DELHI HIGH COURT ALLOWS DAMAGES TO GLOBAL SOFTWARE COMPANIES FOR COPYRIGHT INFRINGEMENT

The Delhi High Court has recently passed a Judgment dated 26-05-2020 in Microsoft Corporation and Others vs Satveer Gaur and Anr, where the #Court held the Defendants liable for #copyrightinfringement of the Plaintiff’s #softwares.

In the present case, #Microsoft Corporation, USA, Microsoft Corporation Pvt Ltd, India, #Adobe Systems, USA, #Quest Software Inc, USA (Plaintiffs) had filed a suit in the Delhi High Court seeking permanent #injunction, thereby, restraining the Defendants and their officers, employees, etc from use, reproduction and distribution of #pirated/counterfeit/unlicensed softwares of the Plaintiffs; to hand over such pirated software to the Plaintiffs; to return the unfair and illegal profits generated with unauthorised and unlicensed use of Plaintiff’s software; and to allow damages and costs to the Plaintiffs.

The Delhi High Court made the following observations in this case:

1- That the Plaintiffs are renowned and well-established global software companies that enable the users to purchase license to their softwares and use it in an efficient and effective manner. Their business is spread across various continents and they generate high global #revenues.

2- The Plaintiff’s softwares are protected under the Copyright Act 1957 (the Act) and thus, the owners of these softwares have exclusive right to the softwares and the income generated thereof.

3- That the Defendants are engaged in the business of reproducing or burning the Plaintiff’s software in compact discs (CDs) hard disks, etc; installation and operation of pirated software in computer systems; and reproducing the Plaintiff’s software in such a manner that purchasers believe that it is a genuine software.

4- That certain #investigators and the Local #Commissioner appointed by the Court conducted investigation at the Defendant’s place of business. Their report stated that the Defendants could not produce any license, invoice, or any other document to show the legal and authorised use of the Plaintiff’s software. Thus, the Local Commissioner seized around 51 computers containing the infringed software.

5- That the unauthorised use of Plaintiff’s softwares by the Defendants has caused immense loss to the goodwill, reputation and business of the Plaintiffs and has further caused infringement of Copyright of the Plaintiffs.

Thus, the Court passed an Order of Permanent Injunction to restrain the Defendants, their directors, officers, employees, agents, etc from directly or indirectly engaging in any kind of computer related activities; using, reproducing and distributing pirated/unlicensed/unauthorised softwares of the Plaintiffs, and/or any other activity infringing the Copyright of the Plaintiffs. The Plaintiffs were also handed over the seized goods for destruction within 2 months from the date of this Judgment. Further, the Court allowed damages of Rs. 30 Lakhs to be equally shared by and between the Plaintiffs.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

DELHI HIGH COURT REJECTS COVID-19 AS A PLEA FOR BREACH OF CONTRACT

The Delhi High #Court has recently passed a Judgment dated 29-05-2020 in M/S Halliburton Offshore Services Inc. vs #Vedanta Limited and Anr., where the Court held that the Petitioner, M/S #Halliburton Offshore Services Inc, USA, cannot take the plea of force majeure to justify non-performance of its contractual obligations.

In this case, the Petitioner and the Respondent had entered into a Contract dated 25-04-2018 (#Contract) which provided that the Petitioner had to construct an oil well and develop surface facilities (#Project). The Contract had sub-divided the Project into three sub-projects, namely, Mangala, Bhagyam and Aishwarya, which had a fixed commencement date and completion dates. Although, the Petitioner had warranted and guaranteed that it would complete the Project within the fixed #deadlines, but it failed to do so. Thus, the Parties had to extend the deadlines on multiple occasions as given below:

PROJECT NAMECOMMENCE- MENT DATECOMPLETION DATEEXTENDED DATEFURTHER EXTENDED DATE
1. Mangala17-01-201816-01-201931-01-202031-03-2020
2. Bhagyam17-01-201816-03-201929-02-202031-03-2020
3. Aishwarya17-01-201816-06-201931-03-202031-03-2020

But as the Petitioner still could not finish the Project within the extended deadlines, it invoked the Force Majeure Clause in the Contract to seek further extension, on the ground of Covid-19 and Lockdown situation, vide Letter dated 18-03-2020. But the Respondent proposed to the Petitioner to terminate the Contract on 31-03-2020 and 07-04-2020. As a result, the Petitioner invoked the Arbitration Clause in the Contract (Arbitration) and also filed a Petition under Section 9 of Arbitration and Conciliation Act 1996 as amended thereof on 13-04-2020 (Petition) before the Delhi High Court seeking interim relief to restrain the Respondent from taking any coercive action including invoking bank guarantees against the Petitioner. On the same day of 13-04-2020, the Respondent terminated the Contract.

The Delhi High Court held that every #breach or non-performance of contract cannot be excused on the ground of #Covid19, i.e. a #ForceMajeure condition. As per the Supreme Court case of Energy Watchdog vs Central Electricity Regulatory Commission (2017) 14 SCC 80, the Apex Court held that courts cannot absolve the parties from performing the contract and that parties must adhere to the contractual terms and conditions. The courts can excuse non-performance only in certain exceptional circumstances.

Thus, the Delhi High Court held that a court has to assess the following factors to determine whether a party was genuinely prevented from performing the contractual obligations due to the outbreak of an #epidemic/pandemic:

  1. Conduct of all the parties to the contract, prior to the outbreak of epidemic/pandemic,
  2. Deadlines set forth in the contract,
  3. Steps to be taken and
  4. Compliances to be made.

In view of the aforesaid factors, the Delhi High Court made the following observations in this case:

1- That the Project was time sensitive, as there were fixed commencement dates and completion dates. Thus, time was the essence of the Contract.

2- That the monthly progress since September to December 2019, and January and March 2020 showed that there was little or no work by the Petitioner in terms of the Project. Thus, the work had stopped long before the Covid-19 and Lockdown situation had occurred.

3- That the Petitioner had failed to complete the three sub-projects within their respective fixed deadlines. This establishes that the Petitioner had committed breach of Contract much before the Covid-19 and Lockdown situation had arisen.

4- Therefore, it cannot be said that the Petitioner was prevented/hindered/delayed by the Pandemic from executing timely performance of its contractual obligations. Thus, the Petitioner cannot take the plea of Force Majeure to justify the non-performance or breach of the Contract.   

The Delhi High Court held that although several opportunities were given to the Petitioner to cure the breach much before the outbreak of the Pandemic, it failed to complete the Project. Thus, the past non-performance of Contract by the Petitioner could not be condoned or excused due to occurrence of Covid-19 and Lockdown in March 2020. Therefore, the Court held that there was no justified reason to restrain the Respondent from encashing bank guarantees against the Petitioner and that all other claims would be adjudicated in the Arbitration proceedings.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

SUPREME COURT OF SINGAPORE DISMISSES RANBAXY CHALLENGE OF AWARD IN FAVOUR OF DAIICHI SANKYO

The long battle fought between the previous owners of #Ranbaxy Laboratories Limited (“RLL Company”) and the Japanese multi-national pharmaceutical company, #Daiichi Sankyo Company Ltd (“DSC”’) has finally being decided by the #Singapore Court of Appeal vide Judgment dated 28.05.2020 in favour of DSC making RLL liable to pay the awarded sum of INR 25 billion to DSC.  

An appeal was preferred by RLL, seeking quashing of the Singapore High Court’s Judgment that upheld the INR 25 billion #Arbitration Award in favour of DSC vide Judgment dated 28.05.2020 (the “Judgment”).

FACTS LEADING TO THE CASE

The dispute arose due to the sale and purchase of a controlling 64% stake of the shares (“the Shares”) in the Company, RLL, which was said to be India’s largest manufacturer of generic pharmaceutical products. The buyer was DSC, a Japanese corporation (the “Buyer”). The sellers comprised the family members of RLL’s founder and several companies controlled by them (“the Sellers”). The Sellers were led by Mr Malvinder Singh and Mr Shivinder Singh (the “Singh Brothers”), relatives of RLL’s founder (“the Parties”).

Background to the Proceedings

In and around 2007, DSC approached the Singh Brothers to negotiate the purchase of the #Shares. The Parties signed the Sale and Purchase Agreement (the “SPA”) in 2008. Accordingly, DSC paid around INR 198 billion (about USD 4.6 billion) to the Sellers for the Shares.

The dispute that led to the arbitration arose over an internal report (the “Report”) which DSC alleged that the Sellers had concealed from it. The Report was issued in 2004, detailing how RLL engaged in data falsification to expedite the obtaining of regulatory approval for numerous drug products around the world. Immediately, after signing of SPA, DSC discovered that the Singh Brothers made false representations to them by concealing said Report and severity of pending investigations by the United States Department of Justice (“DOJ”) and the United States Food and Drug Administration (“FDA”), against the RLL. The result of such investigation by the DOJ and FDA, led to a settlement between the parties and RLL made provision for paying a settlement sum of USD 500 Million, in 2013. This resulted in DSC suffering direct and indirect losses as a result of entering into the SPA.

Therefore, the DSC commenced arbitration before the Singapore Arbitration Tribunal, against the Sellers under the SPA alleging misrepresentation and concealment of facts regarding the extent of the investigations by the DOJ and FDA. Resultantly, the Arbitral Tribunal made an award of about INR 25 billion by way of damages in favour of DSC. It was decided that the Sellers were jointly and severally liable for fraudulent misrepresentation under the Indian Contract Act 1872 (the “Award”).

In 2016, DSC initiated simultaneous proceedings for leave to enforce the Award before the Delhi High Court and the Singapore High Court. However, Singapore enforcement proceeding was concluded by an ex parte Order dated 18.05.2016.

During the period, the Sellers also filed Originating Summons (‘OS’) before the Singapore Court to set aside Ex parte Order dated 18.05.2016 and the Award. In 2018, the Singapore High Court dismissed the said OS and upheld the Award.

On the other hand, the enforcement proceedings before the Delhi High Court was concluded vide Judgment dated 31.01.2018. This was the landmark Judgment in the area of commercial contracts as the Court upheld an Award of an Arbitral Tribunal made in Singapore, in the commercial arbitration between the Parties.

Thereafter, the Singh Brothers filed simultaneous Appeals before the Supreme Court of India against the Delhi High Court Judgment dated 31.01.2018 and before the Singapore Court of Appeal against the Judgment of the Singapore High Court (the “Appeals” or the “Appellants”). However, the Supreme Court of India upheld the Delhi High Court Judgment dated 31.01.2018 by dismissing the Special Leave Petitions, in 2018.

The Singapore Court of Appeal also rejected the plea of the Appellants on 28.05.2020 while refusing to accept the stand of the Appellants that an egregious error of law in the making of an Award amounts to a breach of public policy and the finding of joint and several liabilities is such an error. It also said that it is the settled jurisprudence that mere errors of law do not cross the high threshold of making out a breach of Singapore’s public policy. Thus, all the grounds with regards to time bar issues, damages and interest issues, and joint and several liability issues, were rejected by the Court in its entirety. It also imposed costs of USD 1 lakh and USD 90, 000 on the Singh Brothers, respectively.

This Judgment from the Singapore Court of Appeal, brings to an end all appeals and related proceedings against the Arbitration Award. With this, recovery options are opened for Daiichi Sankyo in Singapore as well. This case and the Judgment is a good example of explaining the doctrine of limited liability. As it states that the doctrine does not limit shareholders’ liability in relation to torts committed by their agents in the sale of their shares.  

Lakshmi Vishwakarma

Associate

The Indian Lawyer & Allied Services

DELHI HIGH COURT SUPPORTS LANDLORDS DURING COVID-19 LOCKDOWN

The #DelhiHighCourt is the first High Court that has decided on the issue of #rent to be paid during the #Pandemic. It has recently passed a Judgment dated 21-05-2020 in Ramanand and Others vs. Dr. Girish Soni and Anr., where the Court rejected the Application filed by Appellant-Tenants for #suspensionofpaymentofrent, owing to the #Covid19 #Lockdown situation.

Facts-

In this case, the Respondent-#Landlord and the Appellant-Tenants executed a Lease Deed dated 01-02-1975, where the premises of Shop No. 30-A, Khan Market, New Delhi (#RentedProperty) was given on rent/lease. Later in 2008, the Landlord filed a Suit for Eviction before the Ld. Senior Civil Judge-cum-Rent Controller under the provisions of Delhi Rent Control Act 1958.

The Rent Controller passed an Order for Eviction dated 18-03-2017 (Eviction Order), which was challenged by the Tenants in the Rent Control Tribunal. The Tribunal also allowed the said Eviction Order. Thus, the Tenants filed a Revision Petition before the Delhi High Court in 2017 and challenged the said Eviction Order (Petition).

The Delhi High Court passed an Interim Order dated 25-09-2017 and stayed the execution of the Eviction Order, on a condition that the Appellant-Tenants pay a rent of Rs. 3.5 Lakhs per month with effect from October 2017 to the Respondent-Landlord, for continued use and occupation.

Thereafter, the Petition remained pending for hearing. Meanwhile, the Appellant-Tenants filed an Urgent Application in the Delhi High Court, seeking suspension of payment of rent, owing to the Covid-19 Lockdown situation (Application).

Issue-

Whether the Lockdown would entitle the Appellant-Tenants to claim waiver/suspension/ exemption from payment of rent to the Respondent-Landlord?

Judgment-

The Delhi High Court made the following observations, vide Order dated 21-05-2020:

1- Force majeure is an event that is beyond the control of the parties and includes both acts of nature such as earthquake, floods, etc and acts of people such as riots, strikes and war, etc.

2- Generally, the rights and obligations of lessor and lessee can be determined in the following manner:

i) If there is a contract between lessor and lessee-

a) And if the said contract contains a force majeure clause- Then, a force majeure clause may provide for any of the following options to the parties:

i. That the tenant may #waive/suspend the payment of rent, till the force majeure continues; or

ii. That the #tenant may claim that the contract has become void due to the force majeure event and that he may surrender the tenanted premises; or

iii. That the tenant may choose to retain the premises, but continue to pay rent or monthly charges even during the force majeure conditions.

In such a case, the parties have to abide by the contractual stipulations of the force majeure clause, in order to determine whether the tenant is liable to pay rent or is entitled to suspend the rent.

Further, Section 32 of the Indian Contract Act 1872 (Contract Act) governs such contracts that have clauses related to force majeure conditions.

b) If the said contract does not contain a force majeure clause-

Section 56 of the Contract Act governs contracts that do not have a force majeure clause and that have become impossible to perform, due to the occurrence of a force majeure event, in the following manner:

(i) The parties may plead frustration of contract, on the ground of impossibility of performance, destruction of the subject-matter of the contract, etc, due to the occurrence of a force majeure event, under Section 56 of the Contract Act.

(ii) But Section 56 applies only to executory contracts[1] and not to concluded transfers. This principle was discussed by the #SupremeCourt in Raja Dhruv Dev Chand v. Raja Harmohinder Singh & Anr., AIR 1968 SC 1024.

Thus, tenants are not entitled to claim waiver/suspension of rent, in case of executed contracts, such as lease agreements, under Section 56 of the Contract Act.

c) If the contract is in the nature of profit-sharing arrangement or based on sales turnover-

Then, the tenant may seek suspension/waiver of rent on the ground that there is no profit or sales turnover generated during the Lockdown situation.

ii) If there is no contract between lessor and lessee-

In such a case, Section 108 of Transfer of Property Act 1882 (TP Act) would govern the tenancies and leases, on the following grounds:

a) If the property has become substantially and permanently unfit for use or has been completely destroyed, then the lessee may have an option to avoid the lease. This principle has been discussed by the Delhi High Court in Sangeeta Batra v. M/s VND Foods & Ors., (2015) 3 DLT (Cri) 422.

b) But in case of temporary non-use of property by tenant, he cannot invoke Section 108 of the TP Act.

Thus, the temporary non-use of premises due to Lockdown cannot be construed as lease becoming void under Section 108 of the TP Act.

3) The Court referred to certain landmark judgments on the subject of force majeure and frustration of contract. Few cases have been given below:

i) Supreme Court: Energy Watchdog vs Central Electricity Regulatory Commission (2017) 14 SCC 80: Herein, the Apex Court held that a mere rise in price of fuel cannot be considered as a force majeure event and commercial hardship cannot be deemed to be a force majeure condition that makes the contract impossible to perform.

ii) Delhi High Court: Aranya Hospitality Management Service Pvt. Ltd. vs K.M. Dhoundiyal & Anr 2017 SCC OnLine Del 7645: In this case, the Delhi High Court did not allow the Appellant to take the excuse/plea of lack of water connection, as a force majeure event, to avoid payment of rent of the rented commercial space (restaurant) to the landlord. The Court directed the Appellant to either pay the rent due or cancel the agreement.

4) In the present case, the Court noted that there is no contractual stipulation related to force majeure condition or about suspension or waiver of rent in case of occurrence of a force majeure event. Further, Section 32 and 56 of the Contract Act are not applicable in this case, as the Delhi Rent Control Act 1958 is applicable.

5) The Court took into consideration the following facts before passing the Order in this case:

i) That the Rented Property is located in a well-known commercial area;

ii) That the monthly rent of Rs. 3.5 Lakhs for a commercial shop is very low in comparison to the current market rate;

iii) That reasonable compensation should be made to the Respondent-Landlord for the loss incurred due to the delay in execution of the Eviction Order.

6) The Court considering the aforesaid facts and principles of force majeure and frustration of contract, dismissed the Application for suspension of rent and passed the following Order:

(i) That the Tenants are liable to pay use and occupation charges to the Landlord for the Rented Property, in the following manner:

(a) For March 2020- payment to be made by 30-05-2020;

(b) For April and May 2020- payment to be made by 25-06-2020;

(c) From June 2020 onwards- payment as per Interim Order dated 25-09-2017.

(ii) That the Interim Order directing the Tenant to pay Rs. 3.5 Lakhs per month since October 2017, would continue. In case, the Tenant fails to pay, then the Eviction Order would be executed.

This Judgment of the Delhi High Court happens to be the first in the Covid-19 situation that deals with the issue of landlord and tenant rights and whether Covid-19 can be pleaded as a force majeure condition allowing the tenant to stop paying the rent. The Court was clear that if the tenant was in possession of the premises which was in habitable condition, the tenant was bound to pay the rent. It further held that since the Lease Agreement was an executed contract, the Tenant was bound by the terms of the said Contract and had to fulfil his contractual obligations and pay the rent that had accrued during the Covid-19 period.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer


[1] Executory contracts are those contracts that have not yet been fully performed or fully executed.

RBI ANNOUNCED EXTENSION OF MORATORIUM ON LOANS TO SAVE THE ECONOMY FROM PANDEMIC IMPACT

To lessen the double impact of lower #production on #economy and its participants, due to Covid-19 Pandemic, Mr. Shaktikanta Das, Governor, Reserve Bank of India (#RBI), announced various developmental and regulatory policy measures to improve the functioning of markets and market participants, vide Press Conference on 22.05.2020.

The said announcements were a result of suspension of Insolvency and Bankruptcy Code (#IBC), provisions as well as extension of the Lockdown. Likewise, sections 7, 9 and 10 of IBC, which enables creditors to initiate Corporate Insolvency Resolution Proceedings (#CIRP), are suspended for the period of one year to stop companies from being pushed into insolvency proceedings. The Government also excluded any debt arising out of circumstances created by the #Pandemic, from the definition of ‘default’ under the Insolvency and Bankruptcy Code (IBC). Official notification and/or resolution from the Corporate Ministry or relevant authorities are to be notified.

Consequently, the RBI in an effort to deal with defaulters during Covid-19 has taken steps to soften its restructuring and provisioning norms to deal with stressed assets. Therefore, in view of the extension of the Lockdown and continuing disruptions on account of Covid-19, RBI extended the moratorium period for interest payments on term loan instalments by another three months, i.e., from 01.06.2020 to 31.08.2020. The measures to support exports and imports, and efforts to further ease the financial stress, caused by COVID-19 disruptions have been taken care of by providing relief on debt servicing and improving access to working capital.  Further, the steps to ease financial constraints faced by State Governments are also considered. The below-mentioned table contains the details of various developmental and regulatory policy measures, recently announced by the RBI.

MEASURESFOCUS AREAS
I. Measures to Improve the Functioning of Markets1- Refinancing Facility for Small Industries Development Bank of India (SIDBI)   The RBI had announced a special refinance facility of ₹15,000 Crore to SIDBI for on-lending/refinancing to ensure the accurate delivery of long-term funding requirements of Small industries.   Advances under this facility were provided at the RBI’s policy Repo Rate at the time of availment for a period of 90 days. In order to provide greater flexibility to SIDBI in its operations, it has been decided to roll over the facility at the end of the 90th day for another period of 90 days.      

2- Investments by Foreign Portfolio Investors (FPIs) under the Voluntary Retention Route (VRR)   The VRR facilitates long term and stable FPI investment in debt and offers operational flexibility in 2 terms of instrument choices and exemptions from certain regulatory requirements. In view of difficulties expressed by FPIs and their custodians on account of COVID-19 related disruptions in adhering to the condition that at least 75 per cent of allotted limits be invested within three months. It has been decided that an additional three months will be allowed to FPIs to fulfill this requirement.  
II. Measures to Support Exports and Imports- In view of the importance of exports in earning foreign exchange and in providing income and employment; and of imports in bringing in essential requirements of raw materials, intermediates, finished goods and technology, measures are being taken to support the foreign trade sector  3- Export Credit   Exporters have been facing difficulties such as delay/ postponement of orders and delay in realisation of bills, which are adversely affecting their production and realisation cycles.   It is in this context that the RBI permitted an increase in the period of realization and repatriation of export proceeds to India from nine months to 15 months from the date of export in respect of exports made up to or on 31.07.2020.   It has now been decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing, 1 year to 15 Months, for disbursements made up to 31.07.2020.  

4- Liquidity Facility for Exim Bank of India  
In view of the COVID-19 pandemic, as the Export-Import (Exim) Bank of India, predominantly relies on foreign currency resources raised from international financial markets for its operations, it is facing challenges to raise funds in international debt capital markets. Accordingly, it has been decided to extend a line of credit of ₹15,000 Crore to the Exim Bank. This is for a period of 90 days from the date of availment with rollover up to a maximum period of one year, so as to enable it to avail a US dollar swap facility to meet its foreign exchange requirements.  

5- Extension of Time for Payment for Imports
Cross-border trade has imposed slowdown in manufacturing/sale of finished products, and delay in realisation of sale proceeds, both domestically and overseas.   In turn, this has elongated the operating cycle for business entities. In this situation, units find it difficult to pay for their imports within the time stipulated under the Foreign Exchange Management Act (FEMA). At present, remittances for normal imports (excluding import of gold/diamonds and precious stones/jewellery) into India are required to be completed within a period of six months from the date of shipment by the overseas supplier, except in cases where amounts are withheld towards guarantee of performance.   It has been decided to extend the time period for completion of remittances against normal imports into India (except in cases where amounts are withheld towards guarantee of performance) from 6 Months to 12 Months from the date of shipment for such imports made on or before 31.07.2020.   The measure will provide greater flexibility to importers in managing their operating cycles in a COVID-19 environment.  
III. Measures to Ease Financial Stress6- Moratorium on Term Loan Instalments RBI permits lending institutions to extend the moratorium on term loan instalments by another three months, i.e., from 01.06.2020 to 31.08.2020. Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, may be shifted across the board by another three months.

7- Deferment of Interest on Working Capital Facilities   In respect of working capital facilities, lending institutions are being permitted to allow a deferment of another three months, from 01.06.2020 to 31.08.2020, in addition to the three months allowed on 27.03.2020 on payment of interest in respect of all such facilities outstanding as on 01.03.2020.

8- Payment of Interest on Working Capital Facilities for the Deferment Period   Borrowers in repaying the accumulated interest for the deferment period on working capital facilities in one shot, lending institutions are permitted to convert the accumulated interest on working capital facilities over the deferment period (up to 31.08.2020) into a funded interest term loan which shall be repayable not later than the end of the current financial year (i.e., 31.03.2021).        

9- Asset Classification   The reliefs provided in Point Nos. 6, 7, and 8; the same will not be treated as changes in terms and conditions of loan agreements due to financial difficulty of the borrowers and, consequently, will not result in asset classification downgrade.   In respect of all accounts for which lending institutions decide to grant moratorium/deferment, and which were standard as on March 1, 2020, the 90-day NPA norm shall also exclude the extended moratorium/deferment period. Consequently, there would be an asset classification standstill for all such accounts during the moratorium/deferment period from 01.03.2020 to 31.08.2020. Thereafter, the normal ageing norms shall apply.   NBFCs, which are required to comply with Indian Accounting Standards (IndAS), may follow the guidelines duly approved by their Boards and advisories of the Institute of Chartered Accountants of India (ICAI) in recognition of impairments. Thus, NBFCs have flexibility under the prescribed accounting standards to consider such relief to their borrowers.  

10- Easing of Working Capital Financing   Lending institutions are permitted to recalculate the ‘drawing power’ by reducing the margins till the extended period, i.e., 31.08.2020.   They are also permitted to reassess the working capital cycle of a borrowing entity up to an extended period till 31.03.2021.  

11- Extension of Resolution Timeline   Under the Prudential Framework, lending institutions are required to hold an additional provision of 20 per cent in the case of large accounts under default if a resolution plan has not been implemented within 210 days from the date of such default. Given the continuing challenges to resolution of stressed assets, lending institutions are permitted to exclude the entire moratorium/deferment period from 01.03. 2020 to 31.08.2020 from the calculation of 30-day Review Period or 180-day Resolution Period, if the Review/Resolution Period had not expired as on 01.03.2020.    

12- Limit on Group Exposures under the Large Exposures Framework   To facilitating the flow of resources to corporates, it has been decided, as a one-time measure, to increase a bank’s exposure to a group of connected counter parties from 25 per cent to 30 per cent of the eligible capital base of the bank. The increased limit will be applicable up to June 30, 2021.  
IV. Debt Management13- Consolidated Sinking Fund (CSF) of State Governments – Relaxation of Guidelines   The RBI has reviewed the Scheme and has decided to relax the rules governing withdrawal from the CSF, while at the same time ensuring that depletion of the Fund balance is done prudently. This will enable States to meet a larger proportion of their redemption of market borrowings falling due in the current financial year from the CSF. These relaxations to states will release an additional amount of about ₹13,300 Crore. This change in withdrawal norms will come into force with immediate effect and will remain valid till 31.03.2021.  

Lakshmi Vishwakarma

Associate

The Indian Lawyer & Allied Services

TIL Legal Speak Episode 3: Introduction to Legal Research by Advocate Sushila Ram Varma

#Legalresearch is one of the aspects of study of human behavior, their interactions, attitude pertaining to any law under the #research studies.

Thus, the Indian Lawyer & Allied Services in collaboration with Lawyered brings before you the Episode 3 of TIL Legal Speak, which is about ‘Introduction to Legal Research’.

This Episode has also featured on Lawyered under the title: ‘ #AskMyMentor on Introduction to Legal Research by Advocate Sushila Ram Varma ‘.

To view this Episode, please visit the link below:

Video Credits: Speaker- Adv. Sushila Ram Varma, Chief Consultant, The Indian Lawyer & Allied Services

Moderator- Purnima Khanna, Lawyered Category: Legal

ATMANIRBHAR BHARAT ABHIYAAN FIFTH AND FINAL ECONOMIC STIMULUS PACKAGE 2020-21

The Union Government Finance Minister, Mrs Nirmala Sitharaman announced the fifth and final tranche of its #Covid19 economy revival #package under Atmanirbhar Bharat Abhiyaan, on 17.05.2020. The focus of this Part of the #EconomicReliefsPackage 2020-21 is on the Government reforms and enablers.

This Part covered the seven steps that are being taken by the Government with regard to reforms in MGNREGS, healthcare and education, businesses, de-criminalisation of the Companies Act, ease of doing business, public sector undertakings, and resources related to State Government. The keys points of the final tranche are mentioned below:

KEY AREASPART-5TH OF ECONOMIC RELIEFS PACKAGEDETAILS
1. Ease of Doing BusinessReforming  Governance for Ease of Doing Business   Ease of Doing Business for Corporates  Government announced that globally potential investors look at a country’s Doing Business Report ranking. It stated that sustained measures taken have resulted in steadily improving India’s position in World Bank’s Doing Business Report rank from 142 in 2014 to 63 in 2019   This included streamlining processes such as granting of permits and clearance, self-certification and third party certification among others.   It was also announced that Government is working on a mission mode on the next phase of Ease of Doing Business Reforms relating to easy registration of property, fast disposal of commercial disputes and simpler tax regime for making India one of the easiest places to do business.   Government announced that direct listing of securities by Indian public companies in permissible foreign jurisdictions, private companies which list NCDs on stock exchanges not to be regarded as listed companies.   Power to create additional/specialized benches for NCLAT;   Lower penalties for all defaults for Small Companies, One person Companies, Producer Companies Start Ups.  
2. De-criminalisation of the Companies ActRecent Corporate Law measures to boost Measures for Ease of Doing BusinessIn the first phase of decriminalization of Company Law, 16 compoundable offences were shifted to an in house adjudication penalty mechanism;Integrated Web based Incorporation Form placed online;Databank of Independent Directors launched;Withdrawal of more than 14 000 prosecutions under the Companies Act, 2013;Rationalization of Related Party Transaction related provisions;Timely Action during COVID 19 to reduce compliance burden under various provisions of the Companies Act, 2013;In 221 resolved cases, 44 Recovery has been achieved since inception of IBC, 2016;Under IBC, 13,566 cases involving a total amount of Rs 501 lakh Crores (Approx have been withdrawn before admission under provisions of IBC till 29.02.2020.  
3. EducationTechnology driven Systems Online Education during COVIDEducation at all level has been upgraded to increase its reach to the public at large.  Government announced that provision made for telecast of live interactive sessions on these channels with experts from home through Skype.   A programme for multi-mode access to digital/online education to be launched immediately. And various other measures have been announced to make education more digitally accessible.  
4. BusinessFurther enhancement of Ease of Doing business through IBC related measuresGovernment stated that minimum threshold to initiate insolvency proceedings raised to Rs 1 Crore (from Rs 1 lakh, which largely insulates MSMEs). It announced that special insolvency resolution framework for MSMEs under Section 240A of the Code to be notified soon.   The major announcement as a relief is announced by the Government by suspension of fresh initiation of insolvency proceedings up to one year depending upon the Pandemic situation.   It further announced that during the COVID 19 all related debts are excluded from the definition of “default” under the IBC for the purpose of triggering insolvency proceedings.  
5. Public Sector Enterprise PolicyPublic Sector Enterprise Policy for a New, Self reliant IndiaA new coherent policy where all sectors are open to the private sector while Public Sector Enterprises (PSEs) will play an important role in defined areas. Accordingly Government will announce a new policy whereby list of strategic sectors requiring presence of PSEs in public interest will be notified.   In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed. In other sectors, PSEs will be privatized  

This final Part of the Economic Reliefs Package 2020-21 and focus is being given to “ease of doing business” for attracting foreign direct investment (FDI) and enthusing private capital. It is hoped that this would help the Country to jump start the Economy post Covid-19.

Lakshmi Vishwakarma

Associate

The Indian Lawyer & Allied Services

GOVERNMENT PLANS TO INCREASE PRIVATE SECTOR PARTICIPATION IN CRUCIAL SECTORS OF THE ECONOMY

Recently, the Minister of Finance, Smt. Nirmala Sitharaman, announced certain #Government reforms and #EconomicReliefPackages under #AtmaNirbharBharatAbhiyaan (the Self-Reliance Movement), on 16-05-2020. This Movement aims to achieve #economic #selfreliance by promoting #indigenous manufacture, production, and distribution of goods and services.

Under the Atma Nirbhar Bharat Abhiyaan (i.e. the Self-Reliance Movement), the Government plans to take the following measures:

1- To introduce fast track #investment clearances through Empowered Group of Secretaries (EGoS).

2- To set up a Project Development Cell in each Ministry to prepare a list of investible projects, and to coordinate with investors and Central/ State Governments.

3- To rank all States based on investment attractiveness.

The highlights of the Economic Relief Packages as announced by the Minister of Finance are as follows:

SECTORDETAILS OF THE ECONOMIC RELIEF PACKAGE  
1. Solar Photovoltaic  TechnologiesThe Government plans to introduce incentive schemes to encourage investments in manufacturing of Solar Photovoltaic (PV) technologies. This is a technology that converts sunlight or solar radiation into electricity by using semiconductors.   
2. CoalThe Government plans to encourage private sector participation in coal production, exploration of coal blocks, mechanised transfer of coal from mines to railway sidings, etc.  
3. Minerals  i) The Government would introduce improved exploration-cum-mining-cum-production regime in the mineral sector.  

ii) The Government would, further, remove distinction between captive and non-captive mines. These mines would be allowed to transfer mining leases and to sell surplus unused minerals.  

Captive mines are those mines that produce coal or mineral for use by the same company.
4. Defencei) The Government plans to increase self-reliance in defence production through indigenisation of defence products, ban on import of certain weapons, improve in supply of ordnances, etc.  

ii) The Government plans to raise the foreign direct investment (FDI) limit in defence manufacturing sector, from 49% to 74%, under automatic route.  
5. AirspaceThe Government would soon ease the restrictions on use of Indian airspace by civil aircrafts. Thus, more air space availability would reduce the travel time, which would bring down the cost of fuel and the cost of travel.  
6. Airportsi) The Government plans to provide increased investment opportunities to private players in the airport sector under Public-Private Partnership (PPP) basis.  

ii) Also, global engine manufacturers would be encouraged to set up engine repair facilities in India.  

iii) Further, the Government plans to converge the maintenance, repair and overhaul (MRO) facilities of both defence and civil aviation sectors. This would reduce the burden on the defence sector and provide increased employment opportunities in MRO facility.  
7. PowerThe Government plans to privatise power distribution departments in Union Territories. This would lead to better services to consumers and improvement in efficiency of power distribution.  
8. Social Infrastructure  The Government plans to increase the quantum of Viability Gap Funding (VGF), in social infrastructure projects, up to 30% each of Total Project Cost as VGF by Centre and State/Statutory Bodies.  

Social infrastructure generally involves construction and maintenance of facilities that support social services, such as construction of hospitals for healthcare services, schools for educational services, etc.  

VGF is a grant to support projects that are economically justified, but fall short of finance.  
9. Spacei) The Government plans to increase private sector participation in the space sector, i.e. in satellites, launches and space-based services, planetary exploration, outer space travel etc.  

ii) Further, the Government would soon allow private players to use Indian Space Research Organisation (ISRO) facilities to improve their capacities in space sector.  
10. Nuclear SectorThe Government plans to link the start-up ecosystem to the nuclear sector by setting up Technology Development cum Incubation Centres. These Centres would connect the research facilities of the nuclear sector and the tech-entrepreneurs.  

Under the Atma Nirbhar Bharat Abhiyaan (i.e. the Self-Reliance Movement), the Project Development Cell in each Ministry would guide investors about the projects available for investments. This would enable the investors to choose their preferred area and sector of investment. Thus, these Government measures may lead to increased private sector involvement and revival of economic growth.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

CURBING FRIVOLOUS CRIMINAL LITIGATION: NEED FOR AMENDING Cr.P.C.

It has become a regular feature in our country for busybodies to file #complaints in remote corners of the country against #public figures such as film stars, sports persons, politicians, poets, painters etc., on the ground that they had defamed someone, or hurt the feelings of religious group, or that they had even committed #sedition.  The object of filing these complaints appears to be to only gain publicity in the media and harass the public figure.  It is an abuse of the process of law.

As soon as an #FIR (First Information Report) is registered by the #police, it is given wide publicity both in electronic and print media. This results in heated discussions in the news rooms spreading hate and distrust. Ultimately, most of these complaints are dismissed by the Courts.  The registration of these frivolous FIRs calls for an immediate revamp of the Code of Criminal Procedure.

          The registration of more than 100 identical FIRs against Arnab Goswami in a single day in several Congress ruled States of the country, for allegedly defaming Smt. Sonia Gandhi, expose the utter misuse of the provisions of Code of Criminal Procedure Code (Cr.P.C.) and Indian Penal Code (I.P.C).   

          It is a different matter that Arnab Goswami was able to move the Supreme Court immediately and obtain interim orders to prevent the police from taking any coercive measures against him in all the cases except one, and has since been interrogated for several hours in connection with the said alleged offence. 

Subsequently, an FIR was registered against a #SupremeCourt Advocate Prashant Bhushan in Rajasthan on the basis of a tweet posted by him which some retired Army officer had found offensive.  He too had to hurriedly knock the doors of the Supreme Court and obtain orders from the Supreme Court to prevent the police from arresting him.

Several FIRs have been registered against Rahul Gandhi for his remarks against RSS, and Rahul Gandhi is appearing before the concerned courts as accused.  

In the State of Andhra Pradesh an FIR was filed against the then Union Home Minister for failing to honour his promise to provide Statehood  for Telangana and an FIR for  “ cheating ”  was registered.    

Generally,  all the public figures are  fortunately well connected and have easy access to justice therefore they move the High Court / Supreme Court and get the frivolous FIRs quashed.  But even for the well heeled this is a needless mental harassment besides considerable expenditure and waste of time. The complainant,  looses nothing except going to the Police Station for a day or two  to lodge  the complaint.  These type of frivolous cases, are consuming precious time of the Courts. 

          Now, let us examine how far such cases are at all maintainable.    

 Defamation is defined in Sec. 499 of I.P.C.  as under.

“ Sec. 499 Defamation —  Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason o believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter excepted, to defame that person.

Explanation 1 : It may amount to defamation to impute anything to a deceased person, if the imputation would harm the reputation of that person if living, and is intended to be hurtful to the feeling of his family or other near relatives.

Explanation 2 : It may amount to defamation to make an imputation concerning a company or an association or collection of persons as such.

Explanation 3 : An imputation in the form of an alternative or expressed ironically, may amount to defamation.

Explanation 4 : No imputation is said to harm a person’s reputation, unless that imputation directly or indirectly, in the estimation of others, lowers the moral or intellectual character of that person, or lowers the character of that person in respect of his case or of his calling or lowers the credit of that person, or causes it to be believed that body of that person is in a loathsome state or in a state generally considered as disgraceful.

Section 199 Cr.P.C.  reads as follows:

 S. 199. Prosecution for defamation –

(1).     No court  shall take cognizance of an offence punishable under Chapter XXI of the Indian Penal Code (45 of 1860) except upon a complaint made by some person aggrieved by the offence :

          Provided that where such person is under the age of eighteen years, or is an idiot or a lunatic, or is from sickness or infirmity unable to make a complaint,  or is woman who, according to the local customs and manners, ought not to  be compelled to appear in public, some other person may, with the leave of the Court, make a complaint on his or her behalf.

(2).     Notwithstanding anything contained in this Code, when any offence falling under Chapter XXI of the Indian Penal Code (45 of 1860) is alleged to have been committed against a person who, at the time of such commission ,is the President of India, the Vice-President of India, the Governor of a State, the Administrator of a Union Territory or a Minister of the Union or of a State or of a Union Territory, or any other public servant employed in connection with the affairs of the Union or of a State, in respect of his conduct in the discharge of his public functions, a Court of Session may take cognizance of such offence, without the case being committed to it, upon a complaint in writing made by the Public Prosecutor.

(3).     Every complaint referred to in sub-section (2) shall set forth the facts which constitute the offence alleged, the nature of such offence and  such other particulars as are reasonably sufficient to give notice to the accused of the offence alleged to have been committed by him.

(4).     No complaint under sub-section (2) shall be made by the Public Prosecutor except with the previous sanction, —

          a).      of the State Government, in the case of a person who is or has been the Governor of that State or a Minister of that Government;

          b).      of the State Government, in the case of any other public servant employed in connection with the affairs of the State;

          c).      of the Central Government, in any other case.

(5).     No Court of Session shall take cognizance of an offence under sub-section (2) unless the complaint is made within six months from the date on which the offence is alleged to have been committed.

(6).     Nothing  in this section shall affect the right of the person against whom the offence is alleged to have been committed, to make a complaint in respect of that offence before a Magistrate having jurisdiction or the power of such Magistrate to take cognizance  of the offence upon such complaint.

          A Complaint is defined in Section 2(d) of Cr.PC as under:

          “complaint” means any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report.

          The procedure for initiating defamation proceedings is that it should be initiated only by the person actually defamed, by giving a sworn statement under Section 200 of Cr.P.C. before the competent Court. 

          Thus it is clear that the Police as such have no right to register any FIR against any person for the alleged offence of defamation.  Even though the law in this aspect is absolutely clear, many Station House Officers all over country have been registering FIRs for defamation filed by busy bodies.  Departmental action should be initiated against the Station House Officer for registering FIRs for the offences of defamation.

In Tamil Nadu 23 defamation complaints were filed in various places against Cinema actress Khushboo for her alleged remarks on pre-marital sex. The complaints were filed against her under Sections 499 and 500 of I.P.C. alleging that her remarks constituted defamation.  The Supreme Court in the year 2010 quashed all the complaints filed against her.

           The procedure of registration of FIRs is contained in Sec. 154 of Cr.P.C. which reads as follows:

Sec. 154.  Information in cognizable cases –

1).      Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by  him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf.

2).      A copy of the information as recorded under sub-section (1) shall be given forthwith, free of cost, to the informant.

3).      Any person aggrieved by a refusal on the part of an officer in charge of a police station to record the information referred to in sub-section (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this Code, and such officer shall have all the powers of an officer in charge of a police station in relation to that offence.

          As per the present provisions of the Cr.P.C. there is no time limit for the completion of an investigation and therefore, technically speaking, a Station House Officer can keep an FIR pending for several years and summon the so called accused for questioning over a prolonged period of time. The Cr.P.C. in its present form requires radical changes to prevent the harassment of citizens by the police. 

As of today, a Magistrate does not have any control over the investigation and the Court comes into the picture only after the Charge Sheet / final report is filed u/s 173 of Cr.P.C.  Till such time the Court is expected not to interfere in the investigation.  Only after the Charge Sheet is filed the Court can order a further investigation u/s 173(8) Cr.P.C.  except this, the powers of the Court are curtailed up to the filing of the Charge Sheet. 

The Supreme Court of India in M/s. Pepsi Foods Limited and Another Vs. Special Judicial Magistrate and Others held as under:

“It is not that the Magistrate is a silent spectator at the time of recording of preliminary evidence before summoning of the accused. Magistrate has to carefully scrutinise the evidence brought on record and may even himself put questions to the complainant and his witnesses to elicit answers to find out the truthfulness of the allegations or otherwise and then examine if any offence is prima facie committed by all or any of the accused.”

          If the Magistrate is expected not to be a silent spectator at the time of the recording of preliminary evidence, it follows that he should also not to be a silent spectator when frivolous F.I.R.s are being registered by the police.

It is time to arm Magistrates / Trial Courts the power to put an end to frivolous and non serious litigation.  This can be done by amending Sec. 203 of Cr.P.C. which reads as follows:

203.   Dismissal of complaint – If, after  considering the statements on oath (if any) of the complainant and of the witnesses and the result of the inquiry or investigation ( if any )  under Section 202, the Magistrate is of opinion  that there is no sufficient ground for proceeding, he shall dismiss the complaint, and in every such case he shall briefly record his reasons for so doing.

          The following amendment may be made to Sec. 203 of Cr.P.C.

Sec. 203 (i):

Notwithstanding anything contained in this Code, it shall be the duty of every Magistrate to examine all the First Information Reports  registered by the Station House Officers under his jurisdiction once in a week.  If the Magistrate is of the opinion that any FIR has been registered with the object of harassing the accused, or for  publicity purposes or other oblique motive or that the complainant has  no specific grievance against the accused, he shall forthwith call upon the complainant to give his sworn statement within a period of 15 days and shall either dismiss the complaint, or take cognizance of the same, without undue delay.  If the Magistrate finds that the complaint has been coming without any reasonable cause he can impose fine up to Rs.5,00,000/-. 

          Necessary amendments have to be brought to Section 250 of Cr.P.C. As per Sec. 250 (2) of Cr.P.C., a Magistrate can direct compensation of an amount by way of a fine which he has empowered to impose against a person who institutes a complaint without a reasonable cause.  The maximum fine that can be imposed by a Magistrate is Rs.5,000/-.  This was fixed in the year 1973.  Our law makers have not bothered to enhance this fine amount even after almost 50 years.  The value of the rupee has fallen down considerably over the last five decades and what was Rs.5000/- (Rupees five thousand) in 1973 would at least be Rs.5,00,000/- (Rupees five lakhs) by today’s standards.  Therefore the fine limit of Magistrates have to be increased drastically.   

          If this is done many frivolous cases will be dismissed at the threshold stage itself and Magistrates should be empowered to impose heavy fines on the frivolous and mischievous complainants.As frivolous cases will be get dismissed within a period of one month at the Trial Court stage itself and there would be no need for the persons named as accused to approach the High Court or Supreme Court seeking the quashing of frivolous FIRs and obtain orders against their probable arrest / harassment by the police. This will also reduce the burden on the High Courts and Supreme Court, where thousands of “quash” petitions are pending in various High Courts seeking the quashing of frivolous F.I.R.s.

          The second category of cases which attract wide publicity in the media are the cases filed by hypersensitive citizens to take offence to certain utterances by some public figures etc.  These cases are registered u/s 153-A of I.P.C. reads as follows:

153-A:         Promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony.

(1) Whoever —

a).      by words, either spoken or written, or any signs or by visible representations or otherwise, promotes or attempts to promote, on grounds, of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever, disharmony or feelings of enmity, hatred or ill-will between different religious, racial, language or regional groups or castes or communities, or

b).      commits any act which is prejudicial to the maintenance of harmony between different religious, racial, language or regional groups or castes or communities, and which disturbs or is likely to disturb the public tranquility, or

c).      organizes any exercise, movement, drill or other similar activity intending that the participants in such activity shall  use or be trained to use criminal force or violence or knowing it to be likely that the participants in such activity  will use or be trained to use criminal force or violence, or participates in such activity intending to use or be trained to use criminal force or violence or knowing it to be likely that the participants in such activity will use or be trained to use criminal force or violence, against any religious, racial, language or regional group or caste or community and such activity, for any reason whatsoever causes or is likely to cause fear or alarm or a feeling of insecurity amongst members of such religious, racial, language  or regional group or caste or community.

          This is another provision of law which is much misused.   FIRs are registered indiscriminately and public figures and citizens hounded by the police on the basis of the said F.I.Rs.  The curious aspect of law, is that, no prosecution can be initiated for this offence without the sanction of the Central Government or State Government.  This is contained in Section 196 (1) of Cr.P.C., which reads as follows:

          196. Prosecution for offences against the State and for criminal conspiracy to commit such offence.

(1) No Court shall take cognizance of-

(a) any offence punishable under Chapter VI or under section 153A, of Indian Penal Code, or 2 Section 295 A or sub section (1) of section 505] of the Indian Penal Code (45 of 1860 ) or

(b) a criminal conspiracy to commit such offence, or

(c) any such abetment, as is described in section 108A of the Indian Penal Code (45 of 1860 ), except with the previous sanction of the Central Government or of the State Government.

          If no court can take cognizance of offence without the previous sanction of the State or Central Government, it is pointless to allow private citizens and busy bodies to file these complaints against their political rivals or public figures or even ordinary citizens.

It is time to amend the process of registering an FIR.  The law has it stands today is that the Station House Officer is bound to register an FIR in respect of any information given to him, however, farfetched/exaggerated the grievance may be.  It is time to amend Section 154 of Cr.P.C. to prevent private citizens and busy bodies from lodging such complains before the police in respect of offence under Section 153 (A) of I.P.C., as anyhow no prosecution can be lodged without the sanction of the Central Government or State Government.  Therefore, any citizen having any grievance regarding the commission of any offence under Section 153 (A) should be directed to first to bring the same to the notice of the Union Home Secretary or Principal Secretary, Home Department of the State Government.  If the Central or State Government does not act upon the same, then the citizen may move the High Court by way of a Writ of Mandamus but not Station House Officer directly.  Most of these cases never pursued after the initial burst of publicity.  Those who lodge these complaints before the police, forget about them as soon as their political purpose or arm twisting is achieved. 

          The third category of cases which attract media publicity are the so called cases regarding Sedition.  In respect of Sedition under Section 124-A of IPC the National Crime Records Bureau shows that the number of convictions under Section 124-A of I.P.C. over the last few years is abysmally low.  Only two persons were convicted in the year 2018 and only one person is convicted in the year 2016.   (Source: National Crime Records Bureau).   For prosecuting a complaint under Section 124-A of I.P.C., also sanction by the Central or State Government is required, as in the case of offences under Section 153-A of IPC.  For this offence also, citizens should first be directed to approach the Union Home Secretary or Principal Secretary, Home Department of the State Government.  If the Central or State Government does not act upon the same, then the citizen may move the High Court by way of a Writ of Mandamus but not Station House Officer directly.

          Unless this is done, the precious time of the police will be wasted in registering publicity oriented FIRs and the investigation of actual crimes would be severely impeded.  It is time for the Law Ministry to bring about extensive changes in the Cr.P.C. to weed out frivolous litigations at the threshold stage itself.

Adv. Prabhakar Sripada

NEED FOR ESTABLISHING CITIZENS GRIEVANCES OMBUDSMAN

1- Newspapers are full of reports of citizens approaching the #HighCourts or #SupremeCourt to complain about the inaction on the part of the executive by filing what have come to be known as Public Interest Litigations (#PILs).  On the filing of this #PublicInterestLitigation, Courts have been ordering notices to various Government Departments and more than 85% of these Public Interest Litigation cases are eventually “closed” by giving a direction to   concerned Departments to take necessary action on the representation of the citizen “ in accordance with law ”, within a specified time frame. No important questions of law are being decided in this exercise.  

2- The precious time of the High Courts / Supreme Court is being diverted for a low-level adjudication not involving any important questions of law.  The National Judicial Litigation Grid does not give any details about the total number of Public Interest Litigations filed all over the country.   An examination of the Website of the A.P. and Telangana High Courts would show that about 190 Public Interest Litigation Writ Petitions were filed in the year 2019 in each State.  Taking 200 Public Interest Litigations in a High Court in a year as a basis, it would be safe to estimate the total Public Interest Litigation cases filed in the country to be in region of about 6000.

3- Now, let us examine the average time, a High Court spends on a Public Interest Litigation (assuming that the Public Interest Litigation brief consists of only 25 pages, the time taken by a Judge to read 25 pages would be at least 12.5 minutes).  As Public Interest Litigation cases are usually heard by two Judges, it would mean that at least 25 minutes judicial time would be spent actually by the Judges by studying the brief.  Each hearing lasts at least 15 minutes.  A minimum of two hearings are required for the disposal of the case which means at least 30 minutes for adjudication in the open Court.  Thus, the total time devoted by two Judges for disposing for adjudicating for single case is about one hour.

4- The time taken by the Appeal Examiners in the Registry of the High Court to scrutinize and number the PIL WPs would be at least 30 minutes.  The time taken by a stenographer to take down the dictation, type the order and get it signed by the Judges, to enable a certified copy of the order to be issued would be another 30 minutes. The Secretarial / Para-Judicial work in processing single Public Interest Litigation case would be about 60 minutes. Thus, two hours of Judicial and Para-Judicial time is consumed for adjudication of a single PIL.

5- Taking two hours as an average,  it would clear  each High Court (save the very small High Courts in the North East and Sikkim) would be devoting about 400 hours in a year on Public Interest Litigations @ 200 cases per year.   

6- The High Courts sit for only 210 working days in a year. Each working day is five hours.  As a matter of fact, one out of the five working days in a week are earmarked exclusively for PIL cases.  It   works out to 20% of the time of the Chief Justice and his Companion Judge.  

7- Instead of hearing and adjudicating important Constitutional issues, the time of the First Court is being spent on stereo typed, pedestrian adjudication.   In adjudicating Public Interest Litigation cases, the judiciary is unconsciously becoming increasingly drawn into the nitty gritty administrative issues.  It is in the danger of   becoming a Super Executive.   

8- In the year 2011 the “ The Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of their Grievances Bill, 2011”  was introduced in Parliament but the Bill lapsed owing to lack of political will.  Had this Bill being passed, the bureaucracy would have been obliged to be more responsive and treat citizens with respect and redress the grievances of the citizens within 30 working days.  Since this Bill was not passed the citizens are forced to file PILs for getting their grievances redressed within a specified time frame. Therefore, there is need to establish “Citizens Grievances Ombudsman” at the State and National level.  This Body should consist of experienced members of the bureaucracy, such as, retired Civil Servants, Police Officers, even Judges, Educationists, Members of the Civil Society, etc.

9- Any citizen, who is aggrieved by the inaction of a Government Body can approach the Citizens Grievances Ombudsman with his grievance and the Ombudsman would be empowered to examine the matter and direct the concerned Government or Local Body, Municipal Authority to redress the grievance of the citizen within a specific time frame. 

10- With the advent of teleconferencing, the establishment of a Citizens Grievances Ombudsman will not be an expensive affair. The citizens can approach the Citizens Ombudsman by lodging a complaint either in writing or email or by Video and all these complaints should be received round the clock by dedicated Call Centre. These complaints would then be brought to the notice of the Members of the Citizens Grievances Ombudsman, who working from home, would then issue necessary instructions which would be binding on the various Government Departments. If this is done there would be no need for the citizens to rush to the court by filing Public Interest Litigation for routine matters. 

11- The High Courts can then focus their attention of clearing the backlog of important cases relating to property, taxes, matrimonial, arbitration and contractual disputes, instead of getting bogged down in routine PIL matters, because as of November, 2019, the pending cases in  the Supreme Court were 59,867 and the pending cases in various High Courts were 44.75 Lakh.  

12- It would be in the fitness of things for the Supreme Court and High Courts to clear their own backlog rather than attempting to be a Super Executive.

Adv. Prabhakar Sripada