by LFIAdmin | Apr 29, 2021 | Uncategorized
By Heena Thalesar, Advocate
heenathalesar2233@gmail.com | April 28, 2021
BACKGROUND OF THE CASE:-
Recently, in a judgement delivered by the Hon’ble Bombay High Court in Prateek Chandragupt Goyal vs. State of Maharashtra and others (Criminal Writ Petition No. 62 of 2021), it has quashed an FIR registered by Pune City Police against one Journalist Mr. Prateek Chandragupt Goyal for using logo of “Sakal Media Group” in two articles which were published on 27 March 2020 and 11 June 2020 respectively on an online news portal “news laundry”. The case was registered at Vishrambag Police Station at Pune for an offence under Section 103 of Trademarks Act, 1999.
FACTS OF THE CASE: –
In the present case, the Petitioner sought quashing of FIR and further contended that the ingredients of the said offence are not made out in the facts and circumstances of the present case and that, therefore, the FIR deserves to be quashed. The Petitioner is a Journalist working with online news portal ‘News laundry’. It is stated that he had earlier worked with other Media entities, including ‘Sakal Times’. According to the Petitioner, he specializes in investigative journalism and that he has been working in this field since the year 2012. The FIR has been registered against the Petitioner at the behest of Respondent No.2 (original informant), who is the Chief Administrative Officer of Sakal Group, that publishes newspapers in Marathi language called ‘Sakal’ and in English language called ‘Sakal Times’. The Respondent No. 2 approached the Police for registration of FIR on 16th September, 2020 claiming that the Petitioner committed the above offence by falsely applying trade mark of Sakal Group in two articles authored by him and published in the aforesaid news portal called ‘News laundry’. The two articles were published on 27th March, 2020 and 11th June, 2020.He further contended that in the said articles, the registered trade mark of the Sakal Media Group and Sakal Times was shown with prominence at the top. In the article published on 27th March, 2020, the heading was ‘The future is bleak: Sakal Times staffers say they have been sacked in violation of Maharashtra Order’. In the article published on 11th June, 2020, the heading was ‘They wanted to get rid of us: over 50 people laid off as Sakal Times closes down’. According to Respondent No.2 these were highly defamatory articles against Sakal Media Group and that use of the official logos / trade mark of the Sakal Media Group and Sakal Times on these articles clearly amounted to falsely applying the said trade mark, thereby resulting in commission of an offence under Section 103 of the Trademark Act, 1999. In the FIR, it was stated that the offence was committed from 27th March, 2020to 11th June, 2020and, as noted above, the FIR, stood registered after three months on 16th September, 2020. It is significant that prior to lodging the complaint, leading to registration of FIR, a legal notice dated 12th June, 2020, was sent to the Petitioner alleging that the Sakal Media Group was defamed by him and an amount of Rs.65,00,000/- was claimed from him. 19th June, 2020, the Petitioner sent a reply to the said legal notice. On 03rd September, 2020, the Sakal Media Group filed a suit for injunction against the News laundry Media Pvt. Ltd. seeking an injunction against the said defendant and the Petitioner for removing the said articles from the news portal. The present writ petition was filed in October 2020, wherein notice was issued and it was directed that while the investigation shall continue, the charge sheet could be filed only with the leave of this Court. Thereafter, on 27th January, 2021, this Court recorded statement made on behalf of the Petitioner that he would appear before the Investigating Officer on a specific date and it was directed that the Investigating Officer shall not insist for production of laptop and hard disk by the Petitioner.
CONTENTION OF THE PETITIONER: –
The trade mark of Sakal Media Group was shown in the articles written by the Petitioner and published on the news portal ‘News laundry’, only to indicate that those specific articles pertained to the Sakal Media Group. In these circumstances, there was no question of the said trade mark being falsely applied to any goods or services, so as to attract the ingredients of the aforesaid offence. Additionally, and without prejudice to the aforesaid submissions, the learned Senior Counsel for the Petitioner submitted that the action of the Petitioner was protected as a nominative fair use of the trade mark of Sakal Media Group under Section 30(1)(a) and (b) of the Trademarks Act, 1999.
CONTENTION OF THE RESPONDENTS: –
Learned Counsel appearing for Respondent No.2 submitted that admitted facts in the present case demonstrated that ingredients of the offence under Section 103 of the aforesaid Act were prima facie made out and there was no question of quashing of FIR. By referring to Section 103 of the aforesaid Act, the learned Counsel appearing for Respondent No.2 submitted that in the present case, the Petitioner had clearly falsely applied the registered trade mark of Sakal Media Group by prominently showing the mark on articles published on the news portal ‘News laundry’. It was submitted that when the word ‘Sakal’ was clicked on online search, it led to the said articles authored by the Petitioner and published on the news portal ‘News laundry’, thereby demonstrating that the offence under Section 103 of the said Act was indeed committed in the present case. The learned Counsel emphasized upon Section 102(2)(b) of the said Act in support of the said contention and submitted that since Sakal Media Group and the news portal ‘News laundry’ were in the same segment of providing news services, the offence was clearly committed in the facts and circumstances of the present case. The learned Counsel for the Respondent No.2 relied upon judgment of the Madras High Court in the case of Consim Info Pvt. Ltd. Vs. Google India Pvt. Ltd. and Ors. 2010(6) CTC 813 and judgment of Delhi High Court in Hawakins Cookers Ltd. Vs. Murugan Enterprises 2012 SCC OnLine Del 2118. It was further submitted that merely because Respondent No.2 had filed a Civil suit for injunction against News laundry Media Private Limited, it could not result in the criminal proceedings being terminated at this stage.
JUDGEMENT:-
The Hon’ble High Court held that “Mere use of the registered trade mark of the Sakal Media Group in articles authored by the Petitioner and published by the news portal ‘News laundry’, do not fit into the definition of false application of the trade mark in relation to goods or services.” It is an admitted position that the articles were published in the online news portal ‘News laundry’ and there was no suggestion that the said news portal itself was that of ‘Sakal’. Merely because an online search for the word ‘Sakal’ led to the aforesaid articles of the Petitioner published in the news portal ‘News laundry’, does not mean that the registered trademark of Sakal Media Group was falsely applied to goods or services by the Petitioner. At worst, it could be said that such an online search leading to the aforesaid articles might be the subject matter of an injunction suit at the behest of Sakal Media Group due to the contents of the said articles, but, that falls within the realm of a civil dispute that could be raised by Pisal. In fact, Pisal did issue a Notice on behalf of the Sakal Media Group (claiming Rs 65 lakh for defamation) and chose to file a suit for injunction before the competent Civil Court, which is pending.
CONCLUSION:-
For use of registered trademark of the Sakal media group in the article authored by Prateek Gupta Goyal and published by the news portal news laundry do not fit into the definition of false application of the trademark in relation to goods and services.
by LFIAdmin | Apr 25, 2021 | Uncategorized
By DHRUTI M KAPADIA-ADVOCATE, SOLICITOR, ADVOCATE-ON-RECORD, SUPREME COURT OF INDIA & MEDIATOR
kapadiadhruti@gmail.com| April 24, 2021
“A WORD OF APOLOGY CAN HELP RESOLVE DISPUTES –IT IS WORTH THE TRY THAN HOLDING UPON EGOS TO CONTINUE THE DISPUTES-LEARN TO APOLOGISE IF YOU REALLY DESIRE TO RESOLVE THE DISPUTE”
Introduction:
When the mind tricks up and makes one realize that they have done a mistake than one must have the guts to admit it to the person wronged which can psychologically help relieve the pressing guilt that built over time.
The prime step in mending a relationship which is broken is by attempting to move towards a sorry-apology as it will help move forward in re-building the trust broken and will be step climbing up to sooth the communication relationship between each other.
The ease one gets by hearing another person say sorry is pretty comforting in the mind and it leads to step forward for opening dialogues , clearing out bitterness towards each other and also will help playing on stuffed emotions between the each other.
Why people Apologize?
Apology is also a healing tool and brings in good gestures between the parties. It says that you share values regarding appropriate behavior towards each other, that you have regrets when you don’t behave according to those values (intentionally or unintentionally), and that you will make greater efforts to live up to your shared standards of behavior. Timing can be crucial. An apology delayed may be an opportunity lost.
Generally it is human nature that when they are hurt or humiliated they often hope for an apology. They may hope that an apology from the person who caused them harm will restore dignity, trust, and a sense of justice. Whether you are requesting an apology or considering giving one, it is important to realize that a thoughtful apology can mend a relationship while a thoughtless one may cause further conflict.
Finally, the good apology is a gift to the relationship. Two people can feel secure in the knowledge that if they behave badly, even fight terribly, they can repair the disconnection. We strengthen our relationships when others know that we’re capable of reflecting on our behavior, that we’ll listen to their feelings, and that we’ll do our best to set things right.
Example of how to put forth Apology:
You could say: “I’m sorry that I used derogatory language at you yesterday at dinner party. I feel embarrassed and ashamed by the way I acted.”
To resolve the issue by apology, your words need to be sincere and authentic. Be genuine and honest with yourself, and with the other person, about why you want to apologize and then only you can expect the other person to let go or forgive.
In mediation the most compelling apology would consist of 6 main elements:
Expression of regret
Explanation of what went wrong
Acknowledgment of responsibility
Declaration of repentance
Offer of repair
Request for forgiveness
Why People don’t apologize?
Main reason why people don’t apologize is because they are afraid the apology will be seen as a sign of weakness and/or guilt. But in reality, an apology indicates great strength as it is a munificent act that restores and rehabilitates the self concept of the offended party.
Therefore in mediation apology mediator and parties must make an attempt to move forward the sessions with apology it may be as simple as resolving a dispute at home by saying a sorry and conflict between the parties may end.
Apology Advice to Clients:
One road leads toward anger, fear, hate confrontation, bitterness, and revenge, and pushes forward towards disputes and heavy litigation.
A second leads moves towards empathy, acceptance, honesty, collaboration, and mutual respect; it draws the ropeway into negotiations to resolve the disputes.
Yet there is a still deeper third road that is largely hidden from many of the clients who come for advice , this is a very sensitive area which needs efforts to move into insight, discovery, wisdom, affection, and heartfelt communications; which enables them to mirror reflect their present. This method encourages the client to apologize; reach forgiveness; seek release, renewal, and reconciliation. It allows us to sustain openhearted relationships. It wakes them up, makes them more mindful of their own reflection and others. It nurtures them towards the session of mediation where they get prepared to apologize. This is the path of transformation and transcendence, of wisdom and heart. As their legal advisor it is essential we advice our clients that revenge is complex whereas apology, forgiveness, and reconciliation are simple, yet powerful transformative tools, and doorways to inner and outer peace in mediation.
This advice and efforts should be continuous while setting up mediation session or during the sessions at times it may be nearly unnoticeable but this advisory tool on apology to be powerful can integrated into every kind of mediation practice. They can help free clients from the past and allow them to reach closure, to let go of whatever has kept them trapped in conflict, and move in healthier, more positive directions, towards deeper levels of resolution and relationships with the other side.
Conclusion:
Tool of apology can be used by mediator to make parties feel comfortable to apologize or even by attorneys to advice the parties in mediation wherein resolving complex multi-party conflicts which include: matrimonial disputes, community, grievance and workplace disputes, collective bargaining, negotiations, organizational and school conflicts, sexual harassment , commercial disputes and public policy disputes.
by LFIAdmin | Apr 23, 2021 | Uncategorized
By Esha Malik, Advocate
eshamalik322@gmail.com | April, 23 2021
In view of the second wave of COVID-19 Pandemic in India and its impact, the Government of India has under its Atmanirbhar Bharat Initiative decided to extend its Emergency Credit Line Guarantee Scheme (ECLGS) 1.0 and 2.0 by introducing ECLGS 3.0 for a period of three months i.e. 30th June, 2021 with more advanced and business uplifting changes proposed in the revised scheme.
ECLGS 3.0 is an amended government scheme designed to provide additional support to various stressed service sectors amid the unprecedented Second Wave of COVID-19 and the subsequent lockdown once again to help sustain employment, meet liabilities and reduce the pressure to meet working capital requirements, in turn reviving the Indian economy.
Earlier, the ECLGS Scheme was available to MSME’s only which later was amended through ECLGS 2.0 including 26 stresses sectors. The new ECLGS 3.0 will cover within its fold additional business enterprises in the Hospitality, Travel and Tourism, Leisure and Sporting sectors as identified by the K. V. Kamath Committee having as on 29-02-2020, a total credit outstanding not exceeding Rs. 500 Crores and overdue, if any being less than 60 days from the date i.e. 29-02-2020. However, loans provided in individual capacity will not be covered under this Scheme. Further, borrower accounts declared as NPA or SMA-2 status as on 29-02-2020 shall not be eligible for availing benefit under the Scheme.
ECLGS was first valid until October, 2020 and later extended from time to time last being March, 2021 and now by introducing the ECLGS 3.0 until 30th June, 2021.
Key Highlights of ECLGS 3.0:-
(i) Addition of Additional Credit i.e. 40% outstanding across all lending institutions as on 29-02-2020 as against earlier 20% outstanding overdue;
(ii) Entities to be upto 60 days past overdue as against 30 days under ECLGS 2.0;
(iii) The tenor for such a 100% collateral free loan has been extended upto 6 years with moratorium period of 2 years as against 5 years with Moratorium period of 1 year on principal re-payment;
(iv) Validity of ECLGS 1.0, 2.0 are extended till 30-06-2021 or until Guarantees of Rs. 3 Lakh Crore are issued;
(v) Introduction of Incentives to Member Lending Institutions (MIL’s) like Banks, NBFC’s and other lending institutions to enable availability of funding facility to the eligible beneficiaries providing 100% guarantee by National Credit Guarantee Trustee Company (NCGTC) to such Member Lending Institutions (MLIs).
To conclude, this forward-looking vision and progressive amendment by Government of India is very well appreciated and looked upon by all the eligible stressed sectors hit by the second wave of the Pandemic for a major relief amid the second lockdown and shall also pose a great support to not only businesses but also shall go a long way “in contributing to economic revival, protecting jobs, and creating conducive environment for employment generation” where people are looking for more meaningful roles to play.
by LFIAdmin | Apr 19, 2021 | Uncategorized
By Manish Doshi, Advocate
manish@vimadalal.in | April, 19 2021
In a recent judgement delivered by the Hon’ble Supreme Court of India, in Asset Reconstruction Company (India) Limited v. Bishal Jaiswal & Anr, important questions arose for the consideration of the Court:-
A. Whether Section 18 of the Limitation Act, 1963 [“the Limitation Act”], which extends the period of limitation depending upon an acknowledgement of debt made in writing and signed by the corporate debtor, is also applicable under Section 238A of the Insolvency and Bankruptcy Code, 2016 [“the IBC”] given the expression “as far as may be” governing the applicability of the Limitation Act to the IBC?
B. Whether an entry made in a balance sheet of a corporate debtor would amount to an acknowledgement of liability under Section 18 of the Limitation Act?
C. To examine the position under the Companies Act, 2013 [“Companies Act”] qua any compulsion of law for filing of balance sheets and acknowledgements made therein;
D. To examine the legality of the National Company Law Appellate Tribunal (NCLAT) judgment in V. Padmakumar v. Stressed Assets Stabilisation Fund, where it was held that that entries in balance sheets would not amount to acknowledgement of debt for the purposes of extending limitation under Section 18 of the Limitation Act.
The undisputed and controverted facts are that in 2009, the Corporate Debtor setup a thermal power project in Jharkhand and for doing so availed loans from various lenders. The account of the corporate debtor was declared as a non-performing asset by one of the lender on 31-7-2013 and issued a loan recall notice on 27-3-2015. On 31-3-2015, some of the original lenders assigned the debts owed to them by the Corporate Debtor to the Appellant Asset Reconstruction Company (India) Limited (ARCIL). ARCIL issued a notice under Section 13(2) of the SARFAESI Act and took actual physical possession on 1-6-2016. ARCIL filed an application under section 7 of IBC before the National Company Law Tribunal, Calcutta (NCLT) for default in payments and as the relevant form indicating the date of default did not indicate any such date, ARCIL filed a supplementary affidavit specifically mentioning the date of default and annexing copies of balance sheets of the corporate debtor, which, according to ARCIL acknowledged periodically the debt that was due. On 19-2-2020, a Section 7 application was admitted by the NCLT by observing that the balance sheets of the corporate debtor wherein it acknowledged its liability were signed before the expiry of prescribed period of three years from the date of default and entries in such balance sheets being acknowledgments of the debt due for the purposes of section 18 of the Limitation Act and Section 7 application is not barred by limitation. The Corporate Debtor, in appeal filed before the NCLAT, relied upon the judgment V. Padmakumar of the NCLAT where , it had been held that entries in balance sheets would not amount to acknowledgement of debt for the purpose of extending limitation under Section 18 of the Limitation Act. However, on 25-9-2020 another bench of the NCLAT doubted the correctness of the Full Bench judgment and suggested the constitution of another Bench to reconsider the judgment in V. Padmakumar (supra). However, the Five-Member Bench of the NCLAT, vide impugned Judgment dated 22-12-2020, refused to adjudicate the question stating that the reference to the Bench was itself incompetent; subsequently, the matter reached the Supreme Court by way of appeal. The first question before the Supreme Court was, whether Section 18 of the Limitation Act, which extends the period of limitation depending upon an acknowledgement of debt made in writing and signed by the corporate debtor, was also applicable under Section 238A given the expression “as far as may be” governing the applicability of the Limitation Act to the IBC.
While dealing with aforesaid questions, the Supreme Court adverted to the rationale for the enactment of 238A of the IBC [1], which reads as under:
238A. Limitation.—The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be.
The Supreme Court has also considered various judgments [2] wherein the Report of the Insolvency Law Committee of March, 2018 observing that though the IBC is not a debt recovery law, the trigger being “default in payment of debt” would render the exclusion of the law of limitation as “Counter-intuitive” and have come to conclusion that the question of sections 14 and 18 of the Limitation are applied in the IBC and is no longer res integra.
The Supreme Court has also considered second question “whether an entry made in a balance sheet of a corporate debtor would amount to an acknowledgement of liability under Section 18 of the Limitation Act”.
While considering the aforesaid question, it is recorded by the Supreme Court that several judgments of the Supreme Court have indicated that an entry made in the books of accounts, including the balance sheet, can amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act.
The Supreme Court has also examined the position under the Companies Act qua any compulsion of law for filing of balance sheets and acknowledgements made therein.
While considering the aforesaid questions, the Supreme Court reproduced certain sections [4] of the Companies Act and concluded that there is no doubt that the filing of a balance sheet in accordance with the provisions of the Companies Act is mandatory and any transgression of the same being punishable by law. It is also recorded that notes that re annexed to or forming part of such financial statements are expressly recognised by section 134(7) of the companies act and equally, the auditor’s report may also enter caveats with regard to acknowledgements made in the books of accounts including the balance sheet. The said statement of law contained in Bengal Silk Mill [3]. The Hon’ble Court has also considered various judgments [5] passed by various courts on the aforesaid proposition and concluded that decision of full bench in V. Padmakumar (supra) is contrary to the aforesaid catena of judgments and holds that entries in balance sheets would amount to acknowledgement of debt for the purposes of extending limitation under section 18 of the Limitation Act.
[1] Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries (P) Ltd., (2020) 15 SCC 1
[2] Mahabir Cold Storage v. CIT, 1991 Supp (1) SCC 402; A.V. Murthy v. B.S. Nagabasavanna, (2002) 2 SCC 642
[3] Bengal Silk Mills Co. v. Ismail Golam Hossain Ariff, 1961 SCC OnLine Cal 128 : AIR 1962 Cal 115;
[4] Section 2(40) “financial statement”; Section 92-Annual return; Section 128-Books of account etc., to be kept by company; Section 129-Financial Statement; Section 134-Financial Statement, Board’s report etc; Section 137-Copy of financial statement to the filed with Registrar;
[5] South Asia Industries (P) Ltd. v. General Krishna Shamsher Jung Bahadur Rana, 1972 SCC OnLine Del 185; Pandam Tea Co. Ltd., 1973 SCC OnLine Cal 93; Hegde & Golay Limited v. State Bank of India, 1985 SCC OnLine Kar 428; Bhajan Singh Samra v. M/s. Wimpy International Ltd., 2011 SCC OnLine Del 4888; CIT-III v. Shri Vardhman Overseas Ltd., 2011 SCC OnLine Del 5599; Shahi Exports Pvt. Ltd. v. CMD Buildtech Pvt. Ltd., 2013 SCC OnLine Del 2535; N.S. Atwal v. Jindal Steel and Power Ltd., 2013 SCC OnLine Del 3902; M/s. Al-Ameen Limited v. K.P. Sethumadhavan, 2017 SCC 50 OnLine Ker 11337; Zest Systems Pvt. Ltd. v. Center for Vocational and Entrepreneurship Studies, 2018 SCC OnLine Del 12116; Agni Aviation Consultants v. State of Telangana, 2020 SCC OnLine TS 1462;
by LFIAdmin | Apr 17, 2021 | Uncategorized
By Esha Malik, Advocate
eshamalik322@gmail.com | April, 17 2021
In a recent judgement delivered by the Hon’ble High Court at Calcutta in Prabitra Kumar Maity v. Shyamali Manna and Others, an interesting, important and significant question arose for the consideration of the Hon’ble Court “whether a gift of immovable property made to a stranger to the exclusion of the other heirs of Class I of the Schedule can be regarded as a Transfer under Section 22 of the Hindu Succession Act, 1956? (“the said Act”).
The aforesaid judgement emphasizes the preferential right under Section 22 of the said Act to acquire property in certain cases where an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others, devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred.
The undisputed and controverted facts are that the Plaintiff/Appellant filed composite suit for declaration, permanent injunction and preferential rights to acquire the property which was gifted by Defendant No. 2 in favour of Defendant No. 1 without any consideration and out of sheer love and affection.
While dealing with this point, the Hon’ble Court made it aptly clear that for a Gift to be valid, there must exist essential characteristics namely: (i) made voluntarily; and (ii) without consideration. On the other hand, section 22 of the said Act provides for a preferential right to acquire immovable property in certain cases and such preferential right is confined to the heirs specified in Class I of the Schedule of the said Act. Further, section 22 of the said Act is unambiguous and the interpretation adopted by the Hon’ble Court is to uplift the legislative intent recognizing a right of pre-emption in favour of all heirs of Class I and more particularly providing that if a person dies intestate and his interest devolves upon his heirs specified in Class I of the Schedule and if anyone of the heirs proposes to transfer his interest in the property, the other heirs within the said class have a preferential right to acquire such interest, which immediately gets activated the moment one of the heir specified in Class I of the Schedule proposes to transfer his undivided interest in immovable property or a business carried on by the predecessor to other person other than the heirs specified in Class I of the Schedule. The Hon’ble Court also conjunctively considered the expression “proposes to transfer” materially emphasizing that a concluded transfer cannot take away such a preferential right of pre-emption as created in favour of the other heirs of Class I and can be certainly impugned even after its finality unless the same is in compliance of section 22 of the said Act. Similarly, the Hon’ble Court also projected that a duty is cast upon the proposed transferor not to embark upon its journey for transferring his undivided share in the property to an outsider without first offering his share to the other co-sharer, inter alia in violation of section 22 of the said Act.
While deciding the above, the Hon’ble Court also considered the expression “Transfer” of the Transfer of Property Act, 1872?.
The word “Transfer”, being of a wider import includes sale, exchange, mortgage, gift and lease, being the usual modes of transfer under the Transfer of Property Act as also by way of trust. The main object being to prevent the heirs other than transferor from being compelled to be in joint possession/enjoyment of property or business with a stranger or other person whom they do not wish to associate themselves. Therefore, it would be proper to include “Gift” being made voluntarily and without consideration and gifted out of love and affection to a stranger as a “transfer”. With regards to concluded transfer, if the transfer has been affected without knowledge of the other co-heir, there is no restriction under section 22 of the said Act and the heir can impugn such concluded transfer by invoking the preferential right enshrined under section 22 of the said Act.
In the given case, the co-heir has in gross violation of section 22 of the said Act gifted the said property to a stranger without exercising right of pre-emption/preferential right of the other co-sharer coming in Class I of the Schedule of the said Act and therefore such a Gift being a transfer comes within the ambit of section 22 of the said Act and therefore, the heir of Class I of the Schedule of the said Act is entitled to a preferential right.
by LFIAdmin | Apr 13, 2021 | Uncategorized
By Isha Thakur, Law Student, SNDT Law School
ishav1998@gmail.com | April, 13 2021
The ease of forming and operating a partnership has been instrumental in improving the ease of conducting business in India. With minimum intervention from regulatory authorities, non-obligatory registration process and wide decision-making power, the concept of partnership has gained momentum and popularity among medium scale firms where the probability of risk is much higher.
A Limited Liability Partnership (“LLP”) may appear to be similar to a Partnership but the provisions of the Limited Liability Partnership Act, 2008 (“the 2008 Act”), which govern the establishment of LLPs in India, recognize such LLPs as legal entities, as contrary to Partnerships. As soon as such entites are given a legal character, they attain perpetual succession and the capacity to sue and be sued, thereby, establishing an existence entirely separate from its partners. These entities have a common seal, limited liability and can buy, possess and sell properties (moveable or immovable) in its own name. Therefore, in light of the given legally recognized characteristics, a question arises herein – Can an LLP become a partner in a partnership firm?
The said issue arose before the Kerala High Court in Jayamma Xavier vs. Registrar of Firms (2020) wherein the Registrar of Firms declined the registration of a partnership firm constituted by Sleeplock LLP and one other individual on the ground that an LLP cannot be a partner of a firm. The Respondent, being the Registrar of Firms, highlighted the inconsistencies between the provisions of the Limited Liability Partnership Act, 2008 and the Indian Partnership Act, 1932 by further contending that the 1932 Act makes the partners of a partnership firm jointly and severally liable for the acts of the firm whereas on the contrary in an LLP, the liability of the partner is restricted only to the extent provided in the LLP agreement.
For this purpose, it is material to look into the definition of Partnership under Section 4 of the Indian Partnership Act, 1932 which lays down:
“Partnership is the relation between persons who have agreed to share the profit of a business carried on by all or any of them acting for all.”
The Kerala High Court, while scrutinizing the above definition, focused on interpreting the term “persons” to deal with the said question. Since, the term “persons” is not defined under the 1932 Act or the 2008 Act, the definition given in the General Clauses Act, 1897 was referred to be as:
“(3)(42) “person” shall include any company or association or body of individuals, whether incorporated or not”
A partnership can be entered into between two persons where such persons can be an incorporated body of individuals. The Court also relied on its decision laid down in M. M. Pulimood vs. Registrar of Firm wherein the Court found that a Private Limited Company incorporated under the Companies Act, being a corporate body, comes under the definition of “persons” and could execute a partnership deed and as per Section 3 of the 2008 Act, a limited liability partnership is deemed to be a body corporate.
Rebutting the contentions of the Respondent, the Petitioner stated that the liability of partners of LLP and liability of the LLP as a partner under the Partnership Act, 1932 would be different. The question of liability of the partners of the LLP would not arise when the LLP itself is a partner in the partnership firm as a body corporate which would be analogous to that of a company joining a partnership firm.
The Court disposed of the present writ petition and set aside the order of the Registrar of the Firms (the Respondent herein) on the principle that Section 4 of the 1932 Act permits constitution of a firm or partnership between one or more persons. The partnership deed, in the present case, was executed between an individual and an LLP which is a body corporate having a legal entity and coming within the definition of “person”. The Court further clarified that the difference in the provisions under the 1932 Act relating to liability of the firm or the individual partners would not affect the formation of partnership with an LLP. Hence, an LLP cannot be disqualified from entering into a partnership with an individual or any other persons.
by LFIAdmin | Mar 27, 2021 | Uncategorized
By Heena Thalesar, Advocate
heenathalesar2233@gmail.com | March 27, 2021
WHAT IS INFRINGEMENT?
Infringement refers to the unauthorized use of material that is protected under intellectual property laws. This usually refers to instances of copyright infringement, such as when artistic works, music or literary works are used without the creator’s permission. However, infringement can also lead to a legal dispute. Proving infringement usually requires that there is a subsisting copyright, trademark or patent. It also requires proof that the defendant uses the material, artistic work or invention without notifying the person who has ownership rights in the material.
BACKGROUND:-
The Bombay High Court in ABA NO.336 of 2021 has held that offences of infringement of copyright under the Copyright Act, 1957 and of falsely applying any trademark under the Trademarks Act, 1999 are non-bailable offence as the punishment attracted is up to three years. The legal question was raised as to whether these offences were bailable or non-bailable. The first point which the High Court considered was whether offences under Ssection 63 of The Copyright Act,1957 (i.e. infringement of copyright) and Section 103 of Trademark Act,1999 (i.e. infringement of trademark) which are not there in the Indian Penal Code,1860 but attract up to three years imprisonment. The Court held both the offenses to be “non-bailable”.
FACTS OF THE CASE:-
In Piyush Subhashbhai Ranipa vs. The State of Maharashtra (ABA NO.336 of 2021), the Applicant was seeking anticipatory bail in connection with C.R.No. 865 of 2020 registered with Mohol Police Station, Solapur, District Solapur, under sections 418, 465, 482, 483, 485, 486, 488 r/w. 34 of the Indian Penal Code (for short ‘IPC’) and under section 63 of the Copyright Act, 1957. Subsequently section 103 of the Trademarks Act, 1999 is also applied. The First Information Report (F.I.R.) was lodged by one Mr. Prakash Gore. He was a Zonal Manager of Jain Irrigation System. His company received complaints that substandard goods in the name of their company were sold in the market. The informant received secret information that one Eicher truck bearing No. GJ03/BV-9840 was carrying goods in the name of the complainant’s company which actually were not genuine goods. That vehicle had started from Gujarat and was going towards Karnataka. On 19/12/2020, at about 4:00p.m. the informant and his associates saw that vehicle. They made inquiries with the driver Jeevan about the goods. He informed that the goods were loaded from Tera-flow Company Ribda and he was going to Chadchan. He showed invoices. The invoice mentioned four different HDPE pipes worth Rs.94,485/-. The informant physically saw those goods. He saw that some goods were bearing mark ‘Jain HDPE’ bearing stamp of CML (Certificate of Manufacturing License) 7018761. That stamp was a forged stamp. The goods were being transported and sold using fake trademark and, therefore, he lodged this F.I.R. The investigation was carried out and the goods were seized. The first point for consideration was whether the offence under Section 63 of the Copyright Act, 1957 and also subsequently applied section 103 of the Trademarks Act, 1999 were bailable or non bailable. The Advocate for Applicant invited courts attention to the order passed by the learned Magistrate, wherein the co-accused were granted bail on the ground that, section 418 of I.P.C. was bailable and, therefore, bail was granted to the co-accused. Perusal of that order shows that the learned Magistrate has only referred to Section 418 of IPC and has not considered Section 63 of the Copyright Act and Section 103 of the Trademarks Act. Advocate for Applicant claimed parity with co-accused in this case. The allegations against the applicant are that he was manufacturing all these pipes and at his instance the pipes were being transported and sold. The investigation papers produced by Advocate for State before the court showed photographs of those pipes which bore the aforementioned name and registration number of the trademark of complainant’s company. Therefore, the first question which needed to be addressed and decided is to whether the offence punishable under Section 63 of the Copyright Act, 1957 and Section 103 of Trademarks Act, 1999 are bailable or non bailable.
JUDGEMENT:-
The High Court rejected the Anticipatory Bail in the present case after considering various judgments submitted by both the parties. It held that the question, whether the offence is bailable or not has to be seen in the light of definition of bailable offence provided under section 2(a) of the Cr.p.c. which reads thus:
“2. Definitions…… (a) “bailable offence” means an offence which is shown as bailable in the First Schedule, or which is made bailable by any other law for the time being in force; and “non bailable offence” means any other offence;” the next relevant sections would be sub section 2 of section 4 and section 5 of the CrPC. as they are referred to by the Division Bench of this court in the case of Mahesh Shivram Puthran (supra). Bare reading of Part II of the Schedule-I of CrPC. shows that, if the offences in the other laws are punishable with imprisonment for three years and upwards then the offences are cognizable and non bailable. Wherever it is possible to impose the punishment extending to three years, this category would apply, because in such offences it is possible to impose sentence of exact three years. In such cases offences would be non-bailable. First question raised before the court is answered that the offences under section 63 of the Copyright Act, 1957 and section 103 of Trademarks Act, 1999 are non bailable in nature and, therefore, since these sections are applied here, the application for anticipatory bail is maintainable. The Advocate for Applicant submitted that, sub section 4 of section 115 of the Trademarks Act, 1999 prohibits investigation by any other officer below the rank of Deputy Superintendent of Police. He also relied on the same provision and submitted that the police officer before making any search and seizure had to obtain opinion of the Registrar on the facts involved in the offence relating to Trademark and shall abide by the opinion so obtained. Justice Sarang Kotwal held that in the present case that whether there is infringement of Copyright Act attracting punishment under section 63 of the Act; is a matter of investigation, but certainly there appears to be infringement of the trademark registered in the name of the informant’s company. Therefore, commission of offence punishable under section 103 of the Trademarks Act is clearly made out. The accused have falsely applied the informant’s trademark to their own products and have attempted to sell those products. Thus, the act of the accused also amounts to offence under section 420 r/w. 511 of the IPC. By their act, the public was induced, or an attempt was made to induce the public to buy these products under the impression that they were manufactured by the informant’s company.
CONCLUSION:-
The punishment for the offence made under the Section 63 of the Copyright Act Act and Trademark Act, 1999 is imprisonment which cannot be less than 6 months, but which may extend to 3 years. The Code of Criminal Procedure, 1973 lays down that if the offence is punishable “by imprisonment for three years and upwards but not more than seven years”, the procedural law provides that the offence will be cognizable and non-bailable whereas if any offence is punishable with imprisonment of less than 6 months then it is a non-cognizable offence. Therefore, in such circumstances the offence committed under Section 63 of the Copyright Act, 1957 and Section 103 of the Trademarks Act, 1999 has to be held cognizable and non-bailable.
by LFIAdmin | Mar 20, 2021 | Uncategorized
By Isha Thakur, Law Student, SNDT Law School
Ishav1998@gmail.com | March 20, 2020
Austere regulations and surveillance of capital asset transactions for maintaining foreign exchange reserves is not an uncommon practice. In fact, countries around the globe have legislated rigid and stringent processes with a view to avoid drainage of such reserves and minimize foreign participation. The Supreme Court of India, while dealing with Section 31 of the Foreign Exchange Regulation Act, 1973 in the case of Asha John Divianathan v. Vikram Malhotra (2010), reiterated such legislative intent to reduce the drainage of foreign exchange by way of repatriation of income specifically through disposal of immovable properties held by foreigners – non-citizens.
Section 31 of the 1973 Act
Imposes a restriction on the transfer of immovable properties (in India) by way of sale, mortgage, lease, gift, settlement or otherwise to be executed by an individual of foreign nationality. The said provision, being in consonance with the objective of the Act, was specifically enacted to conserve the foreign exchange resources of the country at a time when the country was facing a shortage and with a view of achieving proper utilization thereof, the Reserve Bank of India was delegated the authority under the Act in the interest of economic development of the country.
Section 31 of the Act lays down that a non-citizen of India and a company not being incorporated under the Indian laws cannot hold, transfer, acquire or dispose of any immovable property situated in India except with the prior permission of the RBI. The said section provides an exception to the given rule if the property in question is transferred by way of lease for a period not exceeding 5 (five) years. Moreover, any person requiring the said permission shall have to make an application to the said authority and the RBI, on receipt of the application shall have the discretion to either grant or refuse the permission applied for, however, it shall give the applicant a reasonable opportunity for representation before refusing the application. The said Section, additionally, imposes a time limit of 90 (ninety) days on RBI to express its decision to the applicant and on failure to convey its decision within the said period, the application shall be deemed to be approved.
The Supreme Court priori declared that transfer or disposal of immovable properties situated in India by a non-citizen without the prior sanction or special permission of RBI is forbidden, unenforceable and void. Dismissing the inconsistent opinions of various High Courts, the Bench consisting of Justice A.M. Khanwilkar, Justice Indu Malhotra and Justice Ajay Rastogi accentuated the mandatory nature of the said provision rather than it being directory.
The issue in dispute arose in absence of an express provision specifying the reverberations for violating the said section due to which the implications of the said provision have been construed to mean only a regulatory measure and not one of prohibiting transfer. The deficiency being acknowledged by the Supreme Court, it highlighted the intent of the legislation for imposing the requirement under Section 31 of the Act which the contrary decisions of High Courts completely missed. The Hon’ble Court expressly stated that unless the required permission is not granted by the authority, the transfer cannot be effectuated and would attract a penalty under Section 50 of the Act.
The Supreme Court opined as aforesaid in view of Section 31 to be conjointly read with Sections 47, 50 and 63. Section 47 of the Act prohibits a person from entering a contract or agreement which would violate any of the provisions of the Act unless an approval is obtained from the RBI or the Central Government. Considering the said Section applies to every agreement constituted under the Act, Section 31 duly comes within the ambit of the same. Secondly, though no particular penalty is provided for contravening Section 31, Section 50 of the Act lays down a penal provision for imposing a liability against every individual who acts in contravention of any provision of the Act. Lastly, Section 63 empowers a Court trying a contravention under Section 56 and Section 51 of the 1973 Act, to confiscate any currency, security or any other money or property in respect of which the infringement has taken place. The expression “property” under Section 63 has been interpreted to include immovable property referred to in Section 31 of the 1973 Act.
In the light of the aforesaid decision of the Hon’ble Court, the practice and policy of mandatory sanction of Reserve Bank of India with regard to immovable properties situated in India to be obligatorily obtained by foreigners is substantiated and backed by penal provisions overseeing the breach of the same. While concluding, the Court remarked that the RBI has absolute authority under the act with respect to the permission granted by it. The Reserve Bank of India is empowered to grant as well as refuse the required permission, however, at the same time there is no possibility of providing an ex post facto approval.
by LFIAdmin | Mar 10, 2021 | Uncategorized
By Nehil Bhatnagar, Law Student, Hidayatullah National Law University.
nehil0907@gmail.com | March 10, 2021
The Law of Contract provides that in breach of contract both the parties are allowed compensation, restoration or at least return of their goods or services in breach of contract. Thus, law and, the courts from time to time have ensured that rights of parties remain unaffected even in the breach of contract.
Breach:
When a person wilfully abstains from performing his duty or imposes a self-made impossibility. Such acts are classified as breach of contract.
Anticipatory Breach:
When the promised act has not been performed but the performer makes it clear or shows his intention to not perform the contract. In such cases the other innocent party can wish to either continue with the contract or repudiate the contract. In either of cases only payment should be made against actual performance made.
In Aslhing v L.S. John [1] the parties become free from the contract once their repudition is accepted and from then on, they act like they would after completion of contract. Thus, after repudiation both the parties are given right to sue and claim compensation from each other for any loss they have suffered, still exists.
M.P. Mines Ltd v Rai Bahadur Shriram Durga Prasad (P) Ltd [2] held that when performance of contract involves both the contracts mutually and when one of the party defaults, therefore, depriving of the other party to perform their own part. Such defaulting party has held to be guilty of the breach of contract on their part. It has been held in MSK Projects (I) (JV) Ltd v State of Rajasthan [3] that, when two parts of a contract are exclusive of each other and when one part has been performed, the party cannot seek compensation for non-performance of second part.
Damages of Breach [S. 73 – S. 74]:
Apex Court has held in Sunrise Associates v Govt of NCT of Delhi [4] that only two remedies are available in contract. Either it can be some specific performance or some damages available against the same.
It has been held in ONGC Ltd v Saw Pipes Ltd [5], in order to claim damages in breach, it is mandatory on the claiming party to prove that such party has suffered some loss due to the breach. Then, according to the remoteness and quantum of damage some monetary relief can be provided in the form of compensation. Also, in Draupadi Devi v Union of India [6] it was held same that in order to have the right to seek compensation of damages, it must be first proved by plaintiff the measure of converting that loss and the total quantum of loss. Otherwise, the claim seeking damages will rejected on not being able to discharge this proof.
Right to claim damages are of loss of profit over actual loss:
When party does not complete its performance, the other party suffers loss not only on the profit but he also has to give some amount out of his own pocket to engage some other party to complete that performance. In such cases party often claims damage is not only the extra money he had to spend but also the loss of profit, he would have made had there been no such breach. Supreme Court held the above argument right in Dwarka Das v State of M.P. [7]. In Murlidhar Chiranjilal v Harishchandra Dwarkadas [8] court also said that any loss should be quantified using the market rate or price of the particular place or city where the goods were supposed to reach in the normal course of conduct.
Along with it, in famous case of Karsandas H. Thacker v Saran Engg Co Ltd [9]; when a middle man enters into contracts for buying from one party and them selling it to other party, suffers any loss due to late delivery by the first seller cannot classify as loss in profit. It should be unknown to the first party that the person was going to sell it to another party.
Although the court have taken cognizance in some cases like Union of India v Steel Stock Holders’ Syndicate [10] there can be tremendous delay in delivery of goods. Though there was no time limit but the non-delivery of goods blocked the party’s money blocked because of frozen delivery. Hence, he was able to recover the money along with interest upon the said amount.
No Forfeiture of earnest money: The court has once in Maula Bux v Union of India [11] and even in Union of India v Rampur Distillery & Chemical Co Ltd [12]. There could not be any forfeiture of money nor any compensation given because the plaintiff failed to show (in both those cases, government) that they had suffered any loss because of the non-performance.
Forfeiture of earnest money:
The Supreme Court in rare occurrence allowed for the forfeit of earnest money in when it found it reasonable to do so. The court in Shree Hanuman Cotton Mills v Tata Aircraft Ltd [13] allowed the party to forfeit the money which plaintiff had submitted as partial requirement with the defendant as partial requirement of contract, because it was specifically mentioned in the contract; the court upheld it. Although it has been held by the Supreme Court in K.P. Subbarama Sastri v K.S. Raghavan [14] that a party with more power cannot compel such weak party to comply with unfair and oppressive terms and conditions.
Section 74:
This provision has given the liberty to parties to enter into contracts along with previously deciding the amount of penalty which a party may receive as damages from the party breaching the contract. This has given the rights to both parties to liquidate damages beforehand and mitigate extra stress of litigation.
Section 75:
A person who rightfully rescinds a contract is entitled to compensation for any damage which he has sustained through the non-fulfilment of the contract [15].
Generally, it is seen that the party who rescinds from a contract has to face suit and give compensation to the other party. While in those general cases the party rescinding party, rescinds before the full performance of the contract; hence have to make compensation. Whereas this section gives right to the person when he rightfully rescinds after facing loss due to non-fulfilment of performance of other party in contract.
[1] (1984) 1 SCC 988
[2] (1972) 3 SCC 180
[3] (2011) 10 SCC 573
[4] (2006) 5 SCC 603
[5] (2003) 5 SCC 705
[6] (2004) 11 SCC 425
[7] (1999) 3 SCC 500
[8] AIR 1962 SC 366
[9] AIR 1965 SC 1981
[10] (1976) 3 SCC 108
[11] (1969) 2 SCC 554
[12] (1973) 1 SCC 649
[13] (1969) 3 SCC 522
[14] (1987) 2 SCC 424
[15] S. 75, Indian Contract Act, 1872
by LFIAdmin | Nov 30, 2020 | Uncategorized
By Namita Shetty*, Advocate
nshetty89@gmail.com | Nov 30, 2020
An independent judiciary is the hallmark of a healthy democracy. Judicial Independence is sine qua non of a vibrant democratic system. For Rule of Law to prevail, judicial independence is of primary necessity as only an impartial and independent judiciary can stand as a bulwark for the protection of the rights of the individual. Judicial independence depends on maintenance of transparency in judicial action. The sealed cover procedure adopted to present facts, evidence and arguments in court proceedings is an antithesis of judicial transparency. Hence, the concept of sealing is an exception to the general rule of an open court requiring all proceedings to be conducted with full adherence to the principles of natural justice. Public access to court proceedings promotes judicial integrity which assures fairness in judicial proceedings. Opacity and secrecy has no place in a democratic set up.
In the recent times, the Court’s recourse to sealed cover has become more of a norm rather than an exception. There has been a surge of cases, wherein Courts have allowed submission of evidence in sealed cover, more particularly in (i) Romila Thappar v. Union of India [1] [(2018) 10 SCC 753] (Arrested Activist case); (ii) Manohar Sharma v. Narendra Modi [2] (Rafale Fighter Jet Deal case); (iii) Association for Democratic Reforms & Anr. v. Union of India & Ors. [3] (Electoral Bond case); (iv) Assam Public Works v. Union of India [4] (National Registry of Citizen case); and (vi) Centre for Public Interest Litigation (CPIL) v. Housing and Urban Development Corporation (HUDCO) [5] (Loan Defaulters of Rs500 crore or more case) (vii) Alok Verma v. Union of India [6] (Central Bureau of Investigation Dispute case). In most of the above cases, the Court did not furnish any reasons for taking recourse to sealed covers, thereby, paving way for a new regime of secret justice. This trend of receiving ex parte evidence in sealed covers, without proper justification [7] and not disclosing such evidence to all parties involved in the litigation, is contrary to the basic tenet of ‘equality of arms’, which requires, a fair balance in the opportunities afforded to the parties involved in litigation.
Traditionally, the sealed cover procedure was used only in matters pertaining to (i) national security; (ii) privacy interest, where such interest, outweighs public’s right of access; (iii) matters of sensitive nature which are held in-camera [8]; (iv) where the disclosure of confidential information would harm public interest; and (v) protection of evidence where there is high risk of tampering.
The Court’s power to resort to sealed cover, finds statutory sanction in Section 123 of the Indian Evidence Act, 1872 [9](“Evidence Act”) read with Rule 7 of Order XIII of the Supreme Court Rules, 2013 (“2013 Rules”). Section 123 of the Evidence Act, provides for Government’s privilege in relation to unpublished records relating to affairs of the State, the disclosure of which, will injure public interest. Accordingly, the Government is entitled to hand over such privileged documents in a sealed cover to the Court. Such document/ material is barred from being put on the public court record and their disclosure is subject to a two prong test of (i) preliminary enquiry/ examination by the Court whether documents / material relates to affairs of the State and (ii) consequent discretion of the ‘head of the department’ to permit or ban its disclosure. Additionally, Rule 7 of Order XIII of the 2013 Rules,[10] specifically provides that no party/ person is entitled to receive documents that has been directed to be kept in a sealed cover by the Chief Justice of India or any other judges of the Supreme Court, unless, the latter orders production of such a documents to the opposite party. However, there is no parameter laid down for exercise of such discretion.
This unguided discretionary power vested in the Courts, has resulted in this power being exercised in a light and cavalier manner, in most cases, without even recording any proper reasons, for deviating from the general rule of open justice and accepting sealed cover evidence.
However, a differing approach was adopted by the Supreme Court in the case of P. Chidambaram v. Central Bureau of Investigation [11], wherein, the Supreme Court frowned upon the practice of Delhi High Court in using sealed cover evidence (not disclosed to the accused), while rejecting the accused’ s bail application. The Supreme Court noted that finding recorded by the Delhi High Court based on the material in sealed cover was not justified and accordingly granted bail.
Unlike in the United Kingdom, where apart from providing statutory safeguards, the Justice and Security Act, 2013 which introduced the system of ‘closed material procedure’ [12], restricted its application only to civil proceedings and not to “proceedings in a criminal cause or matter” [13]. In such ‘closed material procedures’, ‘special advocate’ [14] may be appointed to examine the sensitive evidence and represent the interest of the party excluded from reviewing it itself and from attending the hearing. However, in India, the practice of sealed cover evidence has been resorted to even in criminal proceedings in some matters, where such evidence is even kept confidential from the accused, in flagrant violation of principles of natural justice and accused’s right to a fair trial to rebut the material furnished against him.
The recent decision of the Bombay High Court in the case of Raveej Kumar (HUF) v. Anugrah Stock & Brokers Pvt. Ltd., [15] has been well received, which serves as guiding principle for the Indian judiciary on the use of sealed cover procedure. The Court, while emphasizing on transparency in decision making process, rejected the party’s request to furnish documents in sealed cover, merely to save embarrassment for itself. The party seeking to tender documents in sealed cover, expressed the apprehension that information/ document will find its way into press, if Court does not permit sealed cover submission. The Court decried the practice of parties in unilaterally deciding to put material in sealed cover and noted as under:
” Anything that I can see, all parties before me are entitled to see as this is the only method that I know of to ensure an open and transparent decision-making process.
… Since I have made it clear that I am not permitting any sealed cover submissions, there is no question of any party arrogating itself any such right or privilege of any such in any circumstance.”
As rightly said by Philip Stanhope that “Judgment is not upon all occasions required, but discretion always is”. The judicial inconsistencies thrown to light through the routine use, rather misuse of sealed cover procedure, calls for an urgent need for the Court to set out well defined guidelines to temper such judicial discretion and restore public confidence in our judicial system.
[1] Writ Petition (Crl.) No. 260-261 of 2018, Judgment dated September 18, 2018, Paragraph 36. In this case, the Supreme Court perused the registers handed to the Court in sealed cover, containing relevant documents and the case diary produced by the State of Maharashtra.
[2] Writ Petition (Crl.) No. 225 of 2018; RP (Crl.) 46 of 2019. In this case also, pursuant to the Supreme Court’s direction, evidence was produced to the Court in sealed cover.
[3] Writ Petition (Civil) No. 333 of 2015, Order dated April , 12, 2019, Paragraph 13. In this case, interim direction was issued by the Supreme Court to political parties to submit, inter alia, in a sealed cover to the Election Commission of India, the details of donation received through electoral bonds, with particulars of the donor and credit received against each such bond.
[4] Writ Petition (Civil) No. 274/2009- Directions was issued by the Supreme Court to the State Coordinator of the NRC to submit its report in a sealed cover.
[5] Writ Petition (Civil) No. 573 OF 2003, Order dated February 16, 2016. In this case the Supreme Court directed RBI to furnish the list of debtors who are in default of payment of amounts more than Rs. 500/- crores in a sealed cover.
[6] Order dated October 26, 2018 (Paragraph 2) and November 12, 2018- In this case the Supreme Court directed CVC to submit its report relating to allegations of corruption made (in the letter of Cabinet Secretary dated August 24, 2018) against the CBI Director, Alok Verma, in a sealed cover. Court noted that sealed Cover procedure was resorted to “preserve and maintain the sanctity of the institution of the CBI and public confidence in CBI”.
[7] The Supreme Court has in the following cases has set out reasons for restraining to sealed cover practice:-
i. Board of Control for Cricket in India v. Cricket Association of Bihar Civil Appeal No.4235 of 2014 – Order dated May 16, 2014- In this case the Court held that as allegations of betting and spot fixing against 13 individuals were unverified and required further investigation, permitted the report filed by Justice Mudgal Committee in relation to the investigation , to be filed in sealed cover.
ii SEBI v. Sahara India Real Estate Corpn- Order dated June 19, 2015- In this case the Court noted that in order to maintain the confidentiality of the transaction involving the sale of the properties, the master agreement and the press clippings of the same should be taken on record but kept in a sealed cover.
[8] Section 327 of the Criminal Procedure Code, 1973 provides for an exception to the open justice principle and states that cases involving certain crimes committed against women or crimes of a sensitive nature, shall be held incamera. No person without the prior permission of the Court is permitted to publish or print any information in relation to such in-camera proceedings.
[9] Section 123 of Indian Evidence Act, 1872 provides “Evidence as to affairs of State.—No one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, except with the permission of the officer at the head of the department concerned, who shall give or withhold such permission as he thinks fit.”
[10] Rule 7 of Order XIII of the Supreme Court Rules 2013 provides “Notwithstanding anything contained in this order, no party or person shall be entitled as of right to receive copies of or extracts from any minutes, letter or document of any confidential nature or any paper sent, filed or produced, which the Chief Justice or the Court directs to keep in sealed cover or considers to be of a confidential nature or the publication of which is considered to be not in the interest of the public, except under and in accordance with an order specially made by the Chief Justice or by the Court.”
[11] 2019 SCC OnLine SC 1380, decided on October 22, 2019
[12] Section 6 to Section 14 of the Justice and Security Act, 2013
[13] Section 6(11) of the Justice and Security Act, 2013
[14] Section 9 of the Justice and Security Act, 2013
[15] 2020 SCC OnLine Bom 946 , Order dated August 5, 2020
*Namita Shetty is a lawyer based in Mumbai, India. Her work focuses on Commercial Litigation and Arbitration. Views expressed are personal.
by LFIAdmin | Dec 10, 2020 | Uncategorized
By Admin, LegalFormatsIndia.com
Dec 8, 2020
A. (i) Under Section 7 of the Negotiable Instrument Act,1881 (“the Act”), the person who issues and signs the cheque is known as the “Drawer”, the person directed to pay i.e., the bank in this case is known as the “Drawee” and the person in whose favour the cheque is issued is known as the “Payee”.
(ii) If the cheque issued by the Drawer in discharge of any debt or other liability is returned unpaid by the Bank to the Payee due to insufficiency of funds or for the reason that the said amount of cheque exceeds the amount arranged to be paid from that account of the Drawer by an agreement with the Bank, then such a circumstance would amount to cheque bounce or dishonor of cheque. However, dishonor of cheque is, by itself, not an offence under Section 138 of the Act. To constitute an offence u/s 138 of the Act, the procedure as hereinbelow mentioned must be strictly complied with. The relevant provisions for the same are contained under Sections 138 to 147 of the Negotiable Instruments Act, 1881.
Procedure for filing cheque bounce case:
When a cheque is returned unpaid/bounced/dishonored by the Bank, the Payee should not wait to receive the said cheque amount according to the convenience of the Drawer. If required steps are not initiated and completed within the prescribed time limit as mentioned in the Act, the chances of recovering the amount would become minimal and would absolve the Drawer from criminal liability.
Followings are the steps and process to be initiated: –
(a) Cheque must be deposited within 3 (three) months from the date mentioned on the Cheque.
(b) If the cheque is returned unpaid/bounced/dishonoured from the Bank, the Payee must collect the dishonoured cheque alongwith the bank slip or return memo from the Bank immediately.
(c) Thereafter, the Payee must send a Legal/Statutory Notice to Drawer of cheque within 30 (thirty) days from the date of receipt of intimation of dishonor of cheque from the Bank through recognised post with acknowledgment, calling upon the Drawer to make payment of the dishonored cheque within 15 (fifteen) days’ time from the receipt of the said Notice. The said Notice must specify all relevant facts and requisite details contained in the Act. If 30 (thirty) days are already elapsed after return of the dishonoured cheque and the said notice is not sent, the Payee may present the cheque with the bank provided the cheque has not become outdated.
(d) (i) If the Drawer of the cheque is an individual, consider sending notice to the right individual at the right address.
(ii) If the Drawer of the cheque is a sole proprietary firm, preferably notice should be sent to the Proprietor as also the Firm at the right addresses.
(iii) If the Drawer of the cheque is a Partnership Firm, notice should be sent to the Partnership Firm as also all the Partners of the Firm at the right addresses.
(iv) If the Drawer of the cheque is a Limited Liability Partnership (LLP), notice should be sent to LLP and its Designated Partners who are engaged in day-to-day management and control of the LLP at the right addresses.
(v) If the Drawer of the cheque is a Private Limited or Public Limited Company, notice should be sent to company as also to its Directors who are engaged in day-to-day management and control of the Company at the right addresses.
(e) If the Payee (holder of the Cheque) sends legal notice for payment of the dishonoured cheque amount against returned cheque and the Drawer does not pay the dishonoured amount within 15 (fifteen) days of receipt of the said Notice and/or refuses to make payment by responding to the said Notice and/or fails to respond to the said Notice, the Payee can file a criminal complaint under Section 138 of Negotiable Instruments Act, 1881 within one month from the date of expiry of the period specified in the said Notice, in the court where the cause of action has taken place.
B. The offence committed under Section 138 of the Act is punishable with imprisonment upto two years or with fine which may extend to twice the amount of the dishonoured cheque or with both.
by LFIAdmin | Nov 30, 2020 | Uncategorized
By Rachit S Thakar, Advocate
rachitthakar.ils@gmail.com | Nov 30, 2020
The provisions relating to TCS were introduced under the Income Tax Act, 1961 to collect tax in advance from the persons who are engaged in business of trading in alcoholic liquor, scrap, Forest Product etc. and buy such goods under a contract. As per TCS provisions, a seller is required to collect tax from the buyer in respect of certain transactions and deposit it to the credit of Central Government. The tax so collected and deposited through this mechanism is called
“Tax Collected at Source” or “Collection of Tax at Source”
. The tax shall be collected at the specified rate, from the total value of transaction, inclusive of GST.
The Central Government, vide CBDT circular no. 17/2020 dated 29th September, 2020 and press release dated 30th September, 2020, has introduced a new provision for collecting TCS for the sale of goods and depositing the same to the Government with effect from 1st October, 2020. These provisions are given in Section 206C (1H) of the Income Tax Act.
According to the new provision of TCS, if purchaser’s turnover exceeds Rs. 10 crores in the previous financial year i.e. the year ended 31st March 2020, then the seller has to collect and deposit TCS on the receipts from sale of goods from such purchaser from whom he has received more than Rs. 50 Lakhs as sale consideration during the current Financial year. The TCS is payable on the amount of receipt which is greater than 50 Lakhs and received after 1st October 2020. The rate of TCS is 0.1%
Payments received here, refers only to payments received in connection with “sale” of goods. This is receipt based on TCS; hence even if the payment is received in advance for supply of Goods, the TCS provisions are applicable.
Furthermore, according to the first proviso, Tax shall be collected at a higher rate of 1% instead of 0.1%, in case the buyer fails to provide a valid PAN and Aadhaar number.
The second proviso to section 206C(1H) simply states that both the provisions of TDS and TCS shall not apply to the transaction simultaneously. Normally in case of sale of goods, there is no applicability of TDS. It is important to note that in order to make this proviso applicable, the buyer must be liable to deduct tax at source and has actually deducted tax at source on the transaction. Both conditions have to be satisfied.
The explanation to the provision only defines the term “buyer” and the “seller”.
The term buyer shall mean a person who purchases any goods but does not include the Central Government, the State Government, an Embassy, High Commission, Legation, Commission, Consulate, Trade Representative of a foreign state; or any Local Authority as defined in explanation to the clause 20 of section 10 of the Income Tax Act. Further it does not include any person importing goods into India or any other person as Central Government may, by notification in the Official Gazette specify for this purpose, subject to such conditions as may be specified therein.
The term seller is defined to mean any person which means it covers an individual, firm, company, etc. and the quantum of total sales or turnover or gross receipt of such person is exceeding Rs.10 crore. Thus, in computing the limit of Rs.10 crore, all the segments of the seller have to be considered, be it sale of goods or provision of services, though tax is required to be collected only in the case of sale of goods to the buyer. Further seller also does not include any person as Central Government may, by notification in the Official Gazette specify for this purpose, subject to such conditions as may be specified therein.
This provision of TCS on Sale of Goods under section 206C(1H) has wider ramification because till now TCS was applicable only on certain items. But covering all the goods within the purview of TCS, almost all the business entities are under the umbrella of TCS.
Some questions pertaining to TCS provisions include:
Does it apply to supply of services as well?
The provision that has been brought at this time is only in relation to “sale of goods” and services have been kept away from this provision. Therefore, this provision is not applicable to the payment of consideration received in relation to supply of services.
Also, inter-branch transfers, or stock transfers are not “sale of goods” hence no TCS liability arises.
Furthermore, all the shares are defined as goods under the Sale of Goods Act 1930, though CBDT has clarified that provisions of this section shall not be applicable in relation to transactions in securities and commodities which are traded through recognized stock exchange or cleared and settled by recognized clearing corporation both domestically and internationally.
Does TCS apply to Job work or works contract?
A contract for job-work or a works contract come under the purview of TDS provisions, under section 194C. Hence, TCS provisions under section 261C(1H) shall not apply here.
Does TCS apply to sale of land, building, flats etc.?
Land, buildings, flats are immovable properties and are not “good”. Therefore provisions under this section shall not apply to sale of immovable properties.
Development rights, leasehold rights or any other rights related to immovable properties are also held as immovable properties. Thus, TCS provision shall not apply to transfer or TDRs and leasehold rights.
Does TCS apply to sale of jewellery?
Jewellery entails goods and hence comes within the purview of this section. Prior to 1st April 2017, TCS on sale of jewellery was covered under section 206C(1D). This section is now omitted.
Does TCS apply on sale of goods with installation charges?
In case of sale of goods with installation charges, it amounts to sale of goods even if the value of goods and installation charges are indicated separately on the invoice.
This section shall apply if the conditions specified in this section are satisfied. The position will remain the same if there is no bifurcation of value of goods and installation charges in the invoice and the same is raised as consolidated amount.
If the sale of goods and installation charges are independent activity, then the provisions of this section shall apply only to the sale of goods. The receipt from installation charges will amount to sale of services hence not applicable here.
Does TCS apply on interest due to delayed payment?
When the invoice is raised for sale of goods and buyer delays the payment, thus prompting the seller charges interest for such delay. The interest actually represents the price of goods rather than interest for money borrowed. The definition of interest under section 2(28) of the act only includes interest on money borrowed. Although under GST law the interest paid on delayed payment of invoices/consideration is not with respect to money borrowed but for non-payment of value of goods/consideration within the stipulated period. Since such an interest represents the value of goods, TCS shall be applicable on interest of delay in payment of invoices.
How will this Levy Affect The Automobile Sector?
Although TCS is applicable to automobiles sector for selling of a Motor vehicle above Rs. 10 lakhs to the customer under section 206C(1F) but it is not applicable from the manufacturer to the distributor, dealer or sub-dealer hence this sector is not free from this new TCS provision.
Is There Any Relaxation In This Rate In The Corona Period?
Due to the corona outbreak, there is a 25 percent discount on this rate till 31 March 2021 and the effective rate will be 0.075% up to this date. This TCS is to be deposited on receipt of payment and the last date for deposit of the same will be the 7th day after the end of the month. If your buyer who comes under this TCS does not have a PAN number / Aadhaar number, which is hardly any buyer you have, then this rate of tax will be 1% percent and there is no relaxation of it.
Critical Analysis
If the purpose of this provision is to keep a vigilant eye on the taxpayers, there is no pertinent need for this provision as nearly all buyers who make purchases above Rs.50 Lakhs and then pay the amount of this purchase are all registered under GST. Second, it will be applied on all points such as manufacturer to distributors, distributors to dealer and dealers to sub-dealers. There are many sectors that will be badly affected by this, such as automobile Sector. There are many more reservations with respect to this provision and only time will tell if it has achieved its intended purpose.
