The Supreme Court has in a recent case of Laxmi Singh and others Vs Rekha Singh and others passed a Judgment dated 19-06-2020 and reiterated that a voter cannot be compelled to disclose information about whom he/she has voted in an election by way of secret ballot under the Representation of the People Act, 1951 (the Act). Furthermore, a voter cannot be prevented from voluntarily waiving such right to secrecy and choosing to reveal his/her ballot information to third parties.

In the present case, a no-confidence motion was passed against the Respondent-Panchayat Adhyaksha in the Zila Panchayat, Prayagraj, Uttar Pradesh by a majority vote. Aggrieved, the Respondent filed a case in the District Court on the ground that few Members had not followed the secret ballot procedure properly. But the District Court allowed the no-confidence motion. Thereafter, the Respondent filed an appeal before the High Court at Allahabad, which set aside the minutes of the Panchayat Meeting on the ground that few Panchayat Members had violated the rule of secrecy of ballot, as they had disclosed their ballot papers. Therefore, the Appellants had filed an appeal in the Supreme Court against the Allahabad High Court Order.

The Apex Court made the following observations in this case:

1- The Supreme Court noted that as per the Uttar Pradesh (Zila Panchayats) (Voting on Motions of Non-Confidence) Rules 1966, the panchayat members are required to put a specified mark on the ballot paper to express their choice without disclosing their names and details, and then, fold the said ballot paper, so that the secrecy of the ballot is not infringed. This was to ensure fair and free elections and to protect the interests of the voters.

2- Further, Section 94 of the Act provides that a voter cannot be compelled to disclose information about whom he/she has voted in a secret ballot. This concept of privilege of non-disclosure was formulated under the Act to ensure transparency and fairness in elections and to enable voters to cast their votes freely.

3- But the Apex Court held that the said concept of privilege inheres a right to waive it. Thus, the privilege of non-disclosure may end, if the voter decides to voluntarily reveal information about whom he/she had voted. In such case, the Supreme Court held that the waiver of secrecy by individual voters cannot be held to have contravened Section 94 of the Representation of the People Act, 1951.

But in this case, as both the Parties had agreed to conduct a fresh no-confidence motion against the Respondent by way of secret ballot, the Apex Court directed the Parties to conduct a fresh meeting, where the District Judge, Allahabad or Additional District Judge, Allahabad, would act as the Presiding Officer to ensure fair and free elections.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer


The High Court of Madhya Pradesh has pronounced vide its Order dated 09.06.2020 in the case of Bhupendra Suryawanshi v. Sai Traders[M. Cr. C No. 735 of 2020] that a representative of a company cannot be prosecuted under Section 138 of Negotiable Instrument Act, 1881 (‘the N.I. Act’) unless the company is impleaded as a party.

The said provision aims to prohibit dishonesty on the part of the drawer of cheque. Currently dishonour of cheque is a criminal offence and punishable with imprisonment up to one year or fine which is double the amount of dishonored cheque or both.

Brief Facts of the Case

Sai Traders (‘Respondent’) is a trade firm had filed a Complaint through its proprietor against Mr Bhupendra Suryawanshi(‘Petitioner’) who is the chairman of a company namely ‘Well Built Industry India Ltd., Kalyan Pura, Ashta, District-Sehore’ (‘the Company’). The Complaint states that the Petitioner borrowed Rs. 2,00,000/- from the Respondent on 14.08.2016 for business purposes. He assured the Respondent that he would return the same within a period of four months. But, after expiry of the stipulated period, the Respondent demanded his money and the Petitioner gave him cheque dated 25.11.2017 amounting to Rs. 2,00,000/-.

On 18.01.2018, when cheque was deposited in the bank, the same was dishonoured due to “stop payment” instructions by the Petitioner. Thereafter, the Respondent sent a Demand Notice and filed a Complaint before the Judicial Magistrate First Class (‘JMFC’). The JMFC framed the charges against the Petitioner, vide Order dated 20.05.2019. Being aggrieved by the said Order, the Petitioner approached the High Court for quashing the Complaint.

Petitioner’s Contention

The Petitioner stated that the Complaint was not maintainable against him as a Chairman of the Company as the Respondent had not made the Company a party to case. Hence, in view of the provision of Section 141 N.I. Act, which speaks about the offences by Companies, the proceedings under Section 138 N.I. Act are bad in law.

Section 141 of N.I. Act deals with the offences committed by companies. The said Section states that if an offence is committed by a company under Section 138 of the N.I. Act, every person, who was in-charge and responsible to the company in the conduct of the business of the company, is liable along with the company to be proceeded against and punished accordingly. Further, it provides that no person shall be liable to be punished if he proves that an offence was not committed under his knowledge or he has exercised all reasonable care to prevent the offence.

High Court Decision and Observations

The High Court relied on a landmark Judgment passed by the Hon’ble Apex Court in the case of National Small Industries Corpn. Ltd. Vs Harmeed Singh Paintal  [(2010) 3 SCC 330], which settled the principle of vicarious liability of the Director/Managing Director/Joint Director of company as well as principle regarding necessity of specific averment in the complaint.

In light of the aforesaid Judgment, this Court ordered that “the person (Director/Managing Director/Joint Director/other officers and employees) of Company cannot be prosecuted under Section 138 of N.I. Act unless the Company is impleaded as an accused”. The Court further relied on the following Judgments of the Apex Court in the cases of S.M.S. Pharmaceuticals Lts. Vs. Neeta Bhalla and Another, [(2005) 8 SCC 89], K.K. Ahuja Vs. V.K.Vora [2009 (10) SCC 48], and National Small Industries Corpn. Ltd (Supra).

The Court also observed that a demand notice was served only on the Petitioner/Accused, there was no demand notice against Company, and therefore, without arraying the company as an accused in the Complaint, the Petitioner cannot be prosecuted for the offence under Section 138 N.I. Act.

Hence, the Petition was allowed and the Complaint was quashed. Consequently, the Order dated 20.05.2019 passed by learned JMFC was set aside.

Lakshmi Vishwakarma


The Indian Lawyer & Allied Services


The #SupremeCourt has in a recent case of D. Devaraja vs Owais Sabeer Hussain passed a #Judgment dated 18-06-2020, where the Court held that when any person files a #complaint against a #publicservant, say, a #judge or #policeofficer, etc, accusing him of any #offence committed during the discharge of his #officialduties, the courts shall take #cognizance of such offence, only if there is a prior #sanction of the #Government.

In this case, the Appellant-Police Officer at Karnataka had detained the Respondent for conducting investigation of multiple pending criminal cases lodged against him. Thereafter, when the case was transferred to the Central Crime Branch and the Respondent was released, he filed a private complaint before the Magistrate alleging ill-treatment and police excesses by the Appellant and other police officers when he was in police custody. The Magistrate took cognizance against the Appellant in the said complaint case. Being aggrieved, the Appellant filed a Petition under Section 482 of the Code of Criminal Procedure 1973 (CrPC) in the Karnataka High Court to quash the order passed by the Magistrate. But the High Court redirected the case for proper hearing to the Trial Court. Being aggrieved, the Appellant filed an appeal before the Supreme Court.

The Apex Court made the following observations in this case:

1- That Section 197 (1) of CrPC requires a court to take cognizance of an offence alleged to have been committed by a public servant during the discharge of his official duties, only if there is a prior sanction of the Central Government or State Government, as the case may be.

2- Further, Section 170 (1) of the Karnataka Police Act, 1963 as amended in 2013 (the Act) also requires a court to take cognizance of an offence alleged to have been committed by a commissioner, magistrate, police officer, etc during his official duty, only if there is a prior sanction of the Government.

3- The object of the aforesaid provisions of CrPC and the Act is to protect a public servant or a police officer discharging official duties from facing frivolous, revengeful and vexatious criminal proceedings that may be possibly filed against them.

4- But the said protection is a limited one as it is available only when the alleged act done by the public servant is reasonably connected with the discharge of duties in his official capacity, and not in his private capacity.

5- That it is the duty of the trial court to determine whether prior sanction of the Government has been obtained or not in a complaint case. Failing which, such a complaint has to be rejected.

6- Once a sanction is granted in a particular case, the Government would have the complete control of the prosecution.

But in the present case, as there was no Government sanction issued, the Supreme Court held that the Magistrate erred in taking cognizance against the Appellant in the said complaint case, and quashed the complaint filed against the Appellant.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer


The #SupremeCourt of India recently clarified vide #Judgment dated 18.06.2020 in the case of Surendra Kumar Bhilawe V. The New India Assurance Company Limited [Civil Appeal No. 2632 of 2020] that ‘#owner’ means the person in whose name the motor vehicle stands registered under the #MotorVehiclesAct, 1988.

The facts pertaining to the case involves Mr. Surendra Kumar Bhilawe (the Appellant), who was the owner of a Truck, which was covered by a Policy of Insurance issued by the New India Assurance Company Limited (the Insurer) effective for the period from 02.06.2011 to 01.06.2012. The said Truck, which was loaded with Ammonia Nitrate at Raipur, started its journey driven by one Mr. Rajendra Singh.

While on the journey the said Truck met with an accident on road. It was stated that the accident occurred in the driver’s efforts to save a cow, which had come on its way and he lost his control on the vehicle. This caused the vehicle to fall into a river by the side of the road and the Truck was extensively damaged. The Ammonia Nitrate, carried in the Truck was also washed away.


The Appellant lodged the claim with the Insurer. However, the Insurer repudiated the said claim on the ground that the Appellant had sold the said Truck to one Mr. Mohammad Iliyas Ansari (the Transferee) on 11.4.2008 for a consideration of Rs.1,40,000/- and also on the ground of delay in filing a police complaint and in lodging the claim for reimbursement of losses.

Being aggrieved by the action of the Insurer, the Appellant filed Complaint before the District Consumer Disputes Redressal Forum, which vide Judgment dated 09.01.2014 allowed the Complaint and directed the Insurer to pay Rs 4, 93,500/- along with interest. It also granted relief in terms of compensation to the tune of Rs 7000/- for mental agony and cost of litigation. The said relief was granted on the ground that the ownership of the said Truck never stood transferred to the Transferee. The said Judgment of the District Forum was appealed before the State Consumer Disputes Redressal Commission, which was dismissed vide an Order dated 22.07.2014, on the same ground.

The Insurer filed Revision Petition before the National Consumer Disputes Redressal Commission challenging the Order of the State Commission. The National Commission allowed the said Revision Petition, and set aside the Orders of the District Forum and the State Commission respectively, and dismissed the Complaint of the Appellant. It was dismissed on the ground that the Appellant had sold his vehicle to the Transferee and ownership in the vehicle passes to the purchaser thereby the Insurer is not liable to pay for losses.

The Appellant appealed before the Supreme Court and contented that even though he had entered into a Sale Agreement with the Transferee, he had not actually transferred ownership of the vehicle to him. Even after the Sale Agreement, the Appellant had himself been paying instalments, to Bank, towards repayment of the loan obtained by him for purchase of the said Truck.

Legal Issue

Could ownership of the said Truck be transferred without transfer of registration in the name of the Transferee, in view of the Motor Vehicle Act, 1988 and the Rules framed thereunder?


The Court allowed the Appeal. While dealing with the aforesaid issue the Court firstly, looked into the definition of ‘owner’ under the old Act, of 1939, and observed that the term ‘owner’ meant the person in possession of a motor vehicle. It said that legislature has consciously changed the definition of ‘owner’ to mean the person in whose name the motor vehicle stands under the Motor Vehicles Act, 1988. This definition of ‘owner’ has been overlooked and ignored by the National Commission.

Thereafter, the Court referred to its earlier Judgments passed in Naveen Kumar v. Vijay Kumar and Others [(2018) 3 SCC 1] and Pushpa Leela & Ors. v. Shakuntala [(2011) 2 SCC 240], which were rendered in the context of liability to satisfy third party claims. However, the dictum of this Court was that the registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident.

It was held that the ownership of the Truck stands in the name of the Appellant on the day accident occurred. It noted that in Certificate of Registration of the Vehicle in question, the name of the Appellant is recorded as registered owner. And he was the one who was paying the instalments to the Bank and not the Transferee, in whose name Sale Agreement was executed.

It further referred to various provisions of the Motor Vehicle Act, 1988 and judicial precedent to finally decide that “In view of the definition of ‘owner’ in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari.”

Thus, the Court set aside the impugned Order of the National Commission under Appeal and upheld the Order of the District Forum as the correct interpretation of the Law.

Lakshmi Vishwakarma


The Indian Lawyer


In recent times, discussions on #suicide have occupied the attention of the #media, social and print, TV and internet in a big way. The recent suicide of actor, #SushantSinghRajput (#Actor), on 14-06-2020 is a case that has been highlighted aggressively by press and media possibly because of the lack of #news items due to the #Pandemic. It seems that the world is now fed up of reading news and updates on Coronavirus and any other news, even if tragic, is a welcome break from the Corona crisis. However, this aggressive reporting on suicide has in its wake seen the commission of suicide by few people across the country. So, the over-zealousness of the press also has its minus points. But it is unlikely that such suicides will restrain reporting of this news item.

Police investigations on the suicide of Sushant Singh Rajput is underway for a number of days and there are people in the suspect list, some of who are famous #Bollywood personalities. Though most of these #FIRs will be unfounded, however, the ground reality is the law on suicides in India makes abetment of suicide also an offence punishable under the #law.

The law states at Section 306 of the Indian Penal Code 1860 (#IPC) that #abetment of suicide is an offence punishable under the law. As per the law, a person is guilty of abetment of a thing in three circumstances, firstly, if a person instigates any person to do that thing, secondly, engages with one or more persons in any conspiracy for the doing of that thing, and thirdly, intentionally aids by illegal act or omission, the doing of that thing is deemed to have abetted the crime.

Hence, if any person, in the named persons, in the Sushant Singh Rajput’s case are deemed to fall within the definition of abetment of his suicide, such persons will be punished with imprisonment of a term which may extend to 10 years and also be liable to fine.

Though suicide is generally the outcome of #depression or manic disorder, however, there are instances when the depression can be due to the acts and omissions of third parties who have instigated the suicidal person to act in a manner that he feels compelled to take his own life.

While criminal law assumes innocence until proven guilty and that too beyond reasonable doubt, all persons who have been named to have abetted the Actor’s suicide, will have to go through the rigors of investigation, if a complaint or a FIR has been lodged against them. Only time will tell whether the Actor’s suicide was the outcome of depression or due to the instigation of some third party.

Sushila Ram Varma

Chief Consultant

The Indian Lawyer


The #SupremeCourt has recently in the matters of U.P. State Road Transport Corporation Vs Rajenderi Devi and Ors. dated 08-06-2020, Chandrakanta Tiwari Vs New India Assurance Company Ltd. and Anr. dated 08-06-2020, Sri Anthony Vs Managing Director, K.S.R.T.C dated 10-06-2020 and M.H. Uma Maheshwari and Ors. vs United India Insurance Co. Ltd. and Anr. dated 12-06-2020, laid down certain principles for allowing #compensation in various #motorvehicleaccident #claim matters.

The Supreme Court made the following observations in each of the above-mentioned cases:

1) In U.P. State Road Transport Corporation Vs Rajenderi Devi and Ors. dated 08-06-2020:

In this case, a 45-year-old man riding a cycle was hit by a bus, as a result of which, he succumbed to his injuries. The bus was a private one, but it operated under the control of Uttar Pradesh State Road Transport Corporation (UPSRTC). The Motor Accident Claims #Tribunal (#MACT) held UPSRTC vicariously liable for paying compensation to the family of the deceased. Thereafter, in an appeal, the High Court upheld the order of the MACT. Thus, the UPSRTC filed an appeal before the Apex Court. The 3-Judge Bench of the Supreme Court observed and held that:

i) That the expression ‘#owner’ under Section 2 (30) of the Motor Vehicles Act 1988 (the Act) has to be interpreted in a manner to include not just the registered owner of the vehicle, but also the person who has the actual possession and control of the motor vehicle, who has the right to hire and fire the employee, and under whose directions and commands the driver operates the vehicle. Thus, such an owner would be vicariously liable for the tort committed by its employee during the course of his employment.

ii) But in the present case, as per the #agreement between the bus owner and the UPSRTC, the bus owner or the insurance company had the liability to pay compensation for any fault, #negligence or accident by the bus driver. Thus, the 3-Judge Bench of the Apex Court held the Insurance Company liable to pay compensation based on the income of the bus driver.

2) In Chandrakanta Tiwari Vs New India Assurance Company Ltd. and Anr. dated 08-06-2020:

In this case, the Claimant-Appellant’s 28-year-old son, who was a pillion rider, died in a motor accident due to the rash and negligent driving of Respondent No. 2, who was the owner and the driver of the said ill-fated motor vehicle. The MACT held the Insurance Company liable to pay compensation to the Appellant. The said order of the MACT was set aside and the Petition under Section 163A of the Act was dismissed by the Uttarakhand High Court on the ground that the deceased himself was driving the vehicle and had no valid driving license. Thus, the Appellant filed an appeal before the Supreme Court. The 3-Judge Bench of the Apex Court observed and held that:

i) That the Petition under Section 163A of the Act is a ‘no-fault’ petition, where, the claimant need not plead and prove that the rash and negligent act of the driver of the vehicle or of any other person caused the death of a person. In such a petition, the owner of the vehicle or the authorised insurer would be legally liable to pay the compensation.

ii) Thus, the Supreme Court did not take into consideration any argument relating to who was driving the vehicle rashly and negligently at the time of the accident, i.e. whether the owner or any third party, as it was a Section 163A Petition. Further, the 3-Judge Bench held the Insurance Company liable to pay compensation to the Claimant-Appellant based on the age and income of the deceased at the time of the accident.

3) In Sri Anthony Vs Managing Director, K.S.R.T.C dated 10-06-2020:

In this case, the 45-year-old Appellant was travelling in a bus of the Respondent-KSRTC, when he met with an accident due to the rash and negligent driving by the bus driver. As a result, the Appellant suffered serious injuries and his left leg had to be amputated. The MACT awarded compensation to the Appellant, which was enhanced by the High Court in an appeal by the Respondent. Aggrieved by the amount of compensation awarded to the Appellant, he filed an appeal in the Supreme Court. The 3-Judge Bench of the Apex Court observed and held that:

i) That the Appellant had suffered permanent disabilities due to the rash and negligent driving by the bus driver. He could not stand independently or walk without aid of a helper, or climb up and down a staircase, do painting, or any other manual work, etc. his injuries triggered infection in his leg which emanated foul smell that prevented him from socialising in public.

ii) That the Appellant would require at least three additional replacements of the artificial limb in his lifetime.

iii) That the Appellant had lost his job and earnings. Thus, the #permanentdisability had a huge adverse impact on the earning capacity of the Appellant.

iv) Thus, based on what activities he could undertake and what he could not due to the permanent disabilities; his age and nature of work before the accident; and whether he was capable of earning livelihood despite the permanent disabilities, the 3-Judge Bench of the Apex Court enhanced the compensation payable by the Respondent to the Appellant, under various heads, including ‘pain and sufferings’, ‘medical expenses’, ‘attendant charges’, ‘loss of earnings during the treatment period’, ‘conveyance charges’, ‘loss of future earnings due to permanent disability’, ‘future medical expenses’, and ‘loss of amenities’.

4) In M.H. Uma Maheshwari and Ors. vs United India Insurance Co. Ltd. and Anr. dated 12-06-2020:

In this case, the 50-year-old husband of the Appellant No. 1 and father of the Appellant Nos. 2 and 3 was travelling in a car when he met with an accident due to the rash and negligent driving by the driver of the said car. Thereafter, he succumbed to his injuries. The MACT allowed compensation to the Appellants, which was reduced by the High Court in an appeal by the Respondent. Thus, the Appellants filed an appeal before the Apex Court. The 3-Judge Bench of the Supreme Court observed and held that:

i) That the deceased was a 50-year-old man and his untimely death has resulted in loss of dependency to his family.

ii) Therefore, the 3-Judge Bench of the Apex Court upheld the compensation allowed by the MACT under the heads of loss of dependency, loss of consortium, loss of love and affection, transportation of dead body and funeral expenses, based on the age and income of the deceased.

Thus, the Supreme Court has by far allowed compensation to the victims or the families of the deceased victims based on the age, income and nature of work of the victim, impact of accident on the life and earning capacity of the victim or the family of the deceased and other facts and circumstances.


Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

Edited by

Sushila Ram Varma

Chief Consultant

The Indian Lawyer


A Bench headed by Supreme Court Justice Arun Mishra and Justice UU Lalit passed the Order with regard to #Financing of #HomeBuyers by #Banks in the case of Bikram Chatterji and Others v. Union of India and Others [Writ Petition (C) No.940 of 2017] on 10.06.2020. The Court Order has come as a relief to the Flat Buyers in view of the prevailing circumstances of #Amrapali’s stalled projects. As the Court ordered Reserve Bank of India (#RBI) to advise all Banks And Financial Institutions, which have sanctioned home #loans to home buyers to pay out all balance loan amounts to the home buyers.

The aforesaid Writ Petition pertains to the projects of various companies of Amrapali Group in the Noida and Greater Noida. There are around thousands of homebuyers who had invested in various Amrapali projects more than a decade ago, but many of them are yet to receive possession of their homes/flats, as projects were stalled due to diversion of money by directors of the Amrapali Group of Companies.

The Supreme Court in its Order said that the condition of the people who bought the houses of Noida and Greater Noida is the same. There has been no progress in Amrapali’s project. Earlier Banks stopped the release of the remaining instalments of home buyers after the Amrapali project was halted. The Supreme Court asked Banks and Financial Institutions to restructure the loan of home buyers and release the remaining loan amount. These funds will be used to complete the unfinished work of the Amrapali projects. In this regard, the Court also ordered the release of loans that had been declared Non-Performing Assets (NPAs) as per RBI Guidelines.

In a huge relief to the builders, the Supreme Court also ordered that Noida and Greater Noida Authorities cannot charge high rate of interest from builders due to delay in payments to it. The Court has capped the interest rate at a maximum of 8% per annum. If they fail to pay, the relief granted shall stand withdrawn. The Court also directed Noida and Greater Noida Authorities that it shall also ensure that not only instalments are deposited, but also all such projects are completed within the stipulated time.

Earlier in this case, the Supreme Court on 03.06.2020 had directed the National Buildings Construction Corp. Ltd (NBCC), to take over and complete the stalled projects of Amrapali Group of Companies.

Therefore, the Court in its Order dated 10.06.2020 directed that NBCC is immune from any legal actions for any existing disputes in relation to the Amrapali Projects. Thus, they cannot be dragged in the litigations filed by existing home buyers, or any interested party before any Court/Commission or Authority.

It would be reasonable to conclude that the Supreme Court of India has always taken a progressive approach towards home buyers and it has resolved contemporary difficulties faced by such home buyers that have gone up till the Supreme Court. The aforesaid Order in the Amrapali matter is an example of fair justice delivery to the Parties. 

Lakshmi Vishwakarma


The Indian Lawyer


This week the #MinistryofFinance has proposed to #decriminalize “minor” #offences prescribed in 19 different #legislations for economic offences, purportedly, for improving “business sentiment” and “unclogging” of court process.

The Ministry of Finance has invited comments or suggestions regarding decriminalization of 19 Legislations within 15 days, i.e. on or before 23-06-2020. . The Legislation proposed to b decriminalized are  Insurance Act 1938, SARFAESI Act, 2002, PFRDA Act 2013, RBI Act, 1934, Payment and Settlement Systems Act, 2007, NABARD Act 1981, NHB Act, 1987, State Financial Corporations Act, 1951, Credit Information Companies (Regulation) Act, 2005, Factoring Regulation Act, 2011, Actuaries Act, 2006, Banking Regulation Act, 1949, General Insurance Business (Nationalization) Act, 1972, LIC Act, 1956, Banning Unregulated Deposit Schemes Act, 2019, Chit Funds Act, 1982, DICGC Act, 1961, Negotiable Instruments Act, 1881 and  Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

Firstly, the offences which the Ministry has termed “minor offences” are not at all minor. They are serious in nature. Essentially the proposed changes would remove whatever little fear that exists in the minds of Indian corporate honchos about the prospect of serving a jail term for corporate frauds.

The key managerial personnel of the corporations such as – the Chief Executive Officer, the Company Secretary, the whole-time director, the Chief Financial Officer etc., are sought to be let off the hook by the proposed decriminalization of the above legislations.

Previously, these officials could be sent to jail for a term of one year or a fine of Rupees one lakh, if they resort to corporate frauds. The auditors too faced the prospect of being sent to jail for one year or fine of Rupees One Lakh.

Normally our #courts dealing with economic offenders have been averse to sending the offenders to #jail  and it has been my experience that corporate bigwigs get away by paying a small fine. Very rarely key managerial personnel are actually imprisoned. In this context it is not understood as to how “business sentiments” would be improved by removing the almost fictional jail term prescribed in the above referred legislations.

In U.S.A and U.K, jail terms are an integral part of their corporate laws. Jail term of three to five years are embedded in the corporate laws of those countries and business leaders do not find anything unusual about the jail term contained in the legislation. Thus the argument of “business sentiment” being affected does not hold any water. Many errant top executives have served jail sentence in U.S.A. Indian-American businessman Rajat Gupta too served jail sentence of two years for insider trading.

The mere presence of a jail term has not prevented big corporations flourishing in those countries. It is not understood as to why a mild jail term in India should be viewed as being not market/investor friendly.

It should not be forgotten that two of the biggest scams in recent times are Satyam Computers and IL & FS. Both involved the manipulation of accounts. Stringent punishments are necessary in our country, where such scams take place with unerring regularity. I do not remember any Indian businessman being jailed for insider trading till date. Generally our court process are very slow and often the accused usually dies before being actually convicted, Harshad Mehta, is an example of this.

Not satisfied with the above proposed amendments, Finance Ministry wants to amend Section 138 of Negotiable Instrument Act, 1881. Section 138 of the Negotiable Instrument Act deals with payment of debt by the issuance of a cheque. About 35 lakh Negotiable Instrument Act cases were pending as per the 213 Law Commission Report published in 2008. What happens to these cases which are already in the courts?  Will all these cases get abated?  If they still continue, how will the “unclogging of the court” processes take place ?.   If cheque bounce cases are to be treated as civil cases, instead of criminal, then equal number of civil cases will be filed in the civil courts and we will be back to square one.

 The solution lies in increasing the funds for the judiciary. Currently the amount allocated for judiciary is less than one percent of the total budget allocation. In the 2020-21 the budget allocation for judiciary is just Rs.2,200 crores. This is totally insignificant compared to the funds allocated to the other ministries. The funds allocated for top 10 ministries are given below:

  1. Defence Ministry                                             –   Rs. 4,71,378 crores
  2. Home Ministry                                                 –   Rs. 1,67,250 crores
  3. Agriculture and farmer welfare                        – Rs.1,42,762 crores
  4. Ministry of Consumer affairs and Public distribution – Rs.1,24,535 crores
  5. Ministry of Rural Development                         – Rs.1,22,398 crore
  6. Ministry of Human Resource Development         – Rs. 99,312 crore
  7. Ministry of Road Transport and Highways           – Rs.91,823 crore
  8. Ministry of Railways                                          – Rs.72,216 crore
  9. Ministry of Health and Family welfare                – Rs.67,216 crore
  10. Ministry of Housing and Urban Affairs              – Rs.50050 crore

        Thus, it can be seen that Government does not seem to attach much importance to the justice delivery system and has allotted Rs.3150 crores for Ministry of Culture and Rs.2500 crores for Ministry of Tourism. Judiciary is ranked even below the Ministry of Culture and Ministry of Tourism.

It is not understood as to how our understaffed and under budgeted Judiciary is expected to dispose off 3.2 crore cases which are currently pending in the country. Mere removal of jail term from various legislations does not reduce the pendency of the cases. The solution lies in appointing more judges and establishing more courts.

The most surprising part of this proposed exercise is that the #LawMinistry does not seem to be have been consulted. The jail term in the above legislations was incorporated after due deliberations and this is ought to be removed by the experts from the Finance Ministry, purportedly to improve the “business sentiments”.

Will the Law Minister please stand up and prevent the cannibalization of the Law Ministry by the Finance Ministry?

Prabhakar Sripada

Advocate, Telangana High Court

TIL Legal Speak Episode 5: Understanding IBC during Covid Crisis

The Indian Lawyer & Allied Services has discussed the latest Ordinance of 5th June 2020 which talks about suspension of certain provisions of the Insolvency and Bankruptcy Code 2016 (IBC) in the Episode 5 of TIL Legal Speak.

To view the Video, please visit the link below:

Video Credits:

Speaker- Adv. Sushila Ram Varma

Moderator- Adv. Harini Daliparthy

Category: Legal

TIL Legal Speak Episode 4: Curbing Frivolous Criminal Litigations

In recent times, we have noticed a sudden rise in the filing of defamation complaints against public figures. Most of these defamation cases don’t meet the stringent requirements under the law and yet they are being filed with alarming frequency and impunity, thereby, causing unnecessary harassment to public figures.

Thus, the Indian Lawyer & Allied Services in collaboration with Adv. Prabhakar Sripada, Telangana High Court, brings before you the Episode 4 of TIL Legal Speak, which is about ‘Curbing Frivolous Criminal Litigations’ with focus on defamatory complaints.

To view the Video, please visit the link below:

Video Credits:

Speaker- Adv. Sushila Ram Varma, and Adv. Prabhakar Sripada

Moderator- Adv. Sushila Ram Varma

Category: Legal