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 | Home
By PRAJJWAL SHARMA, Law Student, HPNLU, SHIMLA
prajjwalsharma590@gmail.com| March 10, 2021
What are the new social media regulations called?
The new social media regulation is called, “The Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021”.
What are these “Intermediaries”?
The term “intermediary” has been defined under the Information Technology Act, 2002 (“IT Act”) with respect to any particular electronic message and means any person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message.
Like vicarious liability, their arises a liability on the side of the intermediary if any illegal activity is observed by any party on the particular platform.
It can be referred as Intermediary liability- it means that the intermediary, a service that acts as ‘intermediate’ conduit for the transmission or publication of information, is held liable or legally responsible for everything its users do.
What changes are bought in by these rules?
(1) Intermediaries must identify the originator of any malicious content and pull it down within 36 hours of it being flagged. Flagging can be done through a court order or from a competent government agency after which the unlawful information has to be disabled.
(2) Platforms will be required to provide information including related to verification of identity, to lawfully authorized agencies within 72 hours.
(3) Streaming platforms have to classify content into five categories-
(i) U (Universal)
(ii) U/A (7+)
(iii) U/A (13+)
(iv) U/A (16+)
(v) A (Adult)
(4) Digital News Media Organisations can be directed to remove any content which falls under section 69A of the IT Act, 2000.
(5) Stand-alone digital media organisation need to follow the code of journalistic ethics, laid down by the Press Council of India, currently observed by print media and the cable and TV regulation act, which applies to television news.
(6) The intermediaries have to appoint a grievance redressal officer who will deal with complaints and also have to share the name and details of such an officer.
(7) Social Media Intermediaries have to appoint a chief compliance officer, nodal contact person, a resident grievance officer, all of whom should be resided in India.
What are the offences to be curbed under this regulation?
All the sections mentioned below are from the Information Technology Act, 2000
(1) Section 66A-This section provides the punishment for sending offensive messages through communication services etc.
“Any person who sends, by means of a computer resource or a communication device, –
(a) any information that is grossly offensive or has menacing character; or
(b) any information which he knows to be false, but for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred or ill will, persistently by making use of such computer resource or a communication device;
(c) any electronic mail or electronic mail message for the purpose of causing annoyance or inconvenience or to deceive or to mislead the addressee or recipient about the origin of such messages,
Here, the terms “electronic mail” and “electronic mail message” is referred to texts, audios, videos received on a computer system.
(2) Section 67- It states the punishment for publishing or transmitting obscene material in electronic form. “Obscene”, here is defined as any material which is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely, having regard to all relevant circumstances, to read, see or hear the matter contained or embodied in it.
(3) Section 67A- It defines punishment for transmitting or publishing material containing sexually explicit act etc in electronic form.
(4) Section 67B- Imprisonment of five years or fine upto ten lakh rupees for publishing or transmitting of material depicting children in sexually explicit act etc. in electronic form. For the purpose of explanation of this section, “children” is defined as a person who has not completed 18 years of age.
(5) Section 69A- It defines the power to issue directions for blocking for public access of any information through any computer resource, where-
“The Central Government or any of its officers specially authorised by it in this behalf is satisfied that it is necessary or expedient so to do, in the interest of sovereignty and integrity of India, defence of India, security of the State, friendly relations with foreign States or public order or for preventing incitement to the commission of any cognizable offence relating to above.”
What if the origin of the content is from outside the territory of India?
In the case where the initial origin of the content is from another another nation or outside the territorial jurisdiction of India. The intermediaries have to declare the identity of the user which was the first to forward it into the nation.
For example, an offensive post is originated from a European country. The individual to transmit the post from that country to India has to be held accountable for the same.
Does it violate the immunity provided to intermediaries in section 79 of IT Act?
The intermediaries are provided some immunity in the section 79 of the IT act. It gives exemption to the intermediaries in some certain cases.
(1) Notwithstanding anything contained in any law for the time being in force but subject to the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any third-party information, data, or communication link made available or hosted by him.
(2) The provisions of sub-section (1) shall apply if–
(a) the function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted; or
(b) the intermediary does not–
(i) initiate the transmission,
(ii) select the receiver of the transmission, and
(iii) select or modify the information contained in the transmission;
(c) the intermediary observes due diligence while discharging his duties under this Act and also observes such other guidelines as the Central Government may prescribe in this behalf.
(3) The provisions of sub-section (1) shall not apply if–
(a) the intermediary has conspired or abetted or aided or induced, whether by threats or promise or otherwise in the commission of the unlawful act;
(b) upon receiving actual knowledge, or on being notified by the appropriate Government or its agency that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material on that resource without vitiating the evidence in any manner.
The only point to note while talking about the debated collision of section 79 and the new rules is clause (b) of the sub-section 3 of the same. The highlighted text states that upon receiving actual knowledge or after being notified by the government authorities if the intermediary fails to disable the access to the controversial data, the exemption will not be provided to the intermediary.
If we look again at the new rules, it is just compulsory for the intermediaries to share the origin of the post which are against the public morality, interest as well as the one which is against sovereignty and integrity of the nation.
Does it curb the individual’s free speech?
As long as we are on the topic of individual’ freedom of speech being restraint with the new regulation being implemented, it can be said that there are meagre chances of that event to happen. Even before the implementation of this rule, section 66A, 67, 67B & 69A were in existence which put same level of vigilance on social media posts as they will do now.
Free speech though provided to the citizens is restrictive in nature. Freedom of speech is a form of liberty provided to the citizens of the land. One of the two types of liberty is- negative liberty, which states that liberty is absence of restraints.
Such a situation leads to social catastrophes. Thus, not restraining the freedom of speech to an extent is also dangerous to the integrity and sovereignty of the nation.
