that the Courts above ought to have considered that at the time of Appellant – wife’s marriage with the Respondent – husband, the Respondent – husband’s first marriage was subsisting and had a living spouse so therefore, the marriage between the Appellant – wife and Respondent – husband would be null and void. The Apex Court added that no limitation is prescribed so far as to presentation of petition under Section 24 of the Act to declare a marriage as null and void.

The Supreme Court of India while deciding the matter has declared that there is no limitation in case of a void marriage and declared the marriage between Appellant – wife and Respondent – husband as null and void.

Suchit Patel

Associate

The Indian Lawyer

 

GOODS AND SERVICES TAX RATES SLASHED FOR REAL ESTATE SECTOR IN INDIA

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With the impending Lok Sabha elections, it seems that the Government is addressing the plight of people. The Government has recently, slashed the GST rates for under-construction residential properties and affordable housing projects which has brought some relief to the home buyers to purchase a residential property at lower rates.

The Goods and Service Tax (GST) Council has slashed the current tax rate of 12% on under-construction residential properties and 8% on affordable housing projects. However, the new applicable GST rate w.e.f. 1st April, 2019, for affordable housing project shall be 1% and under-construction residential properties shall be 5%.

While announcing the slashed rates, the Union Finance Minister, Mr. Arun Jaitley stated that “The move will provide a boost to the real estate sector. The sector is burdened with a huge inventory. The cuts would make owning a home cheaper for the common man.”

However, with a view to regulate the sector which is ridden with cash transactions and black money and the wide profits margins of the builders, the Government has withdrawn the Input Tax Credit benefit available to the builders. The builders will now not be able to claim the Input Tax Credit which they were allowed with tax slabs prior to the new ones.

In addition to above new rates, the Government has furthermore created more conditions for the affordable housing projects wherein the houses have been divided in two categories, which are as follows:-

  • Houses in Metro Cities(Delhi/NCR, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore)- affordable housing properties shall be those of worth Rs. 45 Lakh and 60 sq. mtr carpet area
  • Houses in non-metro cities- affording housing properties shall be those of worth Rs. 45 Lakh and 90 sq. mtr.

As per the estimates, currently there are 6 Lakh unsold under-construction homes, out of which 35% are priced below 40 Lakh. As the GST Council has brought houses worth 45 lakh, subject to above-mentioned carpet area, within affordable housing category, more houses will come under it and shall give relief to the common man.

In order to cater to the new rates, the transition rules shall be drawn up and taken up by the GST Council in next upcoming meeting. Initially there was backlash against the changed rates, but the real estate players are now in agreement with the GST Council’s decision and agree that this will increase the demand and sales of under-construction properties. However simultaneously, the builders worry that the move may affect the profits on the supply side due to withdrawal of input tax credit.

Sanjana Bakshi

Senior Legal Associate

The Indian Lawyer

GOVERNMENT OF INDIA INAUGURATES CIVIL AVIATION INFRASTRUCTURE PROJECTS IN INDIA

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The Minister of Civil Aviation, India, Shri Suresh Prabhu, has recently inaugurated a number of infrastructure projects across 7 states in India on 22.02.2019. The Government has planned to develop, upgrade and revamp the airport infrastructure in India across Trivandrum and Calicut (Kerala), Mangaluru (Karnataka), Madurai (Tamil Nadu), Rupsi (Assam), Jaipur (Rajasthan), Amritsar (Punjab) and Imphal (Manipur).

The Government has committed towards an improved aviation connectivity as it would boost tourism sector in India and trade between countries. For instance, the development of airport in Imphal would open up the entire South East Asia sector, thereby making way for increased tourism and trade with India. Thus, the Government has planned to invest Rs. 620 Crore for upgradation of infrastructure of 8 airports of Airports Authority of India (AAI).

The Government has aimed at development of aviation infrastructure, especially, in the North-Eastern states of India. Therefore, in the recent launch of Ude Desh ka Aam Naagrik, UDAN 3.1 Round of Bidding under the Regional Connectivity Scheme around February 2019, the Ministry of Civil Aviation has invited bids for airlines to cover about 28 to 30 routes across the North-Eastern region of India including the hilly terrain of Uttarakhand, Jammu, Himachal Pradesh and to establish intra island connectivity at Andaman and Lakshadweep islands.

Further, in the Aviation Conclave 2019, the Minister had stated that aircraft manufacturing, aircraft leasing and financing, cargo policy and financial services, etc are areas of high importance for aviation sector and also that drone ecosystem may offer a greenfield opportunity to the aviation sector.

Thus, the Government has made an estimate of USD 40 to 50 Billion (Approx. INR 2839 to 3549 Billion) investment for all round development and construction of around 200 airports in order to cater the huge passenger traffic in India and to scale up aviation sector in India. This may help the Government to bring about a revolution in the Indian aviation sector.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer