Artificial Intelligence in Law; Will “Robot Lawyers” take over the profession?

by LFIAdmin | Feb 27, 2023 | Home

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | February 28, 2023

INTRODUCTION

Technology has been evolving ever since the invention of bows and arrows. The 18th century marked the beginning of the industrial revolution, an indelible period where machines took over human jobs requiring repetitive physical labour. In the 21st century, we are witnessing Artificial Intelligence (AI) take over jobs which require complex mental labour. From self-driving cars [1] to automated financial investments [2], AI programs are automating activities which have always required human intelligence to now perform these activities with greater efficiency and precision.

In the technology-shy profession of law, AI programs are being used to automate repetitive tasks which do not require a lawyer’s professional skill. Some believe that these programs will take away the practice of legal professionals, to which an opinion is provided in this article.

WHAT IS “AI” AND HOW DOES IT WORK

Artificial Intelligence can be described as technologies developed by using algorithms which are capable of performing intelligent activities by themselves. Intelligence is understood as the ability to learn, understand, reason and perform activities. When artificially, or by the use of technology, intelligent systems are developed which can perform complex activities, such systems are known as AI programs [3].

Contrary to fictional representation, AI programs do not possess human-like thinking or cognitive abilities and instead perform functions by using computational mechanisms. The most common way in which an AI program works is by providing the system with cosmic amounts of data, and then by using heuristics, the system detects patterns in the data and uses the knowledge, rules and information which have been encoded by programmers in the system, to execute its functions. Sometimes, the system is not even provided with any data. It is simply developed by using algorithms and has specific rules which it follows to function. Unlike humans, many AI programs do not even understand the meaning of the data it is provided with, yet by using patterns and rules, these systems function more efficiently than humans [4]. As time passes, such systems also learn how to function better by interpreting feedback, consuming more data and learning more patterns. This self-learning process is also a technology implanted in many AI programs, known as Machine Learning.

Different AI programs exist for specific purposes, and thus these programs are trained in a certain manner to achieve the objective of automation. Automation refers to the process in which AI programs perform activities automatically without the intervention of humans.

None of the existing AI programs are Strong AI programs, i.e, which implement human-like conscious thinking to function [5]. Strong AI programs are technologies which are in development.

CURRENT APPLICATION OF LEGAL AI PROGRAMS USED WORLDWIDE

a) Kira systems: This advanced legal AI program uses machine learning to identify, extract and analyse text in a given contract or document. It facilitates due diligence and can create a summary of documents. It is used for reviewing contracts and other documents [6].

b) Lex Machina: Lex Machina is used for predicting the behaviour of the judge, opposing law firms, lawyers and parties. It allows the user to then accordingly strategize and analyse the case [7].

c) Luminance: It is a document review legal AI program which uses machine learning and deep learning to maintain client records, generate and review contracts, and highlight key points and abnormalities in a contract [8].

Various other legal AI programs exist which facilitate legal research, legal opinion, drafting, pursuing litigation, and more. All these systems are available online and can be used after paying a nominal fee. The result of using such systems is that all repetitive work which required minimum professional intervention is now completed at a faster rate, thereby saving the creative energies of advocates.

FUTURE OF AI PROGRAMS IN THE LEGAL PROFESSION

On the non-litigation side of the legal profession, OpenAI’s ChatGPT has the potential to make legal practice redundant in certain areas. ChatGPT is an online chatbot (a form of AI) which has been fed tremendous amounts of data and functions on machine learning [9]. This chatbot provides precise and relevant legal advice, and can also draft various legal documents such as a Special Power of Attorney, Partnership Deed, etc. While the chatbot provides a disclaimer to not rely on its legal opinion and its drafts, the chatbot’s answers are extremely reliable and its drafts are fit for use. Moreover, the chatbot is easy to interact with, provides answers immediately and is available 24×7. The visible drawback is that this technology takes a lot of time and effort to train, and also its data has not been updated after 2021. In the profession of law, lawyers constantly update themselves with amendments and landmark judgements. Updating the chatbot’s data continuously will become very expensive and time-consuming. Another drawback is that the chatbot answers in a guessing language, which cannot be trusted by someone in need of legal help. However, even in its current state, it is a tool which can widely be used for legal advice and drafts, and the future potential it has in the legal profession is unquestionable.

In the litigation side of the legal profession, an American company called ‘DoNotPay’ had made headlines in early January of 2023 when it made public its plan to deploy a ‘robot lawyer’ in court to defend an accused in an alleged traffic violation case [10]. This ‘robot lawyer’ in actuality is a legal AI application which is accessible from a mobile phone or a desktop. The application would have heard the arguments in court and via a Bluetooth earpiece would have instructed the defendant accordingly. The trial which was to happen sometime in late February 2023 stands postponed as the state prosecution threatened the CEO of ‘DoNotPay’ with jail time for trying to conduct such an experiment in a court of law. The effectiveness of such legal AI applications cannot be confirmed as of now. However, it is possible that developing and using such AI applications can be of great use to an arguing counsel as well as a client. In India, an arguing counsel is not usually well-versed in the facts of a case, and he or she relies on a junior for the same. Using such a program instead of a junior can be extremely effective since the program can be fed with the facts of the case along with all the relevant statutes and judgements, which will directly help an arguing counsel. The program, being capable of legal reasoning, can further build upon the ongoing proceedings in a court to make strategic arguments, which can be referred to by an arguing counsel. Where clients require quality legal aid which they cannot afford, using such a program can provide massive help. The drawback here is that such a program does not perform well in activities which require critical reasoning and intuition. In a scenario where such skills are required, the program will not be of great help.

CERTAIN DRAWBACKS OF AI PROGRAMS

AI programs are not perfect and do give rise to significant problems, the first being that of ethics. There are numerous ethical questions which are raised against the use of AI programs, and an important one is using AI programs for deception and manipulation. The incredible ability of AI programs to create evidence from absolutely nothing can cause serious damage to the legal system. These programs can create ‘actual’ signatures on contracts along with ‘real’ audio and video clips of any relevant party to a case, which can frustrate the justice delivery process. Detecting the real evidence from the fake one is nearly impossible, and can be known only after it has been accepted by the user of such AI programs [11].

Secondly, following data patterns results in AI bias wherein the AI program learns to exhibit bias against a particular group. To illustrate, if in the data provided to an AI program, members of Group ‘A’ indulge in crime more than members of Group ‘B’, then the AI program will develop a bias against members of Group ‘A’ and will be more likely to tag them as criminals. This makes the AI program unreliable. As witnessed in the functioning of ‘judge-bots’, which are AI programs developed for judging criminals and helping a judge decide a particular case, the judge-bots handed over greater punishments for members of a group it had developed a bias against [12].

Lastly, it is not clear as to who will be held liable for mistakes committed by legal AI programs. Where a serious fraud or crime has been committed by the AI program, even if it is not intentional, there exists confusion about who should be held culpable – law firms, lawyers, clients or the developer of the AI program. No real punishment can be given to the AI program as it is not a conscious being.

CONCLUSION

To put everything in perspective, no, AI-powered robots will not take away the practice of lawyers in the next 20-30 years. However, repetitive and mundane tasks that a lawyer performs will certainly be automated. These tasks will be done at an unimaginably faster rate by legal AI programs and will give an incredible competitive edge against those who continue the manual performance of mechanical tasks. The takeaway is that those lawyers who employ AI programs will automate unnecessary tasks and will be able to use their time on more intellectual and complex issues, which will increase their value. Many top law firms which have begun employing legal AI programs have either laid off their juniors to reduce their costs or have their juniors perform more complex tasks which the AI program cannot perform. It becomes imperative for lawyers to take on more intellectual tasks and increase their competency to stay relevant. Lawyers will also have to educate themselves on AI technologies and must learn to use legal AI programs for their benefit and the benefit of their firms and clients.

It is uncertain what the later future will be, but the next 20-30 years of the legal profession will certainly be dominated by those who take advantage of legal AI programs and leverage it against those who don’t. The past has taught us that technological advancements always happen very quickly, but adopting these technological advancements is a dragged-out process. These advancements can’t be stopped; they can only be embraced to achieve greater success. In the oversaturated and strangely overworked profession of law, an investment in legal AI programs will provide great returns in both, the long and short run.

[1] RP ; Self-driving cars : Mike Daily & Others

[2] RP ; Research and Policy briefs – World Bank Chile Centre and Malaysia Hub

[3] RP ; Arrived at by: Legal definition of AI – Jonas Schuett, Goethe University Frankfurt

[4] RP ; Journal of Artificial Intelligence Research

[5] IBM ; Strong AI

[6] kirasystems.com

[7] lexmacina.com

[8] Lumninance.com

[9] OpenAI ; ChatGPT 3.5 – openai.com

[10] usatoday – AI ‘robot lawyer’ to take on speeding tickets in court

[11] Learn.g2 ; AI ethics are a concern

[12] AIMultipe ; Bias in AI

WHETHER A GIFT OF AN IMMOVABLE PROPERTY RESERVING A LIFE INTEREST (AMOUNTING TO CONDITIONAL GIFT) FOR THE DONOR IS VALID?

by LFIAdmin | Feb 4, 2023 | Home

By Heena Thalesar, Advocate

heenathalesar2233@gmail.com | February 2, 2023

There is a lot of confusion amongst lawyers and public in general “whether one can gift an immovable property reserving life interest for himself/herself?”

Many people would like to gift their residential premises to their children during their life time to avoid future unpleasantness amongst family members, however, at the same time they wish to safeguard themselves by retaining their life interest and the possession of the residential premises during the time they are alive.

Chapter VII of the Transfer of Property Act, 1882 (“the Act”) (Sections 122 to 129) deals with gifts generally and interalia provides for the mode of making gifts, which are as under:

(i) Section 122 of the Act defines “gift” as a transfer of certain existing movable or immovable property made voluntarily and without consideration by one person called the Donor to another called the Donee and accepted by or on behalf of the Donee.

(ii) Section 123 of the Act regulates the mode of making a gift and inter alia, provides that a gift of immovable property must be effected by (a) a registered instrument signed by or on behalf of the Donor and (b) attested by at least two witnesses. In the case of movable property, transfer either by a registered instrument signed as aforesaid or by delivery is valid.

(iii) Sections 124 to 129 deals with gifts of existing and future property, gift made to several persons of whom one does not accept, suspension and revocation of a gift, and onerous gifts including effect of non-acceptance by the Donee of any obligation arising thereunder.

The Hon’ble Supreme Court in Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker and Ors (MANU/SC/1045/1997: (1997) 2 SCC 255), inter alia, held that the execution of a registered gift deed and acceptance of the gift with delivery of the property together makes the gift complete. Thereafter, the Donor is divested of his title and the Donee becomes the absolute owner of the property. It was observed and held that since the Donor had executed a conditional gift deed and retained the possession and enjoyment of the property during lifetime, the Gift had become ineffective.

The Hon’ble Supreme Court in its another decision in K. Balakrishnan v. K. Kamalam and Ors. MANU/SC/1071/2003: (2004) 1 SCC 581 after recording the reasons inter alia held that “The High Court was, therefore, apparently wrong in coming to the conclusion that the gift-deed was ineffectual merely because the Donor had reserved to herself the possession and enjoyment of the property gifted.” However, Judgment of Narmadaben Maganlal Thakker was not discussed in this case.

In view of the apparent conflict between two above referred decisions, the above issues were referred to the larger bench in the matter of (Renikuntle Rajamma V/s. K. Sarwanamma – reported in AIR 2014 SC 2906) before the Hon’ble Supreme Court of India. While deciding the reference, the Hon’ble Supreme Court inter alia, observed and held that:-

(i) Careful reading of Section 123 of the Act which leaves no manner of doubt that a gift of immovable property can be made by a registered instrument signed by or on behalf of the Donor and attested by at least two witnesses and if the same is accepted by or on behalf of the Donee. A conjoint reading of Sections 122 and 123 of the Act makes it abundantly clear that “transfer of possession” of the property covered by the registered instrument of the gift duly signed by the Donor and attested as required is not a sine qua non for the making of a valid gift under the provisions of Transfer of Property Act, 1882. Judicial pronouncements as to be the true and correct interpretation of Section 123 of the Act have for a fairly long period held that Section 123 of the Act supersedes the rule of Hindu Law (ref: full bench Judgment of the High Court of Allahabad in Lallu Singh v. Gar Narain&Ors – AIR 1922 All. 467) if there was any making of delivery of possession an essential condition for the completion of a valid gift.

(ii) Section 123 of the Act makes transfer by a registered instrument mandatory. This is evident from the use of the words “transfer must be effected” used by the Parliament in so far as immovable property is concerned. In contradiction to that requirement the second part of Section 123 of the Act dealing with gifts of movable property, simply requires that gift of movable property may be effected either by a registered instrument signed as aforesaid or “by delivery”. The difference in the two provisions lies in the fact that in so far as the transfer of movable property by way of gift is concerned the same can be effected by a registered instrument or by delivery. Such transfer in the case of immovable property no doubt requires a registered instrument but the provision does not make delivery of possession of the immovable property gifted as an additional requirement for the gift to be valid and effective. If the intention of the legislature was to make delivery of possession of the property gifted also as a condition precedent for a valid gift, the provision could and indeed would have specifically said so. Absence of any such requirement can only lead us to the conclusion that delivery of possession is not an essential prerequisite for the making of a valid gift in the case of immovable property.

(iii) There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property. As noticed earlier, Section 123 of the Act does not make the delivery of possession of the gifted property essential for validity of a gift.

(iv) What is retained is only the right to use the property during the lifetime of the Donor which does not in any way affect the transfer of ownership in favour of the Donee by the Donor.

The effect of the above Judgment of the Hon’ble Supreme Court is that a gift of an immovable property merely on the ground that the Donor has reserved a life interest (or possession) cannot vitiate the gift provided other requirements of Section 123 of the Act are met with.

ADDITIONAL OVERRIDING PROVISIONS FOR SENIOR CITIZENS

The Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (“2007 Act”) provides for effective provisions for Maintenance and Welfare of Parents and Senior citizens.

Section 3 of 2007 Act has overriding effect. It says that 2007 Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than 2007 Act or in any instrument having effect by virtue of any enactment other than 2007 Act.

Section 23 of 2007 Act provides that where any senior citizen who, after the commencement of 2007 Act has transferred by way of gift or otherwise his property subject to the condition that the transferee (Donee) shall provide the basic amenities and basic physical needs to the transferor (Donor) and such transferee refuses or fails to provide such amenities and physical needs, the said transfer of property shall be deemed to have been done either by fraud or coercion or under undue influence and shall at the option of the transferor (Donor) be declared void by the tribunal.

The effect of the above referred provisions of 2007 Act is as under:-

(a) the senior citizen (who has attained the age of 60 years or above) can, after the commencement of 2007 Act i.e. from 29th December, 2007, gift the immovable property subject to the conditions referred in section 23 of 2007 Act; and

(b) 2007 Act has overriding effect over all other Acts and therefore, such conditions imposed while gifting the immovable property shall be considered as valid.

A DETAILED ANALYSIS OF THE COLLEGIUM SYSTEM FOR THE APPOINTMENT OF SUPREME COURT AND HIGH COURT JUDGES

by LFIAdmin | Feb 4, 2023 | Home

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | February 02, 2023

THE COLLEGIUM SYSTEM AND THE ROLE OF THE COLLEGIUM

The recent battle of words between the executive and the judiciary finds its genesis in the ever controversial topic, i.e, the collegium system.

The Chief Justice of India (CJI), along with the four senior most puisne judges of the Hon’ble Supreme Court of India, form the collegium, and this body carries out the administrative function of recommending judges for appointment to the Supreme Court and the High Courts in India, and transfer of judges of the latter.

Only the collegium can initiate the process of appointment and transfer of judges and it recommends the names of suitable individuals for the appointment or transfer to the Council of Ministers. The collegium independently initiates this process as and when required.

The collegium only takes decisions of appointment and transfer for the constitutional courts, i.e, the Supreme Court and the High Courts. Judges of the District Courts are appointed by the Governor of the State in consultancy with the High Court of the State [1].

It is imperative to note that this system to appoint and transfer judges to the constitutional courts is not mentioned in any provision of law and has come into existence on account of past judgements of the Apex Court.

ROLE OF COUNCIL OF MINISTERS AND THE PRESIDENT OF INDIA

The names for appointment and transfer are recommended by the collegium to the Council of Ministers, who then aid and advise the President on the final appointment or transfer [2] of judges. The President is bound to exercise this function in accordance with the advice given by the Council of Ministers. Judges are then appointed or transferred by the President under his hand and seal [3]. The collegium does not directly recommend names to the President. In a scenario where the made recommendation is not accepted by the Council of Ministers, the recommendation is sent back to the collegium for reconsideration. However, if the same names are recommended again by the collegium, the Council of Minsters is bound to accept those recommendations and to advise the President to appoint or transfer the judges accordingly.

CONSTITUENT ASSEMBLY DEBATES ON APPOINTMENT

In the pre-constitution era, judges were appointed at the absolute discretion of the Crown [4], subject only to criteria of eligibility. Judges also held office till the Crown’s pleasure [5]. The age limit for retirement of judges was introduced in The Government of India Act, 1935 [6]. During the drafting of our constitution, it was agreed by the Constituent Assembly that appointment must not be left to the executive, which is why a mandatory obligation to consult the CJI was put in place. Several recommendations for the appointment and transfer of judges were made such as constituting a board of members to appoint judges; to subject confirmation of appointment by two-third votes of Parliament; to consult Council of States for appointment. The debates, which lasted a week, resulted in the enactment of Article 124 of our constitution [7], and a consultative process for appointment and transfer originated between the executive and the judiciary.

THE THREE JUDGES CASE

After our Constitution came into force, judges were appointed by the President as per the advice of the Council of Ministers, however, subsequent to the consultation with the CJI, who was the senior most judge of the Supreme Court. Primacy in appointment, per se, did not vest in any functionary as decisions on appointment and transfer were taken after following a consultative process. The CJI did not enjoy the power to appoint or transfer judges, the President only appointed or transferred judges on advice of the Council of Ministers, and the Council of Ministers consulted and concurred with the CJI on appointment and transfer of judges. However, in 1973, Justice A. N. Ray [8] was made the CJI after superseding 3 senior judges. In 1977 again, Justice Khanna was superseded [9] due to the scathing remarks he made against the government [10] of the day. Prior to these 2 supplants, Prime Minister Nehru in the year 1964 appointed Justice Gajendragadkar as the CJI, superseding Justice Imam, the reason being that Justice Imam was suffering from a serious illness [11]. However, this was done after proper consultation took place between the Council of Ministers and the CJI.

As the consultative process broke down in 1973 and 1977, questions on primacy in appointment and transfer of judges arose, and the same was first decided in S. P. Gupta v. Union of India [12] (also known as the First Judges Case). Justice Bhagwati, in the case, held –

“The Chief Justice of India, the Chief Justices of the High Courts and such other Judges of the High Courts and of the Supreme Court as the Central Government may deem it necessary to consult, are merely constitutional functionaries having a consultative role, and the power of appointment resides solely and exclusively in the Central Government…

It would therefore be open to the Central Government to override the opinion given by the constitutional functionaries required to be consulted and to arrive at its own decision in regard to the appointment of the judge in the High Court or the Supreme Court…. Even if the opinion given by all the constitutional functionaries consulted by it is identical, the Central Government is not bound to act in accordance with such opinion…”

Thus, primacy rested in the opinion of the executive as held in the above mentioned case. It was held in the First Judges Case that since the executive is accountable to the public, primacy in appointment and transfer must be with the executive. Concurrence with the opinion of the CJI was held not to be a pre-requisite in appointment or transfer of judges by the Council of Ministers. The question of primacy and concurrence was re-visited in SCARA v. Union of India [13] (also known as the Second Judges Case) wherein the Supreme Court overruled the judgement of the First Judges Case.

The Court held that the provision for consultation with the CJI was introduced since it was realized that the CJI is best equipped to assess the worth of the candidate and his or her suitability for appointment as a judge. While the appointment must be a result of a participatory consultative process, in the event where there is an impasse due to disagreement between constitutional functionaries, the opinion of judiciary, which is symbolized in the opinion of the CJI, has primacy. Since personal traits of members are best known by the CJI, opinion of the CJI will not only have primacy, but will be determinative in the process of appointment and transfer. It was also held that the senior most judge of the Supreme Court shall be appointed as the CJI.

The Court held that the notion of the judiciary not being accountable to the public is a myth and has no real basis. In actual practice, the CJI and the Chief Justices of High Courts are held accountable for proper functioning of their courts and appointments made to their courts, not only by the public but even by the Bar. In response to the argument that provisions of the Constitution must be restricted to the interpretation which the framers intended, the court held that the current issue was not foreseen and therefore, was not discussed by the framers of the Constitution. The term ‘consultation’ in Article 124 of the Constitution was held to be understood as ‘concurrence’, meaning that the Council of Ministers are bound to concur with the opinion of the CJI in matters of appointment and transfer of judges. The Court went on to accept formation of a collegium, as the same was held more credible, and this collegium consisted of the CJI and the two senior most puisne judges of the Supreme Court. The primary function of this collegium would be to recommend names of suitable individuals for appointment and transfer in the constitutional courts to the executive. The executive had the option of refusing such recommendations after providing reasons to the collegium. However, if the same name was recommended again by the collegium, then the executive would be bound to accept such recommendation and appoint or transfer the individual.

In the Special Reference by the President, in exercise of authority granted by the Constitution of India, in 1998 [14] (also known as the Third Judges Case), the Supreme Court increased the number of senior most puisne judges in the collegium from two to four. It was a judgement which furthered the decision laid down in the Second Judges Case.

THE NATIONAL JUDICIAL APPOINTMENT COMMISSION

The National Judicial Appointment Commission (NJAC) Act was passed in 2014 which sought to introduce a body consisting of the CJI, two senior most puisne judges of the Supreme Court, the Law Minister and two eminent individuals (appointed by the CJI, Prime Minister and the Leader of Opposition), which would appoint and transfer judges in the constitutional courts. It sought to abolish the collegium system and to bring in transparency in the process of appointment and transfer of judges.

The Supreme Court held the NJAC Act as unconstitutional in 2015 [15]. The basis on which the Court held the Act as unconstitutional was the judgement passed in the Second Judges Case. The Court further held that the Act interfered with the independence of the Judiciary and would give primacy in appointment and transfer of judges to the political parties of the country. Since then, the Supreme Court has invited suggestions to improve the collegium system, and in 2017, the collegium publically uploaded its recommendations for appointment and transfer, along with reasons for the same. Recently, the collegium has even publically provided rebuttals to the objections raised by the executive, as seen in the appointment of Advocate Saurabh Kripal and Advocate Somasekhar Sundaresan, among others. However, arguments for right to reputation emerged, which remains imperative to consider.

CONCLUSION

The problems associated with the collegium system that had come to light was the cavalier attitude shown towards nepotistic elements and the total enigma surrounding the rationale behind appointments and transfers. It is unconscionable to have certain individuals exercising unfettered power. The consultative process must be followed to ensure cohesive constitutional functionaries. Independence of Judiciary is indeed of paramount importance, but the very purpose of democracy is defeated if only certain individuals exercise unalterable and uncheck power, as the collegium is accused of exercising.

On the other hand, political parties transcending in the domain of judiciary will end up corrupting the entire institution, and justice will remain unattainable. As said by Dr. B. R. Ambedkar, absolutism of any kind would result in a stunted growth of the nation. Keeping this in mind, there should be constructive communication between the executive and the judiciary, instead of the bickering of words which the nation has been a witness to.

[1] Article 233(1), Constitution of India

[2] Article 74(1), Constitution of India

[3] Appointment of judges in Supreme Court and High Court: Article 124(2) and 217(1) respectively; Transfer of judges of the High Court: Article 222(1)

[4] Section 101, Government of India Act, 1919

[5] Section 102, Government of India Act, 1919

[6] Section 200 for the Federal Court, Section 220 for the High Courts

[7] In the debates of the constituent assembly, appointment of judges is under Article 103

[8] Appointed as the 14th CJI, 1 day after the decision in Kesavananda Bharati case was delivered

[9] By Justice M H Beg, who became the 15th CJI

[10] In ADM Jabalpur v Shivakant Shukla, 1976 AIR 1207

[11] Supreme Court Observer

[12] AIR 1982 SC 149, 1981 Sup (1) SCC 87, 1982 2 SCR 365

[13] Supreme Court Advocates-on-Record Association v. Union of India, 1993 (WP/1303/1987)

[14] SR 1/1998 Re: Appointment and transfer of judges

[15] Supreme Court Advocates-on-Record Association v. Union of India, 2015 (WP/13/15)

PRACTICAL ASPECTS OF LIS PENDENS – SECTION 52 OF THE TRANSFER OF PROPERTY ACT, 1882

by LFIAdmin | Jan 10, 2023 | Home

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | January 09, 2023

Introduction

The principle of Lis Pendens – ‘Lis’ meaning litigation/dispute and ‘Pendens’ meaning pending – is embodied in this maxim, and it finds itself codified in Section 52 of the Transfer of Property Act, 1882. While the doctrine was found in the English case of Ballamy v. Sabine, Privy Council has observed its purpose as follows[1]:

“Broad purpose of Section 52 is to maintain status quo unaffected by act of any party to the litigation pending its determination. The applicability of the section cannot depend on matters of proof or strength or weakness of the case on one side or other in bona fide proceedings. To apply such test is to misconceive the object of the enactment”.

In simple words, the doctrine of Lis Pendens rules that neither party to the suit can transfer, or otherwise deal in anyway with the suit property in a manner which affects the rights of the other party. The doctrine thus, restricts alienation of the suit property, to avoid creation of any third party rights which further prolongs justice due to endless litigation.

Application of doctrine

The doctrine of Lis Pendens is applied as mentioned under section 52 of the Transfer of Property Act, 1882. However, it is paramount to note that by certain state amendments, it is mandatory to also register a notice of Lis Pendens in order to give effect to the doctrine.

Section 52 of Transfer of Property Act, 1882 was amended in the State of Maharashtra by Bombay (Amendment) Act 14 of 1939 [2] and the same reads as follows:

52. (1) During the pendency in any court having authority within the limits of India excluding the State of Jammu and Kashmir established beyond such limits by the Central Government, of any suit or proceeding which is not collusive and in which any right to immovable property is directly and specifically in question, if a notice of the pendency of such suit or proceeding is registered under section 18 of the Indian Registration Act, 1908, the property after the notice is so registered cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose.

(2) Every notice of pendency of a suit or proceeding referred to in sub-section (1) shall contain the following particulars, namely:-

(a) The name and address of the owner of immovable property or other person whose right to the immovable property is in question;

(b) The description of the immovable property the right to which is in question;

(c) The Court in which the suit or proceeding is pending;

(d) The nature and title of the suit or proceeding; and

(e) The date on which the suit or proceeding was instituted.

In its application in the State of Maharashtra, Section 18 of the Registration Act, 1908 has been amended as follows:

a) Delete the word “and” after clause (e)

b) After “and” in (e), add – notices of pending suits or proceedings referred to in Section 52 of the Transfer of Property Act, 1882

The effect is same in the State of Gujarat [3].

Thus, following are the necessary conditions for the application of the doctrine:

a) The suit shall be pending in a competent court.

b) The suit shall not be collusive/friendly in nature.

c) A right to immovable property must be directly and specifically in question.

d) A notice of Lis Pendens shall be registered under section 18 of The Registration Act, 1908 with the concerned Registrar/Sub-Registrar. [Applicable in the State of Gujarat and Maharashtra]

Effect of doctrine

On the application of the doctrine, any transfer made during the pendency of the suit is not void ab initio or illegal, but only makes the purchaser bound by the decision of the court [4]. The rights of the parties are only subservient to the decision of the court. If the transferor’s title is upheld, the sale will be valid and the transferee’s title will not be affected [5]. The doctrine of Lis Pendens is thus intended to strike at attempts made by parties to circumvent jurisdiction of court through private dealings to create third party rights [6].

Removal of Lis Pendens

In certain circumstances, a notice of Lis Pendens is filed to intentionally drag parties to litigation, and delay transactions of the immovable property. In such cases, court has the discretionary power to lift the operation of Section 52. The court itself has provided the aspects be borne by it when it considers exemption of operation to deprive plaintiff of fruits of litigation [7], though these are not exhaustive:

a) Can party be relieved only on a court imposing conditions? Is imposing conditions a prerequisite?

b) On facts pleaded by the plaintiff, will he prima facie, be entitled to the relief of specific performance of the contract?

c) If court concludes that specific relief cannot be granted, then while considering the alternative relief of damages which the plaintiff in the suit for specific performance is entitled to, should the plaintiff be secured?

d) If to be secured, should it only be the market value of the property on the date of the suit at time when the suit is filed be considered?

In a case, where there is no concluded contract between the parties, it would be highly inequitable to continue the cloud on the title of the property, especially when even if the plaintiff leads evidence, the chances of success are very dismal. Thus, operation of section 52 is lifted off from the suit premises, even if the notice of lis pendens was registered and fulfilled all conditions to be valid [8].

Conclusion

While registration of the notice is compulsory in Gujarat and Maharashtra, it is not so in rest of the states. This creates a peculiar problem. Transferors in a pending suit sell off the premises to unsuspecting purchasers who do not have any means to check if the premises are subject to any pending litigation. This jeopardizes the subsequent purchaser, who after investing all his earnings gets dragged in litigation, the result of which may deprive him out of the money invested as well as the possession of the suit [9].

The solution to this is that every state must make it compulsory to register a notice of Lis Pendens with the local registrar while filing a suit to dispute title of property. This will enable the subsequent purchaser to check if any litigation is pending on the premises. In cases where a Lis Pendens if filed to intentionally cloud genuine title, the courts have the power to remove the same after considering all the facts of the case, and the nature of the suit.

[1] Gouri Datt Maharaj v. S K Sukur Mohammed [AIR 1948 PC 147]

[2] The Transfer of Property and The Indian Registration (Bombay Amendment) Act, 1939

[3] Act 11 of 1960, S. 87; Gujarat A.L.O 1960

[4] Hardev Singh v. Gurmail Singh (2007)

[5] T G Ashok Kumar v. Govindammal & Anr. [2010 (Civil Appeal No .10325 of 2010)]

[6] Rajendra Singh & Ors. v. Santa Singh & Ors. [1973 AIR 2537, 1974 SCR (1) 381]

[7] Shantilal J Khona v. Anandrai Shivlal Dave [ 2002 (3) Bom. C.R. 346]

[8] Ambaji Developers & Ors v. Mukundrai D Sanghavi (2019)

[9] 12th Report by Law Commission of Karnataka (18.8.2010)

A CHANGE IN AFFIRMATIVE ACTION OF RESERVATION – AN IMPORTANT JUDGEMENT BY THE HON’BLE SUPREME COURT OF INDIA

by LFIAdmin | Dec 16, 2022 | Home

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | December 16, 2022

Introduction

The 103rd Constitution Amendment Act was assented by the President of India in January 2019, and this amendment introduced a 10% reservation for Economically Weaker Sections (herein referred as EWS) for admission in central-run public educational institutions and private educational institutions, and for employment in central public institutions.

The amendment added clause 15(6) and 16(6) in the constitution which allowed state action of providing for reservation for EWS, which in itself is a permissible affirmative action, but to the exclusion of categories mentioned in Article 15(4), 15(5) and Article 16(4).

Various petitions were filed before the Hon’ble Supreme Court of India challenging the amendment for being discriminative against backward classes and violating the basic structure of the constitution.

A Five Judge bench of the Hon’ble Supreme Court, in Janhit Abhiyan v. Union of India [1], delivered its judgement on November 7, 2022, upholding the constitutionality of the 103rd Amendment in a majority of 3:2.

Arguments in the case

Challenging arguments, by the petitioners, relied on Constituent Assembly debates, the Preamble and various judgements of the Hon’ble Supreme Court, to show that the concept of reservation itself was to address historic inequalities and that the special provisions for specific classes is an action of positive discrimination, which in itself forms a congenital feature of the basic structure of the constitution. The reservation which the amendment propounds to create is not for a class, but for a section of society which will exist indefinitely, based not on economic condition but financial incapacity and which rewards poor financial behaviour; thus is not reliable for reservation.

The petitioners pointed out that there is no reasonable classification for the creation of the class, and the created classification does not have any nexus to the object to be reached, thus violating Article 14 [2]. Economic criteria as the sole factor for reservation had not been accepted earlier, and the ceiling limit of 50% is breached by the said amendment [3]. A few arguments were made that the amendment could be sustained if the phase “other than” was read down [4] by the court to be “in addition to”. Lastly, reservation cannot be used as a poverty alleviation scheme to reach development goals.

In support of the amendment, the Union of India argued that the amendment does not violate the basic structure, but fosters it, and that a constitutional amendment can be struck down only when it changes the identity of the constitution [5]. Creation of a new class fosters ‘economic justice’ and reservation for EWS is maintainable, as seen under Right of Children to Free and Compulsory Education Act, 2009 [6].

It was further argued that exclusion of classes already mentioned in Article 15(4) and Article 16(4) does not violate equity code and is necessary to avoid dual benefit. The 10% ESW reservation is in addition to the 49.5% existing reservation for categories under the said provisions. Moreover the concept of equality and reservation is changing and evolving, and such affirmative action must be positively interpreted to benefit the targeted class.

The Minority view

The minority judgement was delivered by Justice J Ravindra Bhat and the then Chief Justice of India, U U Lalit. They held that economic criteria for educational reservation under Article 15 was acceptable, however EWS reservation under Article 16 for governmental jobs has to be struck down. The exclusion of SC/ST/OBC is a constitutionally prohibited form of discrimination. They form the majority of EWS, and depriving them of the said benefit directly benefits the upper class which has faced no historic discrimination, defeating the very intent of reservation. Article 16(4) is premised on adequate representation, and reservation for EWS is not for lack of representation, thus being unqualified.

A breach of the 50% ceiling limit itself will result in compartmentalisation, and any reservation for EWS will lead to virtual deletion of Article 15(4) and 16(4). The ceiling limit existed to balance reservation and open competition. The amendment legitimizes discrimination by exclusion to benefit targeted group. However the EWS, i.e the targeted group, itself is created by exclusion of economically weaker sections of SC/ST/OBC who remain economically weaker due to being subjected to discrimination in all dimensions.

The Majority view

The majority judgement was delivered by Justices Dinesh Maheshwari, Bela Trivedi and J B Pardiwala, which upheld the 103rd Amendment and accepted creation of provisions for reservation of EWS as permissible affirmative action to ensure inclusion and held that the 50% ceiling limit is not sacrosanct and has been by-passed previously in certain circumstances. The classification for EWS is not an unreasonable one and has a clear purpose of achieving substantive equality. Justice Trivedi held “Just as equals cannot be treated unequally, unequals cannot be treated equally”, and the exclusion of SC/ST/OBC is valid. Reservation, in itself, is not to be continued forever and must be revisited to fulfil the object of having a casteless and classless society. Justice Maheshwari held that compensatory discrimination, wherever applied is exclusionary in character and acquires worth only after exclusion of other classes.

The argument to read down the specific provision was rejected as the intent of the legislature is clear and unambiguous from the provision itself. Since the 10% reservation is in addition to the existing reservation, the question of reducing reservation of existing communities does not arise. Since the objective of reservation is to provide a level playing field to an underprivileged class, creation of the same for EWS after taking in account the current situation, the state is permitted to provide reservation for EWS.

The Effect

Since the constitutional amendment has been upheld, various states seek to increase reservation above 50%. Jharkhand Assembly passed a bill [7] to increase reservation to a total of 77% for SC/ST/OBC. However an imperative point to note is that the judgement in the said case allows reservation only for EWS, which is a new form of affirmative action. The decision of 50% cap applies to caste based reservation, and not new forms of affirmative actions. Breaching this 50% cap for communities already included in this 50% might be struck down by the court for being in violation of the ceiling limit.

Conclusion

The Majority judgement took note of the UNGA Resolution passed on 25th October 2015, for the eradication of poverty and all its forms. State action, in the form of the 103rd amendment, attempts to eradicate poverty by providing for additional reservation of 10% for EWS. However such reservation will continue for a long period as there will always be poor. Reservation as a solution is itself for a limited period. Now that affirmative action has created reservation for a new class, there is no restriction on how many other classes may be reserved by such action, leaving the question of social equality for the general and unreserved class, an already much debated issue.

[1] WRIT PETITION (CIVIL) NO. 55 OF 2019
[2] Article 14: Equality before law
[3] INDIRA SAWHNEY v. UOI – AIR 1993 SC 477
[4] Doctrine of reading down: Power of courts to interpret meaning of a provision to save it from it being declared illegal.
[5] M NAGARAJ v. UOI [WRIT PETITION (CIVIL) 61 OF 2002]
[6] Society for unaided private schools of Rajasthan v. Union of India (2012)
[7] 11th November, 2022

Can a woman be punished under Section 354 of IPC? (Assault or Criminal force on a woman with the intent to outrage her modesty)

by LFIAdmin | Dec 15, 2022 | Home

By Shivam B. Trivedi, Advocate

rshivamtrivedi798@gmail.com | December 14, 2022

Introduction

The general understanding is that a woman cannot be charged under Section 354 of IPC, however, the true interpretation differs.

Section 354 of the Indian Penal Code, 1860 (“IPC”) is enacted with the objective of maintaining decent behaviour in the society and to protect women who are subject to criminal force and assault. If any person (irrespective of gender) uses criminal force on any woman with intent to outrage her modesty or with the knowledge that her modesty will be outraged, he or she will be punished.

Conviction of a woman under section 354 of IPC

Usually, the charge under S.354 of IPC is levied upon men. There has not been any noteable judicial precedent highlighting the conviction of a woman under S.354 of IPC. However, the court of Metropolitan Magistrate, Mazgaon, Mumbai, in the year 2022 in case no.7000138/PW/2021took cognizance of the complaint filed under S. 354 of IPC against a woman and after considering the evidence, sentenced her (being the accused) to imprisonment for a term of one year with fine of Rs. 5,000/-. (State of Maharashtra v/s Rovena Aadnya Amit Bhosle) holding that the Accused (being a woman) should be protective and sensitive towards women.

Essentials of Sec 354 of IPC

The essential conditions necessary to be satisfied to get a conviction under S.354 of IPC are as follows:-

~The presence of an assault/criminal force/ physical force;

~The physical force must be used with the intention of outraging the modesty of a woman or there must be knowledge that such act is likely to outrage the modesty of a woman;

However, it has been observed that if there is no intention to outrage the modesty or if it has not been proved beyond reasonable doubt that the intention was malafide in nature then conviction under S.354 of IPC would not be possible. [Bhanu Singh v/s State Of Chhattisgarh,2022]

Analysis

If and when it is proved to the satisfaction of the court, after considering the evidence submitted during the course of trial, that the accused person who is charged with an offence under S.354 of IPC is convicted, then the court shall sentence the Accused person (irrespective of gender) to imprisonment which shall not be less than one year but which could extend to five years and the convict shall also be liable to fine. The offence u/s. 354 of IPC can be committed by any man or woman. A woman can assault or use criminal force over other woman as equally and effectively as any man. The pronoun ‘he’ used in the expression “that he will thereby outrage her modesty” must therefore be taken u/s 8 of IPC as importing a male or female. Therefore, u/s 354 of IPC, a man as well as a woman both can be held guilty. It cannot be maintained that woman is exempted from any punishment under this section.

Conclusion

From the aforesaid, it could be concluded that S.354 of IPC is gender neutral in nature and the general presumption that S.354 of IPC could only be invoked against men has been changed and women in the society could take shelter under this section against any form of aggravated assault not just against men but against anyone. However, the aforesaid view of the writer is absolutely personal and subject to corrections.

EFFECT OF NOMINATION IN A CO-OPERATIVE HOUSING SOCIETY

by LFIAdmin | Nov 18, 2022 | Home

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | November 19, 2022

INTRODUCTION

​Myth is existing in the mind of general public that upon death of a member of Co-operative Housing Society, the Nominee of such member becomes the Owner of the Flat.

There is a general practice in housing societies of members making nominations for their respective flats. The nomination form is then submitted to the secretary or chairman of the society. After the member’s demise, the society in its meeting takes note that the member has passed away and based on the nomination form, inducts the nominee as a member and notes the same on the share certificate. It becomes imperative to understand what the purpose and legal effect of making a nomination is. A nominee holds the flat in a fiduciary capacity, i.e. as a trustee for the legal heirs of the deceased till such time the legal heirs are determined by the applicable succession laws. A nominee does not become the owner of the flat by virtue of the nomination. In order to become an owner of a flat, it will have to be received by way of gift, Will, family arrangement or other such similar document.

LEGAL POSITION

​

The Maharashtra Co-operative Societies Act, 1960 (“the said Act”) governs co-operative societies. Section 30 of the said Act deals with transfer of interest on death of a member. This provision has come up for interpretation before the Bombay High Court on several occasions as there is invariably a dispute that arises between the nominee and the legal heirs regarding the vesting of ownership rights in the flat of deceased member.

In the case of Ramdas Shivram Sattur v. Rameshchandra Popatlal Shah, the Bombay High Court followed its previous decision in the case of Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar and held that a nominee does not become the owner of the properties in question. The purpose of nomination is to protect the rights of the deceased member in the subject matter of nomination till the legal representatives of the deceased take appropriate steps and to give a valid discharge to the society.

A recent judgment of the Bombay High Court in the case of Karan Vishnu Khandelwal v. Honourable Chairman/Secretary Vaikunth (Andheri) Co-operative Housing Society Ltd. & Ors. has once again brought to the fore the effect of nomination in case of a co-operative housing society versus the rights of legal heirs. While this judgment reiterates the well settled legal position that a nominee is merely a trustee and shall hold the flat in his capacity as trustee till the time the legal heirs are ascertained, the manner in which it is drafted is likely to cause some confusion. The brief facts of the case are set out hereunder to better appreciate the findings.

Brief facts

1. One, Mr. Mannalal Khandelwal (“Mannalal”) was the owner of a flat in Vaikunth (Andheri) Co-operative Housing Society, Mumbai (“the said Flat”).

2. During his lifetime, he made a nomination in favour of his grand son (son of a predeceased son), the Petitioner herein. The nomination was duly acknowledged by the managing committee in its meeting and recorded in the nomination register maintained by the society.

3. Thereafter, Mannalal died without leaving behind a will.

4. After his death, one of his sons, Rajendra (Respondent No. 2) made an application to the society seeking transfer of membership and issue of share certificate in his name. He also submitted an NOC and indemnity bond from his brother, Krishnakumar. On this basis, Rajendra sought 2/3rd share and interest in the said Flat. The society rejected Rajendra’s application.

5. Rajendra preferred an appeal before the Deputy Registrar Co-operative Societies. The Deputy Registrar allowed the appeal and held that since Respondent No. 2 had acquired 2/3rd right in the said Flat and to that extent, his interest be noted in the society record. In consequence, the Deputy Registrar acknowledged 2/3rd undivided right of Respondent No. 2 and 1/3rd right of the Petitioner in the said Flat and directed the society to make an entry in its records.

6. In revision, the Divisional Joint Registrar upheld the order of the Deputy Registrar and dismissed the revision application of the Petitioner.

7. Aggrieved by the order of the Divisional Joint Registrar, the Petitioner approached the Bombay High Court.

Decision

The Bombay High Court set aside the order of the Divisional Joint Registrar on broadly two grounds (a) the impugned order was in breach of the principles of natural justice and (b) the impugned order was against the law. It is the latter ground that we are concerned with.

Analysis

The Bombay High Court placed reliance on the judgment of the Supreme Court of India in the case of Indrani Wahi v. Registrar of Cooperative Societies, Section 30 of the said Act and the Maharashtra Cooperative Societies (Amendment) Act, 2019 whereby Section 154B-13 came to be inserted in the said Act.

Section 154B-13 reads as under –

“154B-13. Transfer of interest on death of a Member

On the death of a Member of a society, the society shall transfer share, right, title and interest in the property of the deceased Member in the society to a person or persons on the basis of testamentary documents or succession certificate or legal heirship certificate or document of family arrangement executed by the persons, who are entitled to inherit the property of the deceased Member or to a person duly nominated in accordance with the rules:

Provided that, society shall admit nominee as a provisional Member after the death of a Member till legal heir or heirs or a person who is entitled to the flat and shares in accordance with succession law or under will or testamentary document are admitted as Member in place of such deceased Member:

Provided further that, if no person has been so nominated, society shall admit such person as provisional member as may appear to the committee to be the heir or legal representative of the deceased Member in the manner as may be prescribed.”

What emerges from the above is that a society is empowered to transfer the right of a deceased person on the basis of (i) testamentary documents, (ii) succession certificate, (iii) legal heirship certificate, (iv) family arrangement or (v) duly made nomination. However, it is expressly clarified that a nominee shall be admitted as a provisional member. Therefore, a nominee is merely a trustee who holds the flat till the time the legal heirs are ascertained.

In the case at hand, Mannalal had made a valid nomination in favour of his grandson (the Petitioner). However, he had died intestate, i.e. without leaving behind a Will. Therefore, the Society was directed to transfer the flat to the Petitioner in his capacity as nominee (trustee) and admit him as a provisional member till the time Rajendra (Respondent No. 2) was able to obtain a succession certificate or legal heirship certificate or testamentary document, as the case maybe.

What the Divisional Joint Registrar had done was in effect, ascertained the shares of the parties as per the applicable succession laws, given that Mannalal had died intestate. While this would likely be the eventual manner in which the ownership rights in the said Flat devolve, the Bombay High Court did not want to give a go-by to the nomination and the compulsory requirement of obtaining a legal heirship certificate or letters of administration without will that would have to be obtained by the heirs of Mannalal given that the flat is situated in Mumbai. The Bombay High Court therefore, directed the society to admit the Petitioner as a provisional member and call upon Respondent No. 2 to furnish the necessary documents on the basis of which the legal ownership in the flat would eventually vest. At first glance, it may appear that the Bombay High Court held in favour of the nominee as against the legal heirs. However, what it has done is to recognize the nominee as an interim trustee till the time Respondent No. 2 procures the necessary legal documents acknowledging his ownership right and the ownership right of all other legal heirs in the flat.

Conclusion

​

In light of the Maharashtra Cooperative Societies (Amendment) Act, 2019 and the aforesaid judgments of the Supreme Court of India and Bombay High Court, it becomes amply clear that in the eyes of a law, a nominee is a trustee and does not acquire ownership rights in a flat by virtue of nomination. Therefore, if the intent of a member is to vest ownership rights in a person, he/she will have to do the same by way of gift, Will, family arrangement or other such document; a nomination alone will not suffice. It is also important for societies to take note of this so that after a member’s demise, the ownership rights in the flat finally vest in the legal heirs or such person as maybe named in the Will or family arrangement or other such document, and not in the nominee.

LEGALIZING ABORTION UPTO 24 WEEKS FOR ALL WOMEN; A LANDMARK JUDGEMENT

by LFIAdmin | Oct 25, 2022 | Home

By Ritabh Singh, 4th Year Law Student, Government Law College, Mumbai,

ritabhsingh44@gmail.com | October 25, 2022

INTRODUCTION

The Hon’ble Supreme Court judgment pronounced on the 28th September 2022, in X v. The Principal Secretary [1], declared that all woman have a right to safe abortion upto 24 weeks. The Hon’ble Supreme Court declared that the distinction based on the marital status of a women in Rule 3B(c) of the Medical Termination of Pregnancy Rules, 2003 (MTP Rules) is “artificial and constitutionally unsustainable”, and single women with pregnancies upto 24 weeks cannot be denied safe and legal abortion. Section 3B(c) allows termination of pregnancy upto 24 weeks if there is change of marital status during the ongoing pregnancy (widowhood and divorce). The Court also recognised marital rape, a much contraversal topic, as a legal ground for abortion under Rule 3B(a).

Looking back at the history of abortion in India, there has always existed social stigma against abortion, even when the women is married. Thus women were forced to choose an unsafe method of abortion, which seriously impacted the health of the woman, many cases resulting to death. In fact, about 8 women die each day due to unsafe abortions, and 67% of the abortions carried out are unsafe [2]. The Medical Termination of Pregnancy Act, 1971 (MTP Act), was enacted to legalize abortions, and found its basis from the Abortion Act, 1967 passed in the United Kingdom. The MTP Act legalized abortions, and as years have passed, the legislature has made much more strict rules for who can terminate a pregnancy as people have shown preference for a male child over a female child. It is also imperative to note that the MTP Act is an exemption to Section 312 of the IPC [3].

THE CASE

The challenge to the provisions were made by a 25 year old single woman who wanted to terminate her pregnancy after the Delhi High Court stated that consensual relationships are not covered under MTP Rules 2003. The Hon’ble Supreme Court, in an order passed on 21th July 2022, allowed the petitioner to abort her 24 week pregnancy as allowing her an unwanted pregnancy would have been contrary to the intent of Section 3(2) of the MTP (Amended) Act, 2021. However, the Court further heard the matter as it dealt with a ‘substantive question of law’ which was – is the distinction between married and single women under Rule 3B(c) of the MTP Rules 2003 constitutionally valid?

THE JUDGMENT

As mentioned before, the Court held that the rule was infact discriminatory and violative of Article 14. The Court held that the law be given a purposive interpretation. In the MTP Act, Explanation 2 of Section 3(2) contained the following words –

“Where any pregnancy occurs as a result of failure of any device or method used by any married woman or her husband for the purpose of limiting the number of children, the anguish caused by such unwanted pregnancy may be presumed to constitute a grave injury to the mental health of the pregnant woman.”

The same were amended in 2021, and Explanation 1 of Section 3(2) says – “For the purposes of clause (a), where any pregnancy occurs as a result of failure of any device or method used by any woman or her partner for the purpose of limiting the number of children or preventing pregnancy, the anguish caused by such pregnancy may be presumed to constitute a grave injury to the mental health of the pregnant woman.”

The Court after interpreting the intention of the legislature held that the legislature intended to clarify the scope of Section 3(2) and recognized that pregnancies could happen outside marriage as well. Even the statement of objects and reasons of the MTP Amended act indicated that the primary concern was to increase access to safe and legal abortions. The statement of object and reasons also do not distinguish between married and unmarried women, thus encompassing all women.

The court held that Rule 3B(c) cannot be read in isolation and has to be read with other sub-clauses of 3B. The other sub-clauses are as follows –

(a) survivors of sexual assault or rape or incest;

(b) minors;

(d) women with physical disabilities [major disability as per criteria laid down under the Rights of Persons with Disabilities Act, 2016 (49 of 2016)];

(e) mentally ill women including mental retardation;

(f) the fetal malformation that has substantial risk of being incompatible with life or if the child is born it may suffer from such physical or mental abnormalities to be seriously handicapped; and

(g) women with pregnancy in humanitarian settings or disaster or emergency situations as may be declared by the Government.

The court held that none of these sub-clauses distinguish between married and unmarried women. Thus the court gave Section 3B(c) a purposive interpretation, read it with explanation 1 of Section 3(2) of the MTP (Amended) Act, 2021 and held that any woman can abort her pregnancy upto 24 weeks. The court held that such laws are ‘provider-centric’ laws and must be applied accordingly.

CONCLUSION

A landmark judgment on a sensitive issue has not only upheld bodily autonomy of women, but also accepted marital rape in the scope of abortion. This judgment has removed the unreasonable classification made by law. Laws cannot be static and must evolve as times change. After the Supreme Court of United States overturned Roe v. Wade [4], abortion rights became uncertain. The Supreme Court of India has rightly protected women’s right on abortion and her reproductive autonomy.

However, according to law, it is the Registered Medical Practitioner (RMP) who still holds strong power on a women who is seeking abortion, and even though the women can seek help in a Court of Law, RMPs still hold fundamental power in the choice of a women to terminate her pregnancy.

[1] SLP (C) No 12612 of 2022

[2] BMJ Global Health Reports

[3] Section 312 – Causing Miscarriage, IPC (1860)

[4] 410 U.S. 113 (1973)

Is Fraud an Arbitrable Dispute? / Can Allegations of Fraud be Decided by an Arbitrator?

by LFIAdmin | Oct 25, 2022 | Home

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | October 25, 2022

INTRODUCTION

In commercial transactions, there are often allegations of siphoning off of funds, lack of transparency in maintaining accounts and disposing of or encumbering property in a manner contrary to what was agreed upon between the parties. The circumstances surrounding such acts/omissions and the consequences of such acts/omissions may be coupled with allegations of fraud. While alleging fraud, it is important to note that such allegations may affect the arbitrability of the dispute if there is an arbitration agreement between the parties. It is therefore, imperative to understand what facets of fraud are arbitrable and what facets are not.

ANALYSIS

What is meant by ‘arbitrable’ or ‘arbitrability’?

In the case of Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd.[1], the Supreme Court laid down 3 facets or tests of arbitrability. The three facets of arbitrability, relating to the jurisdiction of the Arbitral Tribunal, are as under:

(i) Whether the disputes are capable of adjudication and settlement by arbitration?

(ii) Whether the disputes are covered by the arbitration agreement?

(iii) Whether the parties have referred the disputes to arbitration?

Another important indicator given by the Supreme Court in Booz Allen’s case was to ascertain whether the disputes relate to rights in rem or rights in personam. In this regard, the Supreme Court held as follows.

“38. Generally and traditionally all disputes relating to rights in personam are considered to be amenable to arbitration; and all disputes relating to rights in rem are required to be adjudicated by courts and public tribunals, being unsuited for private arbitration. This is not however a rigid or inflexible rule. Disputes relating to subordinate rights in personam arising from rights in rem have always been considered to be arbitrable.”

It would not be out of place to mention that the Arbitration Act, 1996 (“the Act”) does not of itself set out what disputes are arbitrable. It does not exclude any category of disputes treating them as non-arbitrable either. However, Section 34(2)(b) of the Act lays down that if ‘the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force,’ the same will be a ground for setting aside the arbitral award. Similar language is also used in the context of Sections 48(2) and 57(1)(b) of the Act. What will then require to be shown is that there is a law which makes the subject-matter of the dispute incapable of settlement by arbitration.

The courts have held that certain kinds of disputes may are not capable of adjudication through the means of arbitration. The following categories of disputes are generally treated as non-arbitrable (a) criminal offences, (b) matrimonial disputes, (c) guardianship matters, (d) insolvency and winding up matters and (e) testamentary matters.

Meaning of fraud

“15. “Fraud” is a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his detriment. Fraud can be of different forms and hues. Its ingredients are an intention to deceive, use of unfair means, deliberate concealment of material facts, or abuse of position of confidence. The Black’s Law Dictionary defines “fraud” as a concealment or false representation through a statement of conduct that injures another who relies on it..”[2]

Is fraud an arbitrable dispute?

In the case of A. Ayyasamy v. A. Paramasivam & Ors.[3], the question of arbitrability of fraud came up before the Supreme Court. The brief facts of the case are set out hereunder to better appreciate the findings and decision of the Supreme Court. The parties to the lis were brothers who had entered into a deed of partnership for the purpose of carrying on a hotel business in partnership. The eldest brother took charge of the administration of the hotel on the assurance that he would carry on the business in a disciplined manner. It was also agreed between the brothers that the daily collection of money would be deposited the very next day in the hotel’s current account. However, the eldest brother failed to deposit the day-to-day collection into the bank account as promised. Further, the eldest brother drew a cheque on the hotel’s current account for a substantial sum in favour of his son without the knowledge and consent of the other brothers. There was also an allegation that the eldest brother would keep the hotel account books with him and not permit the other brothers to examine the same. The aggrieved brothers filed a suit seeking a declaration that as partners they were entitled to participate in the administration of the said hotel and sought a permanent injunction against the eldest brother from interfering with their right to participate in the administration of the hotel. The eldest brother challenged the maintainability of the suit on the ground that there was an arbitration agreement between the parties. The brothers resisted the challenge to maintainability on the ground that serious allegations of fraud had been alleged by them and the same could only be decided by a civil court and not an arbitral tribunal. Two courts held that considering that there were serious allegations as to fraud and malpractices committed by the eldest brother in respect of the finances of the partnership firm and the case does not warrant to be tried and decided by the arbitrator and a civil court would be more competent which has the means to decide such complicated matter.

Before coming to the decision of the Supreme Court, it is pertinent to note that the Supreme Court drew a distinction between ‘serious fraud’ and ‘fraud simpliciter’ and held the former to be non-arbitrable and the latter to be arbitrable.

“18. …However, at the same time, mere allegation of fraud in the pleadings by one party against the other cannot be a ground to hold that the matter is incapable of settlement by arbitration and should be decided by the civil court. The allegations of fraud should be such that not only these allegations are serious that in normal course these may even constitute criminal offence, they are also complex in nature and the decision on these issues demands extensive evidence for which the civil court should appear to be more appropriate forum that the Arbitral Tribunal…”[4]

“23. …It, thus, follows that those cases where there are serious allegations of fraud, they are to be treated as non-arbitrable and it is only the civil court which should decide such matters. However, where there are allegations of fraud simpliciter and such allegations are merely alleged, we are of the opinion that it may not be necessary to nullify the effect of the arbitration agreement between the parties as such issues can be determined by the Arbitral Tribunal.”

The Supreme Court finally held that the allegations of purported fraud were not so serious and could be taken care of by the arbitrator. Reversing the judgments of the two lower courts that had rejected the applications filed under Section 8 of the Act, the Supreme Court allowed the appeal.

CONCLUSION

As set out hereinabove, allegations of fraud may affect the arbitrability of the dispute depending on the seriousness of the fraud alleged. Resultantly, the nature of proceedings filed by the affected party would also be determined by the fraud alleged.

[1] (2011) 5 SCC 532

[2] A. Ayyasamy v. A. Paramasivam & Ors. (2016) 10 SCC 386

[3] Ibid

[4] Ibid

Deemed Conveyance and Certain Practical Difficulties

by LFIAdmin | Mar 20, 2022 | Home

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | March 20, 2022

INTRODUCTION

Section 11 of the Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (“the Act”) requires the promoter to convey all his right, title and interest in the land and building in favour of the co-operative society or organization of flat purchasers. There is often a delay on the part of the promoters in executing such conveyance. Such delay prejudices the flat purchasers and their right to fully enjoy and exploit their property. The concept of deemed conveyance seeks to remedy this.

ANALYSIS

If the promoter fails to convey his right, title and interest in the land and building within 4 months from the formation and registration of the society or company, or within such time as maybe agreed upon by and between the promoter and flat purchasers, the society can make an application to the competent authority for issuing a certificate/an order stating that such society is entitled to have a unilateral deemed conveyance. Such application is required to be accompanied by true copies of the registered agreements for sale and all other relevant documents, including the occupation certificate, if any.

On receipt of such application, the competent authority shall make enquiry, verify the authenticity of the documents submitted and give the promoter a reasonable opportunity to be heard. If satisfied, the competent authority shall issue a certificate to the Sub-Registrar stating that it is a fit case for enforcing unilateral execution of a conveyance deed conveying the right, title and interest of the promoter in the land and building in favour of the society.

On receipt of such certificate and unilateral instrument of conveyance, the Sub-Registrar shall give the promoter an opportunity to show cause why such unilateral instrument of conveyance should not be registered as ‘deemed conveyance’. If satisfied, the Sub-Registrar shall register the instrument as ‘deemed conveyance’.

As the name suggests, deemed conveyance is a unilateral execution of a conveyance deed whereby the promoter is deemed to have conveyed his right, title and interest in the land and building in favour of the society of flat purchasers, followed by the unilateral registration thereof under the Registration Act, 1908. The provision for deemed conveyance was inserted in the interest of flat purchasers. However, there are certain practical difficulties that arise that prevent flat purchasers from taking benefit of this provision or prove to be a hindrance.

CERTAIN PRACTICAL DIFFICULTIES THAT ARISE

​One issue that usually arises is that of stamp duty. If all the flat purchase agreements of the society members (including agreements for shops, garages and parking) are duly stamped and registered and the full FSI potential of the land on which the society building stands has been utilised, the instrument of deemed conveyance shall be treated as a supplementary document to such agreements and the stamp duty and registration fees payable on the instrument of deemed conveyance will be nominal.

However, if any one or more society member’s flat purchase agreements or agreements for shops, garages and/or parking are not duly stamped and registered, stamp duty liability on such agreements will have to be cleared. Further, if the FSI potential of the land on which the society building stands has not been fully utilized, stamp duty will be payable on the present market value of such unutilized FSI, making the stamp duty payable on the instrument of deemed conveyance, substantial. Notification dated 12th April, 2012 sets out the detailed procedure. Given the property prices in Mumbai, this stamp duty liability may run into several lakhs or crores.

Another issue that arises in some cases is that the promoter has the right to develop only a portion of the land which is part of a larger undivided plot. There are also cases in which phase wise redevelopment is done of multiple buildings standing on the same sub-divided plot. When an order of deemed conveyance is passed in such cases, disputes often arise about the area of land conveyed under such order/certificate of deemed conveyance.

Computing or quantifying the entitlement of a society applying for deemed conveyance may not always be easy as the society maybe entitled to the land on which the society building stands, as well as proportionate right in common areas, internal access roads, gardens, etc. together with other societies.

Lastly, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter. Defects in title of the promoter cannot be remedied by execution of an instrument of deemed conveyance nor are the rights of original owners of the land affected or influenced by an order of deemed conveyance or the registration of the certificate thereafter. Original owners can raise disputes of title, computation and quantification of area, FSI, etc. by filing a civil suit. The civil suit will be decided on its own merits unaffected by any order of deemed conveyance that may have been passed.

CONCLUSION

When a promoter fails to fulfil his obligations of conveying his right, title and interest in the land and building, the competent authority steps in to fulfil such obligations to avoid hardship to the flat purchasers. However, to take the benefit of the provision of deemed conveyance, flat purchasers and societies must have all their documents in place and be willing to comply with all applicable provisions of law. Flat purchasers and societies must also have sufficient funds available with them as the stamp duty payable on an instrument of deemed conveyance may run into several lakhs or crores in certain cases. Lastly, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter.

Remedies Available to Original Owner of Land After Order of Deemed Conveyance under MOFA

by LFIAdmin | Dec 24, 2021 | Home

By Nazaqat Lal, Advocate & Solicitor, Bombay High Court

nazaqat_lal@hotmail.com | Dec 24, 2021

[*The relevant sections and statutes have been mentioned in brackets]

INTRODUCTION

After taking possession of flats and forming co-operative housing societies, flat owners often have to wait for years till the developer conveys his right, title and interest in the land and building to the co-operative housing society. This is a hindrance to co-operative housing societies as the transfer of title in the land and building in their favour remains in abeyance till such time. More often than not, a situation arises when the society owns the building consisting of flats and apartments but not the land underneath the building. Such situation presents several difficulties in utilization and exploitation of the full potential of the property. The concept of deemed conveyance under Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 (“the Act”) (also popularly known as “MOFA”) seeks to remedy this.

ANALYSIS

Section 11 of the Act read with Rule 9 of the rules framed thereunder casts an obligation on the promoter (as defined therein) to convey his right, title and interest in the land and building to the co-operative housing society or company formed by the flat takers or apartment owners. If the promoter fails to do this within 4 months from the formation and registration of the society or company, or within such time as maybe agreed upon between the promoter and flat purchasers, the society can make an application to the competent authority for deemed conveyance. As the name suggests, deemed conveyance is a unilateral execution of a conveyance deed whereby the promoter is deemed to have conveyed his right, title and interest in the land and building in favour of the society of flat purchasers, followed by the unilateral registration thereof under the Registration Act, 1908.

In some cases, the promoter has the right to develop only a portion of the land which is part of a larger undivided plot. There are also cases in which phase wise redevelopment is done of multiple buildings standing on the same sub-divided plot. When an order of deemed conveyance is passed in such cases, disputes often arise about the area of land conveyed under such deemed conveyance. Computing or quantifying the entitlement of a society applying for deemed conveyance may not always be easy as the society maybe entitled to the land on which the society building stands, as well as proportionate right in common areas, internal access roads, gardens, etc. together with other societies. The question that therefore, arises for consideration is what would be the appropriate forum and nature of proceedings to be initiated for adjudication of such disputes involving questions of title, quantification of area entitlement and FSI, etc. arising from an order of deemed conveyance. Would the remedy be by way of filing an appeal, civil suit or writ petition?

To answer this, it is important to understand the jurisdiction being exercised by the competent authority under Section 11 of the Act and what rights, if any, are being determined by an order of deemed conveyance.

In Mazda Construction Company & Ors. v. Sultanabad Darshan CHS Ltd.[1], the Bombay High Court explained the scope of scope of powers exercised by the competent authority while issuing an order of deemed conveyance as under:

“20. To my mind, reading of Sections 10 and 11 together with Section 5A would make it amply clear that what is to be performed by the Competent Authority is a duty and obligation which the promoter is to perform in law. That is to convey the title and execute the documents according to the agreement. If that is the duty which is to be performed by the promoter, but which he fails to perform, then, the Competent Authority steps in to fulfill it. That is a duty towards the flat purchasers and which duty cannot be avoided except at the cost and pains of legal proceedings including a criminal prosecution. In these circumstances and when sections 10 and 11 are read together and harmoniously with the preceding sections including those which contain the particulars of the agreement, then, it becomes absolutely clear that what has to be conveyed even by a deemed conveyance, which is an unilateral act and which enables the flat purchasers to acquire the Promoter’s right, title and interest in the land and the building. Therefore, it cannot be said that an unilateral deemed conveyance conveys something more than what belongs to the Promoter. Section 11(1) provides for conveyance of Promoter’s right, title and interest in the land and building as is clear from the words “his right, title and interest….” appearing therein. I am not in agreement with Mr. Samdani that there are no guidelines guiding and enabling the Competent Authority to grant a deemed conveyance and therefore, the powers are likely to be abused or exercised arbitrarily in every such case. There are inbuilt checks and safeguards inasmuch as what is to be issued is a certificate entitling a unilateral deemed conveyance. It is not a document which stands alone or is a distinct transaction. It is a grant or conveyance in terms of what the agreement between parties stipulates and provides for being conveyed to the flat purchasers. Therefore, the Applicant is permitted to apply to the Competent Authority u/s 11(3) and such application is to be accompanied by true copies of the registered agreements for sale executed by the Promoter with each individual member/ flat purchaser and other relevant documents. It is to further that and to insist on the promoters fulfilling their obligations within the prescribed period, but noticing that their failure has resulted in hardship to flat purchasers, that the Legislature has stepped in. To my mind, this is not a power which can be exercised by the Competent Authority in ignorance of or by brushing aside the earlier provisions and contents of the agreement with the flat purchasers. Equally, the Competent Authority has to take into consideration the contents of other relevant documents.” (emphasis supplied)

In the case of M/s Mahanagar Partnership Firm & Ors. v. District Deputy Registrar of Co-operative Societies (Pune City), Pune & Ors. [2], the Bombay High Court held as follows.

“9. In the case of Mazda Construction Company Vs. Sultanbad Darshan CHS Ltd, Writ Petition No.3912 of 2012, it is held that issue of title in respect of the property cannot be gone into by the Competent Authority under the provisions of the MOFA and the same can be decided only by the Civil Court. In paragraph 17 of Angelina Randolph Pereira’s case (supra), it is held that contentions regarding title in respect of property in question or adjudication in respect of the property in question or adjudication in respect of entitlement of the exact quantification of FSI on the plots in question cannot be gone into the proceedings under section 11 of the MOFA. The Competent Authority cannot decide validity of the agreements between the parties. The order granting Deemed Conveyance does not conclude issue of right, title, interest in the immovable property. The petitioners can still file substantive suit of title claiming the appropriate reliefs. Merely because order of Deemed Conveyance is passed and certificate of title is issued by the Competent Authority under section 11, the petitioners are not precluded from seeking adjudication of their right in respect of the suit property by filing suit. All such contentions can be gone into in a properly instituted suit.

10. In view of the consistent view taken by this Court in the aforesaid decisions, I do not find that any case is made out for invocation of powers under Article 227 of the Constitution of India. It is made clear that if any suit is filed by the petitioners for adjudication of title in respect of the suit property, the same can be decided without being influenced by the order of Deemed Conveyance passed by the Competent Authority and certificate of title issued by the Competent Authority in favour of the second respondent. Subject to this clarification, Petition fails and the same is dismissed with no order as to costs.” (emphasis supplied)

A similar view was also taken by the Hon’ble High Court at Bombay in M/s. Chintamani Builders vs. State of Maharashtra & Ors. [3], Angeline Randolph Pereira vs. Suyog Industrial Estate Premises Co-operative Society Limited [4] and Bhalchandra Gaurishankar Pandya & Ors vs. State of Maharashtra & Ors. [5]

CONCLUSION

When a promoter fails to fulfil his obligations of conveying his right, title and interest in the land and building, the competent authority steps in to fulfil such obligations to avoid hardship to the flat purchasers. However, a society being a successor in title of the promoter cannot claim any rights higher than that of the promoter. Moreover, the flat purchase agreements are an internal arrangement or agreement between the promoter and flat purchasers to which the original owners may or not maybe party. In case the original owners are not party to such agreement, their entitlement will not be affected or influenced by the order of deemed conveyance or the registration of the certificate thereafter. Original owners can raise disputes of title, computation and quantification of area, FSI, etc. by filing a substantive civil suit by pointing out relevant documents as also by leading oral evidence and not by way of invoking the extra-ordinary writ jurisdiction. An order granting deemed conveyance will not conclude such issues. The civil suit will be decided on its own merits unaffected by any order of deemed conveyance that may have been passed.

[1] Order dated 31.08.2012 in Writ Petition 3912 of 2012 (Bombay High Court)

[2] Order dated 6.12.2018 in Writ Petition (St.) No. 31966 of 2018 (Bombay High Court)

[3] Order dated 11th August, 2016 in WP No. 2839 of 2013

[4] 2018 (6) ALL MR 729

[5] Order dated 6th August, 2021 in WP No. 2948 of 2015