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)

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

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

APPLICABILITY OF SECTION 79A OF THE MAHARASHTRA COOPERATIVE SOCIETIES ACT FOR REDEVELOPMENT OF SOCIETY’S PROPERTY IN MAHARASHTRA

by LFIAdmin | Nov 5, 2021 | Home

By Nazaqat Lal, Advocate & Solicitor

nazaqat_lal@hotmail.com | Nov 05, 2021

INTRODUCTION

Buildings of co-operative housing societies are being redeveloped on a large scale in the state of Maharashtra. Prior to 2009, a number of complaints were received from members against managements of co-operative societies in which redevelopment was taking place. Some of the common complaints included not taking the members in confidence in the redevelopment process, lack of transparency in the tender process, no orderliness in the work of architects and project consultants, no preparation of redevelopment project report, no consistency in agreements with different developers, etc. At that time, there was no concrete policy to address the aforesaid grievances. As a result, a study group was formed to study the complaints received at various levels. After consultation with all stakeholders, the study group opined that it was essential to frame regulations for redevelopment of buildings of co-operative housing societies. Accordingly, the State Government issued directives under Section 79-A (“the Directives”) of the Maharashtra Co-operative Societies Act, 1960 (“the Act”).

ANALYSIS

The Directives lay down a step by step process for undertaking redevelopment of co-operative housing societies. The process commences with the calling of a special general body meeting of the society to discuss the redevelopment of the society’s building and ends with the original members being allotted flats in the redeveloped building. One of the primary objectives of the Directives is to ensure transparency and make the process democratic.

A number of cases started being filed alleging non compliance with these Directives and consequently, praying for the redevelopment to be stopped. A question that naturally arose was whether compliance with the Directives was mandatory or directory and accordingly, whether any deviations were permissible.

In a series of judgments passed by various benches over the years, the Bombay High Court has consistently taken the view that the Directives are directory and not mandatory.

In the case of Maya Developers v. Neelam R. Thakkar & Ors.[1], the developers sought interim reliefs against certain members who were not handing over peaceful and vacant possession despite the execution of the development agreement. The Defendants alleged that the Directives under Section 79-A had not been followed. Some specific non-compliances alleged were no detailed feasibility report, no transparency and the selection of the Developer was not just haphazard but was contrived to benefit Maya Developers, one of whose partners was a relative of a managing committee member. It was further contended that there was no decided case yet on the nature of the guidelines issued under Section 79-A and that these guidelines had a binding statutory force. The Bombay High Court held that what the 2009 Directive seeks to set in place are a set of guidelines.

“74. …This is also apparent from the fact that the Government chose to issue these under Section 79A rather than some other section of the Act. What is set out is a broad policy; and this stands to reason, for not every single provision of this Directive lends itself to strict compliance. Clauses 1, 2, 5, 7, 8 and 10 all use the word ‘should’, not ‘must’ or ‘shall’. Clause 11 in terms says that the Development Agreement ‘should’ contain some conditions and provisions but these are specifically subject to the terms and conditions approved by the General Body Meeting of the Society. This Directive must be read as a whole, and not in the manner Mr. Pai suggests by plucking out one clause here and another there. Read thus, it is clear that the whole of the 2009 Directive is recommendatory, not obligatory. If it were otherwise, and to be read as Mr. Pai would have me do, it would undermine the authority of the society in general meeting, and the fundamental democratic underpinnings of cooperative societies. When Mr. Pai asks that is it possible that a majority can decide the fate of all, the answer must be an unequivocal yes; that is the basis of the entire edifice of the MCSA, subject to specific statutory exceptions. It is impossible to accept his submission that the 2009 Directive in mandatory. It is, as Mr. Kapadia says, a broad road map, and was brought into existence to provide guidance when there were far too many problems in redevelopment of societies. Material compliance is more than sufficient; and it in no way undermines or detracts from the overall authority of the general body of a society’s members. It is sufficient if participation, notice and disclosure are ensured. Where majority decisions are consistent with material compliance with the provisions of the Directive, that is surely enough.”

The case of Maya Developers (supra) is also important as it discusses in detail the jurisdiction of the High Court in light of Section 91 of the Act.

In the case of M/s National Properties v. Sindhi Immigrants CHS & Ors.[2], the developer sought a mandatory injunction directing certain members to hand over vacant and peaceful possession pursuant to the development agreement executed with the society and majority members. It was the Plaintiff’s case that the defendants were all related to one Kukreja Group, an entity that had participated in the tender process but was not selected. Subsequently, this entity, through its members and relatives purchased a few flats and tried to stall the redevelopment process. The Defendants alleged collusion between the Plaintiff and the society alleging that the Plaintiff’s proprietor was the secretary of the society. It was also the Defendants’ case that the Directives under Section 79-A had not been complied with. The Hon’ble Bombay High Court held that the consents were initially granted and at that time the contesting defendants were not even flat holders. Further, once the society approved the proposal by the requisite majority, it is not open for the minority individual members to obstruct the redevelopment process. As far as alleged noncompliance of the Directives issued under Section 79-A was concerned, the Court followed the line of judgments in the case of Maya Developers (supra) and Kamgar Swa Sadan Co-operative Housing Society Ltd.[3] and held that the Directives under Section 79-A was merely recommendatory and did not have statutory force.

In the case of Abhanga Samata CHS v. Parag Arun Binani & Anr.[4], a solitary member had challenged the process of redevelopment on the ground that the Directives under Section 79-A had not been followed in letter and spirit and the selection of the developer itself was vitiated by fraud. Some of the non compliances alleged included not inviting tenders by issuing advertisements in newspapers, society not producing written consent letters from members, absence of video conferencing of meetings, etc. The trial court held in favour of the member and injuncted the redevelopment process. The society and developer appealed against the trial court’s order. Their main contention was that all the decisions had been taken by the majority and such decisions would be binding on the dissenting minority. Moreover, the Directives under Section 79-A were directory and not mandatory, and therefore, substantial compliance was sufficient. The appellate court (the Bombay High Court) set aside the trial court’s order and held that the findings by the trial court were contrary to the material on record. Moreover, the irregularities noted by the trial court cannot displace the decisions taken by the majority members of the society. It further held that the Directives under Section 79-A are not mandatory and substantial compliance is sufficient. Decisions taken democratically cannot be interfered with unless the same were caused by fraud or misrepresentation.

CONCLUSION

From the aforesaid judgments and the judgments relied upon therein, it becomes amply clear that the Bombay High Court has consistently taken a view that the Directives are directory and not mandatory in nature. Therefore, a redevelopment would not ordinarily be stopped on the ground of lack of strict compliance with the Directives. The Court has also held that the State Government is empowered to issue directions in public interest for the purpose of proper implementation of the Act and the Directives are required to be followed only when the members are unable to come to a decision on their own. The Bombay High Court has given paramount importance to the decision of the majority and held that the same would be binding on the minority. The Court has also taken into consideration that the buildings undergoing redevelopment are usually in a condition that is hazardous for the inhabitants to continue residing in and therefore, have been reluctant to intervene in stopping redevelopment processes. In order to get an order injuncting redevelopment, very grave instances of fraud, collusion and/or misrepresentation would have to be shown that severely prejudice the rights of the co-operative housing society and its members at large.

[1] Notice of Motion (L) No. 834 of 2015 : 2016 SCC Online Bom 6947 : (2016) 6 Bom CR 629

[2] Notice of Motion No. 285 of 2016 in Commercial Suit No. 509 of 2016 (Bombay High Court)

[3] 2018 SCC OnLine Bom 1319

[4] Appeal from Order (St) No. 7776 of 2021 (Bombay High Court)

SALE OF HUF PROPERTY INVOLVING A MINOR

by LFIAdmin | Oct 26, 2021 | Home

By Nazaqat Lal, Advocate & Solicitor

nazaqat_lal@hotmail.com | Oct 26, 2021

Introduction

Section 8 of the Hindu Minority and Guardianship Act, 1956 (“the Act”) provides that sale or transfer of immovable property of a minor requires the natural guardian of such minor to take prior permission of court. The section further casts an obligation on the court not to provide such permission except in the case of necessity or for an evident advantage to the minor. Disposal of a minor’s immovable property without court’s prior permission is voidable at the instance of the minor or any person claiming under him. The intention of the Legislature to protect the property and interest of minors till the time they attain majority is abundantly clear.

Section 12 of the Act states that no guardian shall be appointed for the minor’s undivided interest in joint family or HUF property where such property is under the management of an adult member of the family. The question that naturally arises from a combined reading of these two sections is whether Section 8 of the Act is applicable to sale or transfer of joint family property by a Karta wherein a minor’s undivided interest is involved. Alternatively, is prior court permission required by the Karta at the time of sale or transfer of joint family property that involves a minor’s undivided share? This question was answered in the negative by the Bombay High Court[1] and Supreme Court of India[2].

The Bombay High Court placed reliance on Sections 4 and 6 of the Act to answer the aforesaid question. Section 4 defines the term ‘guardian’ and Section 6 sets out the natural guardians in the case of a Hindu minor and the order of priority of persons who are entitled to be guardians to Hindu minors.

Analysis

The opening words of Section 6 are as under.

“6. Natural guardians of a Hindu minor.—The natural guardians of a Hindu minor; in respect of the minor’s person as well as in respect of the minor’s property (excluding his or her undivided interest in joint family property), are— …” (emphasis supplied)

These words were interpreted and explained by the Bombay High Court as follows.

“7. …The words “excluding his or her undivided interest in joint family property” which have been put in brackets make it clear that undivided interest of a Hindu minor is excluded from the operation of the provisions of the Act and the subject-matter with which the Act deals is limited to guardians in respect of minor’s person or in respect of minor’s property other than his undivided interest in joint family property, whether they be natural guardians or testamentary guardians or guardians appointed or declared by Court. The concept of a guardian in respect of undivided interest in the joint family property is thus specifically excluded from the purview of the Act. The powers which a Hindu father therefore has, as a natural guardian of his minor sons under Hindu Law, are kept intact and are not in any way affected by the provisions of the Hindu Minority and Guardianship Act so far as the undivided interest of a Hindu minor in the joint family property is concerned.

8. The restrictions contained in s. 8, therefore, do not apply in respect of the undivided interest of a minor in joint family property and consequently s. 8 does not debar the manager or karta of a joint Hindu family from alienating joint family property including the interest of minor without obtaining the previous permission of the Court, even if the manager or karta, happens to be the natural guardian in respect of the separate property of any one or more of the minor coparceners. Of course, the alienation would have to be justified under Hindu law but s. 8 does not require that any previous permission of the Court should be obtained before effecting such alienation. Under Hindu law a manager and karta of a joint Hindu family can alienate joint family property so as to bind the interest of minor coparceners in such property provided the alienation is either for legal necessity or for the benefit of the estate. If the manager and karta happens to be the father, he has certain additional powers of alienation under Hindu law and in exercise of those powers he can alienate joint family property so as to bind the interest of his minor coparceners in such property. These powers are not at all curtailed or affected in any way by the provisions of the Hindu Minority and Guardianship Act.”

The Supreme Court answered the question on similar lines.

“5. With regard to the undivided interest of the Hindu minor in joint family property, the provisions afore-culled are beads of the same string and need be viewed in a single glimpse, simultaneously in conjunction with each other. Each provision, and in particular Section 8, cannot be viewed in isolation. If read together the intent of the legislature in this beneficial legislation becomes manifest. Ordinarily the law does not envisage a natural guardian of the undivided interest of a Hindu minor in joint family of the property. The natural guardian of the property of a Hindu minor, other than the undivided interest in joint family property, is alone contemplated Under Section 8 where under his powers and duties are defined. Section 12 carves out an exception to the rule that should there be no adult member of the joint family in management of the joint family property, in which the minor has an undivided interest, a guardian may be appointed; but ordinarily no guardian shall be appointed for such undivided interest of the minor. The adult member of the family in the management of the Joint Hindu Family Property may be a male or a female, not necessarily the Karta. The power of the High Court otherwise to appoint a guardian, in situations justifying, has been preserved. This is the legislative scheme on the subject. Under Section 8 a natural guardian of the property of the Hindu minor, before the disposes of any immovable property of the minor, must seek permission of the court. But since there need be no natural guardian for the minor’s undivided interest in the joint family property, as provided Under Sections 6 and 12 of the Act, the previous permission of the Court Under Section 8 for disposing of the undivided interest of the minor in the joint family property is not required. The joint Hindu family by itself is a legal entity capable of acting through its Karta and other adult members of the family in management of the joint Hindu family property. Thus Section 8 in view of the express terms of Sections 6 and 12, would not be applicable where a joint Hindu family property is sold/disposed of by the Karta involving an undivided interest of the minor in the said joint Hindu family property. The question posed at the outset therefore is so answered.”

The Act has drawn a distinction between joint family property in which a minor has undivided interest and other property of a minor. Consequently, the rules applicable to sale and transfer of both types of property are also different; the latter being more stringent. However, in both cases, necessity and benefit of the minor or estate, as the case maybe, are a sine qua non.

Conclusion

While the Legislature has kept the interest of minors paramount, it has to also ensure that joint family property remains easily transferable. If Section 8 was applicable to sale and transfer of joint family property, thereby, requiring prior court permission to sell or transfer joint family property in which a minor’s undivided interest was involved, it would become very difficult to effect sales and transfers of joint family property as at most times, there would be at least one minor in the Hindu undivided family.

[1] Sakharam Sheku Shinde v. Shiva Deorao Jamale [1973 SCC OnLine Bom 89 : (1974) 76 Bom LR 267]

[2] Narayan Bal & Ors. v. Sridhar Sutar & Ors. [AIR 1996 SC 2371 : (1996) 8 SCC 54]

THE UNCERTAINTY AROUND CRYPTOCURRENCIES IN INDIA

by LFIAdmin | Oct 18, 2021 | Home

By Isha Thakur, Advocate

ishav1998@gmail.com | Oct 18, 2021

“Bitcoin was created to serve a highly political intent, a free and uncensored network where all can participate with equal access” –Amir Taaki, British-Iranian Programmer

In the state of worldwide pandemic and imposition of subsequent phases of the lockdown, the country has witnessed tremendous economic changes with a fair share of individuals losing their jobs to the impact of it on the demand-supply chain and a wide range of commodities and services revaluating their prices unstably throughout the year. However, in such a succession of events, the majority of us came across frequent advertisements on cryptocurrencies or bitcoins. Virtual currency, popularly known as cryptocurrency, is based on blockchain technology and has become a global phenomenon known to the majority of the people in the world. This switch to virtual currencies qua ‘cryptocurrencies’ as an alternate source of income and investment showcased the immunization of it from the ongoing affairs of the pandemic. Admittedly, a recent report by broker discovery and comparison platform BrokerChooser, reveals India having the highest number of Crypto owners at 10.07 Crore.

Before overseeing the impressive user additions and the legality behind it, it is pertinent to note that cryptocurrency or bitcoins, or digital currency are not interchangeable terms. Digital currency is a broad concept, referring to all monetary assets that are in digital form. Virtual currency is a subset of digital currency and cryptocurrency is a subset of virtual currency. Virtual currencies (VC), being an unregulated form of digital currency, with minimum governmental inference and control and with cryptocurrency using cryptography technology to secure and authenticate currency transactions, Bitcoins (a form of cryptocurrency) has attracted an increasing amount of user additions which has just exponentially increased ever since the Reserve Bank of India (RBI) ban was lifted in March 2020.

The use of cryptocurrency has always been a point of debate with its legality being a mystery to the public. The lack of a traditional government or bank-backed system to regulate its use makes cryptocurrencies target several concerns such as it being a conduit to money laundering and promotion of terrorist activities. The RBI, being concerned about the same, had issued several advisories since 2013 informing various stakeholders about the negative ramifications of cryptocurrencies. Consequently, the RBI issued a circular dated 6th April 2018 which prohibited banks and other entities from trading in virtual currencies. The circular directed the entities regulated by RBI, firstly, not to deal in virtual currencies neither to provide services for facilitating any person or entity in dealing with nor settling virtual currencies and secondly, to exit the relationship with such persons or entities, however, transfer of cryptocurrency from one person to another was not prohibited. At the time of issuance of the circular by the RBI, there was no specific legislation dealing with the transactions in virtual currencies.

The circular was subsequently challenged by the Internet and Mobile Association of India (“Petitioner”) on the ground that it was manifestly arbitrary, based on non-reasonable classification and it imposes disproportionate restrictions. The Petitioner contended that VCs are not legal tenders and do not qualify as money but tradable commodities/digital goods due to which they fall outside the regulatory framework of RBI. The Petitioner further argued that the circular violated the fundamental right to practice any profession or to carry on any occupation, trade, or business under Article 19(1) (g) of the Constitution, as it does not pass the test of proportionality vis-à vis the blanket prohibition imposed on the regulated entities.

The Supreme Court of India after extensively considering the legality of the circular along with relevant provisions and the international position laid down some essential viewpoints: –

Nature of Cryptocurrency

Various courts in different jurisdictions have interpreted cryptocurrencies in different categories ranging from property to commodity to non-traditional currency to payment instrument to money to funds. Though VCs are not recognized as legal tenders as contended by the Petitioner, they are, however, capable of performing most of the functions of real currency, and hence, they cannot be considered as just goods or commodities.

RBI’s power to regulate or prohibit Virtual Currencies

The Supreme Court laid down that the RBI has requisite power vested with it to regulate activities of such nature. The Court referred to the preamble, statement of objects and reasons, and various provisions of the Reserve Bank of India Act, 1934 to substantiate its stance that anything that may pose a threat to or have an impact on the financial system of the country can be regulated by RBI. The Supreme Court further noted that the term ‘regulate’ entails the word ‘prohibit’ in it. The court explained that the circular does not impose a prohibition on the use of or the trading in VCs. It merely directs the entities regulated by RBI not to provide banking services to those engaged in the trading or facilitating the trading in VCs. Hence, RBI has and shall have the requisite power to frame policies and issue directions to banks with respect to transactions relating to cryptocurrencies.

Infringement of Article 19(1)(g) of the Constitution

The blanket ban imposed by the RBI on providing banking services to cryptocurrency businesses was held to be violative of Article 19 (1)(g) of the Indian Constitution where the practice to carry on any trade or business was hampered by the circular. The Court opined that although the RBI is vested with the power to form regulations from an act formulated by the parliament, the regulations cannot supersede the rights and freedoms guaranteed by the Constitution of India. The Court, thus, accepted the contention of the Petitioner and held that the Circular was disproportionate because none of the RBI’s regulated entities had ‘suffered any loss or adverse effect directly or indirectly, on account of the interface that the VC exchanges had with any of them.

The Supreme Court’s aforesaid judgment in Internet and Mobile Association of India v. Reserve Bank of India (2020) is a very small victory in favor of the crypto entities in India. Though the aforesaid judgment doesn’t completely adjudicate on the legality of cryptocurrency, however, the Supreme Court has acknowledged that a prohibitory approach and a blanket ban on the trade of cryptocurrencies stand in stark contrast with those countries having the same constitutional values as ours. Countries like China, Bangladesh, and Algeria have placed a ban on the purchase, sale, and use of virtual currencies, specifically, cryptocurrency, however, there are countries like Singapore, Canada and UK that have adopted a regulatory approach towards the trade-in cryptocurrencies.

Conclusion

The Parliament of India, having taken consideration of the same, put a hold on Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 which was to be introduced aiming at prohibiting all the private cryptocurrencies and facilitating a regulatory framework for introducing the official digital currency which in turn would be issued by the RBI. Though Cryptocurrency is not illegal in India, however, nor is it regulated. The concern of the RBI and other stakeholders responsible for the financial stability of the country is justified and the need of the hour keeping in view the negative ramifications that cryptocurrency could lead to especially at the time where the country is fighting the Covid-19 pandemic as well as an economic downfall. India has a very good opportunity of studying the regulatory approach taken by other democratic countries and execute a regulatory architecture for a new digital world.

RIGHT TO DIE WITH DIGNITY

by LFIAdmin | Oct 6, 2021 | Home

By Isha Thakur, Advocate

ishav1998@gmail.com | Oct 06, 2021

“Life sans dignity is an unacceptable defeat and life that meets death with dignity is a value to be aspired for and a moment for celebration.” – CJI Dipak Misra

The concept of right to life as envisaged under Article 21 of the Indian Constitution is ‘the procedural Magna Carta protective of life and liberty, as recognized and classified by Justice V.R. Krishnan Iyer in 2007. Such right constituting the heart of the Constitution of India is not just restricted to the act of simply being alive or animalistic existence but emphasizes the right to lead a life with basic human dignity and decency. Over the years, through the way of progressive precedents established by the Honorable Courts in India, the right to life under the Constitution of India has received the broadest possible interpretations thereby establishing and attaching several aspects and facets to it and emphasizing the minimum standards of quality required to live a meaningful life. However, at the same time, there arises a need to acknowledge certain circumstances where some individuals desire to put an end to their lives attributable to the slow degradation of the quality of life. Therefore, the primary question that arises here is if a person has the inherent right to lead a dignified life, would he be entitled to a dignified procedure of death as well?

With the progression of law, the postulation of individual autonomy has gained much significance and has been identified as an essential aspect of human dignity across various jurisdictions. The Right to die is a concept that is based on the opinion that a human being is entitled to make any decision about ending his or her life. Possession of this right is often associated and understood to mean that a person with a terminal illness or without the will to continue living, should be allowed to end their own life or to decline life-prolonging treatment. Right to die or as popularly also known as euthanasia has always been a matter of debate not only in India but in all the countries around the world. While some of the countries have legalized Euthanasia completely, both active and passive, some have different stands on both, partially legalized and some have totally banned and condemned the mere practice of it.

The Supreme Court of India, in the case of Common Cause (A Regd. Society) v. Union of India, while institutionalizing and recognizing the right to die with dignity as an essential facet of the right to live with dignity under Article 21, has emphasized the importance of individual autonomy and self – determination to enable people to execute living wills and attorney authorizations that would be indicative of a person’s choice to discontinue treatment on a later stage if they are terminally ill or in a permanent vegetative state. Therefore, while on one hand, the right to life creates a compelling state interest in preserving human life, on the other hand, it also assures the individual autonomy to make decisions with respect to his/her own body.

The Petitioner in the present case is a registered society who had written to several authorities and state governments with respect to the entitlement of the essential right to die. On receiving no response from such authorities, in 2005, it filed a public interest litigation before the Supreme Court of India on the grounds of:

• seeking direction for legal recognition of living will;
• for the system of certification of passive euthanasia; and
• praying for the declaration that the Right to die with dignity is an essential aspect of Article 21 of the Indian Constitution.

Considering the inconsistent opinions in Aruna Shanbaug v. Union of India (2011) and Gian Kaur v. State of Punjab (1996) with respect to the aforementioned right and euthanasia, the matter was referred to a five-judge bench. The judgment was delivered pursuant to extensively considering the law pertaining to the right to life and right to die along with relevant precedents and the international position in various jurisdictions, the Supreme Court enumerated the following conclusions:

Death with dignity

The Constitution Bench held that the right to life indicates the existence of such right extends up till the end of natural life, thereby establishing a dignified procedure of death. The right to life and liberty would be meaningless unless it encompasses within its sphere individual autonomy and dignity, hence, the said right was held to be part of fundamental right enshrined under Article 21 of the Constitution. The Court held that the right to life includes smoothening of the dying process of a terminally ill person or who is in a constant vegetative state without any hope of recovery.

Passive and Active Euthanasia

The Supreme Court has laid down that the interest of a terminally ill patient or in a persistent vegetative state shall override the interest of the State in protecting the lives of its citizens. Such an individual can make a choice of premature extinction of his life as an inherent right under Article 21. The Constitution Bench, however, clarified that Article 21 covers within its ambit only passive euthanasia and not active euthanasia. While legalizing and permitting the process of passive euthanasia, the Court noted a distinction between cases in which physician decides not to provide or continue to provide for treatment and care, which could or might prolong his life, and those in which he decides to administer a lethal drug even though with the object of relieving the patient from pain and suffering.

Living Will, Attorney Authorisations, and Advanced Directives

An advance medical directive is an individual’s advance exercise of his autonomy on the subject of the extent of medical intervention that he wishes to allow upon his own body at a future date, when he may not be in a position to specify his wishes. The right to execute an advance medical directive is a step towards the protection of aforesaid rights by an individual. The Court recognized Advance Directives akin to a Living Will through which persons of sound mind and in a position to communicate, relate and comprehend can indicate the decision relating to the circumstances in which withholding or of medical treatment can be resorted to.

Guidelines for executing Living Wills

An adult of sound mind and having the capacity to communicate, relate and comprehend the consequences of executing the document, without any form of coercion or compulsion, may voluntarily execute such a written document in the presence of two independent attesting witnesses. Such document must clearly reflect informed consent and unambiguously instruct as to when medical treatment may be withdrawn and must specify which treatments are not to be administered. Further, it should state the name of a guardian who will give consent to withdraw treatment in accordance with the advance directive. The document must be signed by a Judicial Magistrate of First Class (JMFC) and one copy of such document is preserved by the JMFC in his office, in addition to keeping it in digital format. The JMFC after satisfying himself with the informed consent of the executor and the contents of the document forwards a copy of the same to the Registry of the jurisdictional District Court for registration and preservation.

Procedure for executing Advanced Directives

The treating physician of the patient shall refer the matter to the concerned hospital who shall constitute a Medical Board consisting of the Head of the Treating Department and at least three experts with experience in critical care and with overall standing in the medical profession. The decision of the Medical Board, after examining the patient, shall be communicated to the Jurisdictional Collector who shall then constitute another Medical Board comprising the Chief District Medical Officer as the Chairman and three expert doctors. If on visiting the patient, this board is in consonance with the opinion of the board constituted by the hospital, the decision will be communicated to the JMFC. The JMFC will then visit the patient at the earliest to authorize the implementation of the document.

The Supreme Court in the present case has through this judgment endeavored to balance two facets of Article 21. One thing which every man deserves in his life is the Right to life as well as the Right to die with dignity. The sanctity of human life does not imply the forced continuation of existence in pain and suffering. For a person suffering from a terminal illness with no hope of recovery, it would be inhumane to compel him to continue to live a painful life. These instances are not of extinguishing life but only of accelerating the process of natural death, which has already commenced.

EFFECT OF BEQUEST UNDER THE WILL TO AN ATTESTING WITNESS

by LFIAdmin | Oct 31, 2021 | Home

By Nazaqat Lal, Advocate and Solicitor

nazaqat_lal@hotmail.com | Nov 01, 2021

Section 63 of the Indian Succession Act, 1925 (“the Act”) requires a will to be attested by at least two witnesses. The attesting witnesses must sign or affix their thumb impression or mark, in the presence of the testator. The section does not permit or provide for delegation of such power by the attesting witnesses.

Unlike other documents, a will speaks from the death of the testator. By executing a will, a testator intends to the living the carrying out of his wishes after his death. Therefore, the initial burden of proving the due execution, attestation, genuineness of the will and sound mind of the testator falls on the attesting witnesses.

Section 67 of the Act deals with the effect of gift to an attesting witness. It states that any benefit or bequest given to an attesting witness or the attesting witness’s spouse, shall be void. However, a legatee under a will does not lose his legacy by attesting a codicil which confirms the will. The object of Section 67 is to avoid chances of possible collusion or undue influence. It is pertinent to note that benefit or bequest given to an attesting witness does not affect the validity of the will and the will shall be deemed to sufficiently attested.

Another important aspect is the applicability of Section 67 of the Act. Section 67 does not apply to wills made by Hindus, Buddhists, Sikhs or Jains. Therefore, any benefit or bequest to an attesting witness or the attesting witness’s spouse under a will made by a Hindu, Buddhist, Sikh or Jain would not be void. In the case of Jose v. Ouseph & Ors.[1], a Division Bench of the Kerala High Court explained the applicability of Section 67 as follows.

“7. Section 67 of the Indian Succession Act, 1925 deals with the effect of gift to attesting witness. This Section is not applicable to Wills of Hindus by virtue of Section 57 read with Schedule III of the Indian Succession Act and as such legatees under the Will of such persons do not forfeit their legacy on becoming attesting witnesses. But in the case on hand the parties are Christian and Section 67, if attracted, will be applicable to them. Legacy to the attesting witness of a Will is void under Section 67…”

This decision of the Kerala High Court was followed by the Delhi High Court in the case of Anand Burman v. State[2].

“7. The learned counsel for the petitioner, however, points out that Section 67 of the Indian Succession Act is placed in Part-VI of the said Act and Section 57 of the Act, which deals with applicability of the said part, to the extent it is relevant, specifically provides that only those provisions of the said part which are set out in Schedule-III shall, subject to the restriction and modification specified therein, apply to the Will and Codicils made by any Hindu, Buddhist, Sikh or Jain made on or before 1.1.1927. He further points out that Chapter-III of the said Act does not refer to Section 67 of the Act which clearly shows that the aforesaid provisions do not apply to the Will in question. He further pointed out that Section 58 of the Act clearly provides that provisions of Part-VI shall not apply to testamentary succession to the property of any Hindu, Buddhist, Sikh or Jain save and except as provided in Section 57 of the Act. The net effect of these provisions, when read together, is that the bequest made to the attesting witnesses of the Will, executed by a Hindu, is not void under Section 67 of the said Act. Therefore, the bequest made to the petitioner is not void. As regards his competence as an attesting witness, Section 68 of the said Act specifically provides that no person, by reason of interest in, or of his being an executor of, a Will shall be disqualified as a witness to prove the execution of the Will or to prove the validity or invalidity thereof. Therefore, Shri Ashok Chand Burman was a competent witness to prove execution of the Will executed by late Smt. Sudha Burman.”  (emphasis supplied)

This contention was accepted by the Delhi High Court and reliance was placed on Jose v. Ouseph & Ors. (supra). Accordingly, probate was granted by the Delhi High Court.

[1] AIR 2007 Kerala 77

[2] Test. Cas 25/2010, Judgment pronounced on July 27, 2012

A GUIDE TO REVERSE MORTGAGES IN INDIA

by LFIAdmin | Sep 21, 2021 | Home

By Aishwarya Vashishth, Lawyer

16jgls-avashishth@jgu.edu.in | Sep 21, 2021

Introduction

“Reverse Mortgage” means “an agreement under which an owner of a primary residential property borrows funds from a Bank/Financial Institution (being the Lender) against the security of his ownership rights by mortgaging the same and receives Loan amounts by way of regular tax-free payments (monthly/quarterly/yearly) from the Lender without having to sell his residential property during the validity of the mortgage”.  The amounts received under Reverse Mortgage are considered as loans and not income, hence, the same do not attract any tax liability.  The benefit of Reverse Mortgage is available only to Senior Citizens.

The concept of Reverse Mortgage which is very popular in countries like the U.S.A. and U. K. is also prevalent in India

The Reverse Mortgage is normally “a life annuity” for a Senior Citizen. It is often found that a Senior Citizen has a decent home to live in but has no means to maintain themselves and live a decent and dignified life. In Reverse Mortgage, the Capital Value of the residential property is converted into an annuity over the lifetime of the Owner and their spouses.  In return for the Reverse Mortgage, the Lender makes a lump sum payment to the Borrower or periodic payments during his/her life for a certain fixed period. In Reverse Mortgage one is not required to make any monthly mortgage payments as long as the Borrower (and/or his/her spouse) continues to stay in the residential property as the Owner. There are no income qualifications. The house continues to be in the name of the Borrower during the validity of the mortgage. The Reverse Mortgage is available only on primary residence (in existence of at least 20 years) and not on a second home/house or any commercial property.

Reading the Fine Print

Each bank/financial institution lending under Reverse Mortgage in India has different norms and terms of its own. Depending on the valuation of the residential property, the financial facility is granted up to 3 years. The Borrower can utilize the amounts for various purposes like renovation and maintenance of the house, family’s medical or emergency expenditure, day-to-day living expenses, and similar other personal expenses. However, the borrowings thereunder cannot be used for any speculation, trading, business, or commercial purposes.

The mortgage debt under Reverse Mortgage shall interalia include the loan amount, application fees, processing fees, interest (compounded), penal interest (if any) and prepayment interest, etc.

The “Reverse Mortgage debt’ becomes forthwith due and payable in full on the occurrence of any of the following events, namely: –

• Upon the borrower (and/or his/her spouse) or the last of the surviving borrower if there is more than one borrower passing away or sells the house.
• Upon the borrower permanently moving out of the house.
• Upon the borrower failing to pay property taxes, maintenance charges, and insurance of the house.
• Upon the last surviving borrower failing to live in the house for 12 consecutive months without sufficient cause or justification.
• Upon the Borrower allowing the property to be deteriorated beyond what is considered as reasonable wear and tear and fails to restore the deterioration.
• Upon the Borrower or any of them (if there are more than one) is declared Bankrupt/Insolvent.
• On account of perpetration of fraud or misrepresentation by the Borrower relating to the mortgage transaction.
• The Government condemning the said residential property (for health or safety reasons).
• The Government under statutory provisions acquires the said residential property.
• Upon the Borrower committing any breach of the terms and conditions of the loan agreement and other incidental writings.

The Reverse Mortgage debt is satisfied out of the sale proceeds of the said residential property and if found insufficient, also from the estate of the Borrower. Surplus amount, if any, will be remitted back to the Borrower or his legal heirs. The legal heirs have the preferential right to redeem the Reverse Mortgage by making payment of mortgage debt and they will be given preference for doing so.

The Borrower also has to consider the “adverse effects” of the present scheme of reverse mortgage highlighted below: –

(a)      The maximum tenure of payments can be of 10 to 20 years. Beyond the said period, the Borrower can stay in the residential property but he will not be eligible for any further payments.

• The Financial Institution/Bank has the option to revise the lump sum amount/periodic payments at such frequency or intervals based on the revaluation of the property or at least once every 5 years.
• Since the reverse mortgage can be either at a fixed rate of interest or floating rates, it will be prone to attract interest rate movements. Hence, in the scenario in the case of floating rate of interest on Reverse Mortgage, it could add to the Borrower’s liability if the rate goes up.
• Under the Reverse Mortgage, the legal heirs of the borrower are not entitled to take control over the mortgaged residential property until the outstanding loan amount/mortgage debt is first cleared and before they would stake their claim to the property.

The Bank/Financial Institution at its discretion may levy a penalty or other charges on prepayment of the loan. If the Borrower or his heirs wish to prepay the loan amount, they may have to bear this additional cost.

Conclusion

In India, the concept of reverse mortgage has been progressing slowly as houses are seen as family assets for inheritance. Major public-sector banks offer reverse mortgages at competitive rates.  Borrowers who wish to opt for the scheme of “Reverse Mortgage” must acquaint themselves with the prevailing guidelines and terms and conditions of loan/periodical payments and carefully consider its pros and cons.

TRADEMARKS, VIDEO GAMES & FREEDOM OF SPEECH

by LFIAdmin | Sep 9, 2021 | Home

By Rishit Vimadalal, Advocate

rishit@vimadalal.in | Sep 09, 2021

The purchase of any videogame comes with an implicit promise to transport you from your home to the virtual reality within your television screen. Developers are constantly looking to incorporate maximum authenticity and reality into their products; this involves the replication of real names, designs, structures, trademarks, and many other key components from the real world into the virtual one.

Videogame developers have been increasingly using these trademarks in their games both with and without express licensing from the trademark right holders. The development of e-sports and online gaming have also led to an unauthorised development and expansion of games ordinarily sold in the market. In India, there is no statutory categorisation of videogames, and the sparse case laws have done little to settle this uncertainty. However, such trademark usage in virtual worlds has led to several high-profile infringement battles in the United States, and other developed intellectual property jurisdictions.

Position in the United States

In 2011, in Brown v. Entertainment Merchants Association, the United States Supreme Court observed that video games were expressive works, like films and books, and could be given protection as free speech under the First Amendment to the U.S. Constitution.[1] Hence, the 1989 Rogers v. Grimaldi test was extended by several Courts to balance the free speech and trademark protection afforded to videogames. The Rogers test aims to establish whether the used trademark is artistically relevant to the defendant’s work, and whether it is intentionally misleading.[2] The free speech and fair use protection extended to trademarks have been mentioned in Section 1125 of The Lanham Act (Trademark Act of 1946).[3]

In E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc., the dispute revolved around alleged trademark infringements in the popular videogame Grand Theft Auto: San Andreas. The defendants had incorporated a popular adult entertainment club Play Pen into their game, naming it as Pig Pen, and adopting its architectural features and trade dress. The district court and subsequently the Ninth Circuit Court, upheld the free speech protection of the defendants after applying the Rogers test. It felt that this usage was artistically relevant in recreating areas of Los Angeles in the game, and that nothing indicated the connection of the plaintiff with the game to intentionally mislead users.[4]

In the recent case of AM General LLC v. Activision Blizzard, Inc before the District Court of Southern New York, a dispute arose regarding the usage of the High Mobility Multipurpose Wheeled Vehicle (colloquially known as the Humvee) in Call of Duty games.[5] The Court used the Rogers test to hold that the usage of realistic military vehicles in videogames to simulate a warlike environment fulfilled the artistic relevance criteria of the test. It also stated that since the defendants did not dispute the plaintiff’s Humvee mark, and the lack of significant confusion amongst users regarding the mark did not amount to deliberate misleading. It felt that in the tussle between likelihood of confusion and First Amendment free speech rights, the latter would outweigh the former in the present circumstances; there seemed to be no trademarked use of the mark and no association with the origin of the symbol with the plaintiff.

Position in India

Section 30 of The Trade Marks Act, 1999 provides certain exceptions where nominative and descriptive fair use could be implicitly applicable to such scenarios. Section 30 (2)(a) provides for descriptive fair use, where the originally registered trademark could be used as a description to describe the defendant’s own goods or services. Section 30 (2)(d) discusses nominative fair use where the mark of the registered owner is used to refer to the owner’s products themselves.

Indian High Courts[6] have considered nominative fair use in certain trademark infringement matters, and have considered factors such as nature of use, intention of creating an association, consumer confusion, and the mode of use in deciding their ruling.[7] In India, the lack of a particular classification of video games signifies the relatively underdeveloped nature of law related to gaming in India.[8] In Tata Sons v. Greenpeace International, the Delhi High Court was faced with a scenario where the defendants were using their registered Tata trademark in a game. The game consisted of turtles escaping the Tata logo in the style of the popular video game Pacman. In balancing the commitments of the law under Freedom of Speech and Expression, the Court considered that the commercial or communicative intent of the speech would be considered and the fact that this game was in the nature of a parody. In this case, the trademark was used as a method of criticising Tata and hence this would not constitute infringement.[9]

Need for Evolution

In 2017, the release of Player Unknown’s Battlegrounds (PUBG) on multiple platforms created waves in the Battle Royale genre. This game, due to factors like device compatibility and multitude of platforms, has greatly penetrated the India games market. It was observed that this game, in its virtual environment, had made use of Mahindra 265 DI tractors along with the trademark in order to depict a semi-urban setting. Mahindra Tractors did not object to this usage, but in different circumstances, a legal battle could have been a possible outcome.

It is essential that Indian law evolves with technology to avoid such legal uncertainty. In the United States, the Rogers test has been widely used in adjudicating the usage of trademarks within video games but is still not binding on all Circuit Courts because of no authoritative Supreme Court pronouncement. This uncertainty should also serve as a caution to developers to take the necessary legal precautions before constructing their virtual environments. A timely expansion of Indian law on this subject, on the cues of more developed IP jurisdictions, would ensure a more consistent balancing of IP rights along with constitutional guarantees.

[1] 131 S. Ct. 2729.

[2] 875 F.2d 994 (2d Cir. 1989).

[3] 15 U.S.C. § 1125.

[4] 547 F.3d 1095 (9th Cir. 2008)

[5] S.D.N.Y., No. 17-8644.

[6] Hawkins Cookers Ltd. v. Murugan Enterprises, (2012) 189 DLT 545.

[7] Consim Info Private Limited v. Google India Private Limited, [2013 (54) PTC 578 (Mad)].

[8] Ramos, Andy, Anxo Rodríguez, Stan Abrams, and Tim Meng. “The Legal Status of Video Games: Comparative Analysis in National Approaches.” World Intellectual Property Organisation, July 29, 2013. https://www.wipo.int/publications/en/details.jsp?id=4130&plang.

[9] 178 (2011) DLT 705.