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Racism In Sports: International Laws & Rules From Various Jurisdictions

By: Umang Chaturvedi

 

“Why are all the angels white?

Why ain’t there no black angels?”

                                                        -Muhammad Ali

Abstract

Sports have acted as a medium to connect people beyond language, ethnicity, culture and boundaries. In its pure sense, it is a satisfying activity at the micro-level and nothing less than a war at the macro level. The scale of competition increases with the hierarchy and so does the complexities. Some athletes and sportspersons are revered equivalent to Gods in their respective fraternity by the public. This respect is gained by them because of the magnanimity of sports. The business that goes behind the curtains has resulted in this magnanimity. But these Gods within the ambit of their magnanimity have not been untouched to the social issues which normally go unnoticed. Issues like racism in sports are not done yet from the world let alone the sporting facility. This article elucidates the reasons of racism present in professional sports with an attempt to define the core and genesis of the problem.

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The author explains the legislations/law which helps to counter this problem at global level. Additionally, the author has tried to provide an analysis through the cases of international performers who were subjected to racism in their careers. Certainly, the issue of disparity on the basis of colour begins within the nations. The problems are much more than racism being a ground of discrimination. In a country like India the issues even extend to discrimination on the basis of caste, sub-caste, race, gender, sex, etc.

  1. Introduction

Racism is defined as “a belief that race is the primary determinant of human traits and capacities and that racial differences produce an inherent superiority of a particular race”[1] by the Merriam Webster dictionary. Senseless killings and instances of Eric Garner (2014), AhmaudArbery (February 2020), Breonna Taylor (March, 2020) and George Flyod (May 2020) have witnessed sports community coming together to support the right cause irrespective of differences. Such issues force athletes to speak effectively as they do not want to go unheard for the social cause. LeBron James, Stephen Curry, James Harden, etc. are some of the most vocal NBA players after the recent incidents occurred. Other figures from different sports that have been vocal are Lewis Hamilton, Colin Kaepernick etc. They have supported the cause too.

The problem has not been untouched to the fraternity of sports. Rather it is more rampant. Any act within the territorial boundary of a competitive sport can be disguised as an act in the heat of the momentby the offender. Calm and composure are expected the most out of an athlete and sportsperson. These acts from the coolpeople then cannot be covered under the garb of competition or heat of the moment.

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  1. Core Problem

With cricket being popular as the game of gentlemen, it upsets the fraternity when conflicting views are shared by somebody belonging to the game itself. In late June 2020, West Indies cricket team’s captain Jason Holder said, “it is time for the entire cricketing fraternity to treat racism as seriously as match-fixing or doping and to hand tougher bans on racial offenders.”[2] Such statements point fingers at the authorities and the incapability of sport-specific laws which need to get stricter.

The core of the problem is the chauvinism that a superior country’s men carry with them. Such stereotypes are broken easily when a deprived and dominated wins or creates his/her space in the sport bare minimum. In context, 2013’s Chadwick Boseman starrer sports-drama film, “42”[3] came in light. It highlighted the efforts of an African-American Major League Professional player Jackie Robinson who was subjected to racism in a then all-white baseball league by fellow players and fans. His jersey number was later retired in respect, on which the film’s name was based.To draw a parallel from the same, the core of the issue lies within the people of the sporting fraternity. Everybody associated with it especially the fans.

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  1. Laws, legislations and efforts

Issues raised through acts done by black athletes are certainly to bring into light the adversities they’ve faced over the course of history. These issues are political in nature which overlaps with sports. This overlap has its own interpretation where some define it to be right and other define it to be wrong. “Dissent in sports is usually understood as expressing dissatisfaction against an umpire’s decision. However, in the present context, dissent must be understood as a conscientious protest against a larger problem that has socio-political undertones.”[4] In this sub-heading, the author has tried to analyze various measure and steps taken by the way of local laws of different jurisdictions. The examples considered for study include and are categorized into Australian laws, European laws and initiatives, Conventions of United Nations, laws of USA and Indian laws.

  1. Australia

The provisions of the International Convention on the Elimination of All Forms of Racial Discrimination (“ICERD”)[5] are incorporated under Australian Law through its Racial Discriminations Act of 1975. It is a general legislation extending to sports and related organizations. Australian Football League (AFL) guidelines are strict regarding racism since the introduction of Rule 30 in 1995. Rule 30 is used to tackle racism and religious vilification. Even the laws of Australia are stringent regarding racism in general through Racial Discrimination Act, 1975 and Racial Hatred Act, 1995[6].

In 2008, Indian spinner (cricketer) Harbhajan Singh was penalized for allegedly expressing racial views on an Australian cricketer Andrew Symonds when the former called him ‘monkey’ during a test match in Australia. This embarrassing event was a confusing one. It was deliberated if the act was racial or not because the remark clearly did not qualify for the alleged violation but it was still derogatory. Eventually Justice John Hansen of Australian Appeal Court absolved the cricketer of liability and cleared the charges. What adds to the problem is that a spectator cannot be banned or fined for comments because that is the major revenue generation source for clubs. Australian local football has seen various instances where boys aged 12-14 who come from other countries to make their career face racism at a vulnerable stage.[7]

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  1. Europe

Europe has been the center stage for football with record breaking viewership every year. Multiple local leagues are supported due to interest and large fan base. As a cherry on the top, UEFA Europa League and UEFA Champions League have dominated global football in all terms. There are multiple organizations and legislations which help in tackling the problem in Europe. FARE (Football Against Racism in Europe) Network is one such organization which has received backing from governing bodies like UEFA, FIFA and European Commission for the common objective of eradicating the social issue. Headquartered in London, it was set up in the year 1999 at Vienna (Austria). It gained relevance in the contemporary scenario when it began to work as a network of enthusiasts, players, associations, etc. as members to stand strong against the discrimination.

A similar initiative as a 3 day campaign was launched in 2006 by the Romanian Football Federation in association with National Council for Combating Discrimination (a society-institute based in Romania). It was named Racism Breaks the Game which was organized to combat discrimination against the Romani minority and to promote fair play in football. Even UEFA DR Article 14[8] prohibits racism of any form and prescribes ways to tackle it through guidelines. Article 165 of Treaty on the Functioning of the European Union (TFEU) also acts in the same regard. It deals with all such issues arising out of sports. Lisbon Treaty though allows the Union for minimal interference but acts strictly through courts for cases arising out of racism.

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  1. United Nations and United States of America (USA)

United Nations has time and again used sports as a mode to end racism at global level. It was reiterated by then Secretary-General Ban Ki-moon that, “Sport is a universal activity that can reaffirm our fundamental human rights.”[9]He urged to “use the power of sport to end the blight of racism” as it marked the annual International Day for the Elimination of Racial Discrimination in 2013.Additionally, The Durban Programme of Action 2001 in paragraph 128, 129 and 218 urges international and national sports bodies to tackle racism effectively. Inter-American Convention against Racism, Racial Discrimination and Related Forms of Intolerance, 2013[10] is another internationally signed document.

In USA, the Patsy Mink Equal Opportunity in Education Federal Act, 1972 complements the Civil Rights Act, 1964 “in the area of public education and federally assisted programmes (enacted to end discrimination in various fields)”[11]. The legislation has ensured equal access to sports for all active programmes that receive federal funding in USA[12]. Even after attaining peak of success in sports, public and spectators disregard such facts and direct racist comments in NBA, Pro Baseball and NFL. In early 2019 Oklahoma’s basketball star Russell Westbrook faced racist remarks in an away game at Utah.

  1. India

India is a home to multiple sports and professional leagues like IPL, ISL, IHL, Pro-Kabaddi etc. The country is more special due to its diversity. Additionally the essence of regional representation varies. There are sub-divisions and regions within regions. Even a whole north-east is described into 7 sisters further. South, in itself is divided in historical kingdoms now states. This division is interesting but when people from different backgrounds face each other in state/national camps, there are conflicts of opinions, likes, dislikes which might be detrimental in the longer run for a team representing at the international level.

The best example can be drawn from 2007’s Indian film Chak De! India. Shah Rukh Khan embodied the role of hockey coach Maharaj Krishan Kaushik mixed with the background of Indian player Mir Ranjan Negi. The film was based on a real story where Indian Women’s Hockey Team won 2002 Commonwealth Games. It showed the reality of internal conflicts (due to colour, region, state, racial and religious bigotry[13] etc.) between players during the camp.

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India introduced the Anti-Discrimination and Equality Bill 2016 (ADE Bill) in the Lok Sabha to tackle any form of discrimination. Other than broad discussions under Article 14, 15, 16 of the Constitution of India, federations are entrusted with the duty to handle all issues relating to sports. Additionally, Section 153A of the Indian Penal Code, 1860 deals with the punitive measure related to racist acts or comments.

  1. Conclusion – Solution and Criticism

In all, the issue of racism has proven to be detrimental to the development of some athletes but there are many amazingly great sportspersons who have defeated all odds and reached the top in their respective sports. The problem is deep rooted in the social system which comprises of humans, which is a much broader aspect than society. It includes athletes, sportspersons and all other people related to the fraternity of sports in one way or other. To eradicate the issue of racism from sports, the primary need is to make people realise that there are no differences in reality, they are essentially in the mind of individuals and their beliefs, which is prima facie incorrect.

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Until the mentality of important organizations like IOC does not change, no substantial change can be found. The controversial Rule 50 of the Olympic Charter prohibits any “kind of demonstration or political, religious or racial propaganda…in any Olympic sites, venues or other areas”. It was clarified by the authorities in January 2020 in preparation of scheduled Olympics that any gesture or kneeling (like past incidents of Gwen Berry’s fist on podium and Colin Kaepernick’s kneeling) will not be entertained at the events.

Until IOC resolves issues like these where the anti-racist demonstration are looked at from a perspective of political overlap, there won’t be a solution. The international sports guidelines in context with racism are soft but strict. Still there is a requirement for spectators, fellow players and organizations to be careful specifically around the young representatives of respective sports. A negative impression is made for a second inside the court/field which stays and impacts a vulnerable young player for his whole life. Sports should be used as a medium for the primary purpose of leisure and shall only be associated with the efforts, hard-work, dedication and sweet success involved.

[1]Racism, Merriam-Webster Dictionary (Jan. 23, 2009).

[2]Sportstar, Jason Holder: Racism Should be Treated as Seriously as Match-Fixing and Doping, (June 28, 2020), https://sportstar.thehindu.com/cricket/england-vs-west-indies-racism-sammy-jason-holder-gayle-icc-ipl/article31 937748.ece.

[3]History.com, Jackie Robinson Breaks Color Barrier, (April 13, 2020), https://www.history.com/this-day-in-history/jackie-robinson-breaks-colorbarrier#:~:text=On%20April%2015%2C%201947%2C%20Jackie,for%20more% 20than%2050%20years.

[4]Shivam Singh, When Sports Align With Dissent, The Indian Express, (June 26, 2020), https://indianexpress.com/article/opinion/black-lives-matter-when-sports-aligns-with-dissent-6477907/.

[5]Australian Human Rights and Equal Opportunity Commission, What’s the Score?A Survey of Cultural Diversity and Racism in Australian Sport, (2006), p. 8, https://www.humanrights.gov.au/publications/whats-score.

[6]Id.

[7]Sophie Kesteven, Kids are Being Subjected to Racist Abuse at Junior Sports Games, ABC Radio National, (Nov 1, 2019), https://www.abc.net.au/news/2019-11-01/racism-in-junior-sport-australia-talks/11636174.

[8]UEFA Disciplinary Regulation, 2019 Edition, https://editorial.uefa.com/resources/0257-0ddf58550d23-3b55809 3983e-1000/disciplinary_regs.pdf.

[9]UN News, No Place for Racism in Sports, UN Declares on International Day, (March 21, 2013), https://news.un.org/en/story/2013/03/435072-no-place-racism-sports-un-declares-international-day.

[10]Organisation of American States, Inter-American Convention Against Racism, Racial Discrimination an Related Forms of Intolerance, http://www.oas.org/en/sla/dil/inter_american_treaties_A-68_racism.asp.

[11]ACLU, Gender Equity in Education, https://www.aclu.org/title-ix-gender-equity-education.

[12]U.N. GAOR, 69th Sess., A/69/340, Combating Racism, Racial Discrimination, Xenophobia and related intolerance, (Aug. 22, 2014), https://www.ohchr.org/Documents/Issues/Racism/A-69-340.pdf.

[13]Jaspreet Pandohar, Chak De India! BBC, (August 1, 2007), http://www.bbc.co.uk/films/2007/08/06/chak_ de_india_2007_review.shtml.

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Separation of Powers Between the Organs of the Government in India

“When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty, because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, and execute them in a tyrannical manner.” – Montesquieu

Introduction
The division of power is based on two methods, i.e., either territorial where the power is divided between the central government and different regional governments; or functional as the work of the government has become so extensive that in the interest of efficiency and effectiveness it is deemed necessary to entrust the work of the government to different and specialized organs. Government powers have traditionally been classified as legislative (law-making), executive (law-enforcement) and judiciary (interpretation of laws and adjudication). In modern political thinkers it was Bodin who first advocated the idea of separation of executive and judicial powers in the interest of better administration of justice. Locke also advocated the separation of powers and recognized the importance of judicial function to be just and impartial. However, ideas of these great thinkers were developed and formulated into a coherent theory by the French philosopher Montesquieu who gave the doctrine of tripartite division of governmental functions with mutual checks and balances. He was of the opinion that it is not the machinery of government or political institutions which make the people free. It is the spirit or the manner in which the government organs function that secure freedom or liberties of people. Montesquieu was deeply impressed by the individual freedom and liberty present in the English society and while analyzing the English Legal system he observed that the stability and liberties enjoyed was derived from their adherence to the principle of separation of powers. The doctrine of separation of power as laid down by Montesquieu was to safeguard individual liberty.

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Moreover, there is no liberty if the power of the judiciary is not separated from the legislature and executive. Had judiciary been joined with the legislative then the life and liberty of the individual would be subject to arbitrary control because the judge would then be the legislature; had it been clubbed with the executive then the judge might behave with violence and oppression. Montesquieu vehemently opposed the concentration of government powers, legislative, executive and judicial, in the hand of one person or in the same body of person which would be dangerous to individual liberty. There could be no protection of the individual freedom as the legislature, the prosecutor and the judge all would be same and hence there can be no check against abuse of executive authority, legislative tyranny or judicial misbehavior. He therefore, advocated that the three functions of the government should be entrusted to three different departments, each separately and independently performing its own distinct function.

 

Application of Doctrine of Separation of Powers under Indian Political System

In the Indian Constitution, which provide for parliamentary form of government strict separation of the Legislature and the Executive is not possible as the Cabinet consist of persons who are Members of Parliament. Under the Indian Political System there is no rigid separation of powers. The Indian Constitution had the privilege to see the working and taking advantage of other democratic constitutions with their operations.

Under Articles Articles 53(1) and 154(1), the Constitution of India has vested the executive power in the Union and the State with the President and the Governor. However, there is no explicit provision of vesting the legislature and judicial powers in a particular organ. In fact, the power to amend the Constitution is regarded as part of the constituent power conferred on Parliament.

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In Kesavananda Bharati v. Union of India the Supreme Court of India considered the question whether the Parliament’s power to amend the Constitution was unlimited so as to permit amendment or repeal of any provision of the Constitution. A Bench of 13 Judges declared that the power to “amend” does not include the power to abrogate the Constitution or to damage or destroy the basic structure of the Constitution. Some of the Judges mentioned a few basic features by way of illustration: Supremacy of the Constitution, Democratic Republican form of government, Secular character of the Constitution, separation of powers among the legislature, the executive and judiciary, the federal character of the Constitution, rule of law, equality of status and of opportunity.

Subsequently, power of judicial review has been declared as a basic feature of the Constitution in L. Chandra Kumar v. Union of India. The Supreme Court has since struck down quite a few amendments to the Constitution, made by Parliament as violative of the basic structure of the Constitution. Therefore, the Judiciary is independent in its field and there can be no interference either by the executive or the legislature. The judges of the Supreme Court are appointed by the President in consultation with the CJI and judges of the Supreme Court the Supreme Court has power to make Rules for efficient conduction of business. In fact, it is noteworthy that Article 50 of the Constitution puts an obligation over the state to separate the judiciary from the executive. However, since Article is a Directive Principle of State Policy (DPSP) it cannot be enforced in a court of law and has mere persuasive value.

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Similarly, there are certain provisions in the constitution which provides for powers, privileges and immunities to the Members of Parliament from judicial scrutiny into the proceedings of the house. Such provisions are thereby making legislature independent, in a way.

A landmark decision in this regard was the case of Keshav Singh, which was a special reference case, where he was committed to incarceration on the behest of contempt of the Uttar Pradesh State Legislative Assembly. A petition was filed and the Legislative Assembly took a serious view of the matter and passed a resolution that Keshav Singh, his Advocate who moved the High Court and the two Judges who entertained the petition and granted bail had committed contempt of the Assembly and all of them should be produced before it in custody. Subsequently when the matter reached the Supreme Court, where they clarified that once a court is satisfied about the existence and the extent of privilege and its breach it should decline to interfere with the privileges of the House. However, the two judges in this case were not guilty of contempt.

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The Constitution provides for the conferral of executive power on the President. The powers and functions of the President have been powers enumerated in the Constitution itself. The President and the Governor are immune of civil and criminal liabilities. Generally, the legislature is the repository of the legislative power but, under some specified circumstances the President is also empowered to exercise legislative functions. For instance, while issuing an ordinance, framing rules and regulations relating to Public service matters, formulating law while proclamation of emergency is in force. These were some instances of the executive head becoming the repository of legislative functioning. President performs judicial functions also while assenting to death sentences.

On the other hand, the parliament performs certain judicial functions as well. It can decide the question of breach of its privilege, and in case of impeaching the President; both the houses take active participation and decide the charges. Judiciary, in India, too can be seen exercising administrative functions when it supervises all the subordinate courts below. The power of judicial review exercised by the Judiciary also prevents legislative transgression in powers of different organs of the government. The National Judicial Appointment Commission (NJAC) judgement is one such case where the judiciary declared the law of the parliament to be void as it undermined Judicial Independence and Judicial Primacy in the appointment of judges.

Conclusion
In India, we follow the principle of separation of functions and not of powers. And hence, we do not abide by the principle rigidly. An example of it can be seen in the exercise of functions by the Cabinet ministers, who exercise both legislative and executive functions. Article 74(1) gives the Cabinet an upper hand over the executive by making their support and guidance mandatory for the formal head. The executive, thus, is derived from the legislature and is dependent on it, for its legitimacy.

This was the observation made by the Supreme Court in Ram Jawahar v. Punjab. Indian system is developed on the concept of ‘checks and balances’ and the same is consistent with the Montesquieu who had recognized that an absolute separation of powers would lead to state of repose and inaction. Therefore, none of the three organs can dispel the essential functions of the organs, which constitute a part of ‘basic structure’ doctrine. Some of these instances of checks and balances are legislative review of the functioning of the executive by deliberations and discussion in the Parliament; executive appointment of judges (President appoints them); The President can set aside a law passed by the legislative or any guidance provided by the Union Council of Ministers when the same is not in alignment with the Constitution of India. In case, the president assents to the law passed duly by the legislative, it can be repealed by the Supreme Court after a fair trial if it is against the Basic structure of the Constitution. Thereby, it would not be wrong to say that separation of powers in itself is not foundation of liberty. It is the system of checks and balances which allows individual liberty to exist. In fact, in words of Lord Acton: – ‘Power corrupts and absolute Power tends to corrupt absolutely. Conferment of power in a single body leads to absolutism. But, even after distinguishing the functions, when an authority wields public power, then providing absolute and sole discretion to the body in the matters regarding its sphere of influence may also cause abuse of such power. Therefore, the doctrine of separation of powers is a theoretical concept and is impracticable to follow it absolutely.’

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Comparative Study of Drugs and Cosmetics Law In U.K., U.S.A And Germany

By: Vanshika Tewari

ABSTRACT

Human culture is formulated on the basis of ethical society, honesty, integrity, respect, pursuit of excellence, civic duty, accountability and loyalty. Since the dawn of civilization , by trial or error, it has been established that a society and more so it’s medical profession, can survive and thrive only by observance and practice  of certain rules of conduct guided by ethical, moral, legal and social values of land. Medicine has been a field of utmost diligence and even though so many centuries have passed, this profession still holds its merit and authenticity. Further, the need for certain rules and legislative statutes governing the establishment and working of hospitals and its manpower was aggrieved at the time of the colonial regime and the World War scenario. Presently,  there are various other laws pertaining to the governing of hospitals, practitioners/ other employees, sale and storage of the drugs, license and permissions , public and environmental health ,etc.

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Every nation has certain laws that help them in maintaining the standard quality of its drugs and cosmetics and as well as regulates its manufacturing, labelling, export,etc.

In this report we shall further talk about how countries like USA, Germany and United Kingdom regulate their medicines and also compare the methodology they have applied in maintaining and meeting the global health standards for their own produced drugs and cosmetics.

BRIEF OVERVIEW OF THE PREVALENT DRUGS AND COSMETICS LAWS IN THE U.K., U.S.A AND GERMANY

  • UNITED KINGDOM

In spite of the fact that planned to happen from March 29, 2019, the Brexit has now deferred to October 31, 2019. The choice is expected to give more opportunity to the United Kingdom (UK) and the European Union (EU) to concur upon the provisions of the UK leaving the EU.

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Up to this point, the EU guidelines straightforwardly influenced the restorative items that are appropriated in the UK. In any case, with the Brexit in situation, they are not, at this point expected to be appropriate in the UK locale as the UK is required to be treated as a third nation. In basic words, the UK won’t need to conform to the guidelines pertinent to the EU part states. Consequently, to line up with the Brexit changes, for Cosmetic items, some new laws have been laid before the UK parliament.[1]

United Kingdom has for ages been a part of the European Union and therefore the gudlines laid down by the EU for the working and regulation of this sector was to be followed and obligated too but earlier in 2019 after the BREXIT happened U.K. has given up with the E.U’s guidelines and framing their own laws pertaining to this, like –

The UK Cosmetic Regulations Draft, The Cosmetic, Toiletry and Perfumery Association (CTPA) has proposed the UK Cosmetic Products Statutory Instrument to the UK parliament to guarantee that post the Brexit just safe corrective items are circulated in the UK. The new draft will be in accordance with that of the EU’s including the rundown of prohibited and confined fixings.

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To enter the UK beautifiers showcase, organizations will be required to delegate a UK-based Responsible Person (RP), who is relied upon to tell the item to the capable position. To ensure the notice procedure smoothed out, the CTPA is by all accounts during the time spent structure the necessary item notice entrance for the UK like that of the Cosmetic Product Notification Portal (CPNP) of the EU.[2]

Once Brexit happens, all the corrective items told to the EU through CPNP are required to be informed to the UK notice framework inside ninety (90) days. Following are the pre-necessities for informing an item in the UK-

The name and category of the cosmetic product

The name and address of the responsible person

The content and ingredients of the product

What more! – the name of a restorative item should likewise bear the name and address of the Responsible Person. Post Brexit, restorative items marked with an EU-27 location and consistent with the EU naming guideline will be viewed as agreeable for a long time in the UK. If there should be an occurrence of imports additionally, the UK should consent to the import guidelines of the EU.

But still the restorative guidelines of both the districts are as of now muddled!

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  • UNITED STATES OF AMERICA

In the United States, all drugs and cosmetics are regulated by the Food and Drug Administration (FDA) under authority granted by the Federal Food, Drug, and Cosmetic Act of 1938.

The extent of FDA’s administrative authority is wide. FDA’s duties are firmly identified with those of a few other government organizations. Regularly disappointing and mistaking for customers is deciding the proper administrative organization to contact.

As a rule, FDA controls:[3]

  • Medications,

Including: doctor prescribed medications (both brand-name and conventional) ,non-solution (over-the-counter) drugs ,Biologics, including:  immunizations for people ,blood and blood items ,cell and quality treatment items tissue ,and tissue items allergenics

  • Clinical Devices,

Including:  basic things like tongue depressors and chamber pots  complex advances, for example, heart pacemakers dental gadgets ,careful inserts and prosthetics.

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FDA’s legitimate authority over makeup is not the same as our position over different items we manage, for example, drugs, biologics, and clinical gadgets. Under the law, corrective items and fixings needn’t bother with FDA premarket endorsement, except for shading added substances. In any case, FDA can seek after implementation activity against items available that are not in consistence with the law, or against firms or people who abuse the law.

FDA has reliably exhorted makers to utilize whatever testing is important to guarantee the security of their items and fixings. Firms may prove security in various manners. FDA has expressed that “the security of an item can be enough validated through (a) dependence on effectively accessible toxicological test information on singular fixings and on item plans that are comparable in structure to the specific corrective, and (b) execution of any extra toxicological and different tests that are proper considering such existing information and data.”[4]

FDA may make administrative move in the event that we have solid data demonstrating that a restorative is tainted or misbranded. For instance, FDA can seek after activity through the Department of Justice in the government court framework to expel defiled and misbranded beautifying agents from the market. To forestall further shipment of a defiled or misbranded item, FDA may demand a government area court to give a limiting request against the producer or merchant of the violative restorative. Beautifying agents that are not in consistence with the law might be dependent upon seizure. “Seizure” implies that the administration claims property from somebody who has disregarded the law, or is associated with doing as such. FDA additionally may start criminal activity against an individual abusing the law.

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  • GERMANY (EU)

Germany is an integral part of the European Union and this is why the medical manufacturing sector here is ruled by the guidelines laid by the EU itself, following are some of the guidelines being put to use so far-

  • Corrective/Cosmetics/Drugstore items are dependent upon EU wide wellbeing guidelines. They should not be obligated to make harm human wellbeing, when applied under ordinary states of utilization or under sensibly predictable states of utilization.
  • It is a criminal offense to flexibly restorative items which don’t consent to the guidelines or neglect to agree to other related prerequisites.
  • All organizations managing in beautifying agents, including retailers, wholesalers, shippers and producers, are dependent upon the guidelines,etc.

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The guidelines place various commitments relying upon whether you are a ‘merchant’ (which incorporates retailers and wholesalers) or you import items from outside the EU / Germany and makers.

On the off chance that you are a maker in the EU, or you import products into the EU from a third nation, at that point you are considered to be a mindful individual and more prominent obligations will concern you. A maker outside the EU may assign somebody inside the EU as a mindful individual.

Organizations managing in skin lighteners, and certain germicidal cleanser items, ought to be especially cautious as there are loads of illicit variants of these items. Further direction on these is accessible.

Primary lawful prerequisites

Corrective items must follow point by point compositional and naming prerequisites.

You should track where you acquired your beautifying agents from and, in the event that you offer them to different organizations, who you provided them as well. These must be accessible for review for a long time from when you were provided with them or, if material, when you provided them

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Distributors must act with due consideration including guaranteeing items are not obsolete. Specifically, you should watch that beautifying agents are named with;

o The name and address of a responsible person in the EU

o A batch or manufacture reference number

o An ingredients list. This must be headed ‘ingredients’

More than 1,300 substances are precluded from being utilized in corrective items. For instance, chlorine, cyanides, iodine, mercury and mercury mixes, for example, mercuric iodide. Note that skin helping creams contain hydroquinone are likewise illicit.

Any items with Corticosteroid substances like Clobetasol Propionate, Bethamethasone or Bethamethosone Dipropionate must not be at a bargain in corrective shops. Flexibly of such items may likewise be an offense under medications enactment.

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COMPARATIVE CONCLUSION

The guidelines pertaining to the drugs and cosmetics regulations in these three different countries appear to be quite similar but however, there were discrepancies for certain recommendations relating to the labelling, circulation, offender liability, permitted chemicals, etc.

Updates for these guidelines are being worked upon in almost all these countries , although United Kingdom would be framing its own and new set of medicinal guidelines and acts ,it can be said that all these countries are primary contributors in the field of medicine and as of now they all have strong legislations to backbone their Drugs and Cosmetic standards and regulation but there is enough evidence that may lead them to stronger statutes and will enable the future guidelines to become even more concordant. As with the intensive research done and developments being made , a slight moderation of the acts maybe needed.[5]

At the end we can say that these three countries have almost similar provisions for the regulation of drugs within their territory but unlike Germany (EU), U.S.A. may be a step behind as it is majorly functioning on only one statute ,whereas there should be different acts dealing with the different sections of the drugs and cosmetics field. It will in a way improve the efficiency in terms of the proper vigilance that this sector needs.

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Presently, United Kingdom is witnessing its post- BREXIT era and therefore trying to not really comply with the European Union guidelines it is laying down its own provisions. As the Brexit happened in 2019, it would not really be this quick and easy to formulate strong medicinal laws, therefore no comparison can be drawn with regards to U.K. but it is sure that the U.K.  Parliament will soon frame a law which would meet all the perimeters  required for a stronger Medical (Drugs and Cosmetics) regulating sector.

[1] https://www.freyrsolutions.com/blog/uks-new-cosmetic-regulations-in-the-light-of-brexit

[2] https://www.freyrsolutions.com/blog/uks-new-cosmetic-regulations-in-the-light-of-brexit

[3] https://www.fda.gov/cosmetics/cosmetics-laws-regulations/fda-authority-over-cosmetics-how-cosmetics-are-not-fda-approved-are-fda-regulated

[4] The Safety and Regulatory Status of Food, Drug and Cosmetics Colour Additives Exempt from Certification

  1. B. HALLAGAN*, D. C. ALLEN* and J. F. BORZELLECAt

*International Association of Color Manufacturers, 1620 1 Street, NW, Suite 925, Washington, DC 20006, 10 January 1995

[5] APA Koes, Bart W., PhD*; van Tulder, Maurits W., PhD†; Ostelo, Raymond, MSc‡; Kim Burton, A., PhD, DO§; Waddell, Gordon, DSc, MD, FRCS∥ Clinical Guidelines for the Management of Low Back Pain in Primary Care: An International Comparison, Spine: November 15, 2001 – Volume 26 – Issue 22 – p 2504-2513

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Comparative Study of Penal Laws in Australia, U.K. and Canada

By: Ankita Pachouri

Enactment of a particular legal system is designed to deal with from the stage of commencement of crime through its trial and right to its meaningful end, thus criminal laws or penal laws were framed. Penal Laws are the set of laws determining the action as legal or illegal and any behavior that is harmful to any person or society, aims to threaten to cause bodily or mental harm and thus sentencing with appropriate penance.

In Australia, like the British law, a mere intention in criminal attempt is not prescribed. In Australia as with India, when a criminal prosecution is commenced, the burden of proof lies with the prosecutor. The general rule is that the accused person is ‘innocent until proven guilty’. The standard of proof is ‘beyond reasonable doubt’ which is the highest standard in law. The criminal law gathers its roots from English common law, with one state even drawing its laws from 19th century criminal code operating in India. Additionally, the principles of ‘Double Jeopardy’[1] and ‘Right to remain Silent’ are also held as essential.

The States have more control over criminal law as compared to the Federal Government. Criminal Laws govern not only the nature of crimes and the penalties thereof but also the procedures of trial and nature of evidence. There are several legislations that make up the criminal law in each Australian state.  Australia has nine criminal jurisdictions—

  • six state governments,
  • two territory governments
  • the federal government.

Each state has a collection of Acts and regulations establishing criminal offences and regulating the operation of the criminal justice system. The Criminal Code Act, 1995 of the Federal Government is an exhaustive piece of legislation containing 261 divisions.

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Criminal law is primarily divided along ‘Indictable offences’[2] and ‘Summary Offences. The term ‘indictable offences’ represents grave offences, with some states choosing to bifurcate them further into ‘minor indictable’ and ‘major indictable’ while ‘summary offences’ refer to comparatively lighter offences. If the Offender pleads guilty, the court can order a fine or a sentence or suspended sentence or imposing a bond or a home detention or community service or orders of restraining, compensation, forfeiture and so on. The trial starts if the accused pleads not guilty. An indictment is a formal document that the prosecution files with a court to commence a ‘trial on indictment’. This document presents a brief description of the charges faced by an accused. All offences, except summary offences are able to be tried ‘on indictment’. The prosecutor acts on behalf of the Crown and the cases are mentioned as against ‘the Queen’, which is similar to the Indian way where criminal offences are said to be against the entire society and hence mentioned as against ‘The State’.

The Jury which consists of 12 citizens who are chosen from the electoral rolls play an important role in Criminal trials. The judge explains the relevant laws to the jury and it is the job of the jury to derive facts from the evidence presented to them. Crimes committed by people under the age of 18 years are dealt with either by a caution or by the Youth court. Serious crimes by minors are referred to the Supreme Court. Another important facet of the Australian criminal law pertains to Coroner’s Court. The Coroner[3] has the power to enquire into unnatural deaths, accidents, missing persons cases amongst others.

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The historical development of the penal law trace back to the English Reformation and the acts that gave supremacy to the crown which led to the development of the penal laws in United Kingdom. After the British reformation, the penal laws of the United Kingdom passed against the Roman Catholic of England and Ireland penalising their practice and hence imposed civil Penalties on them. During 16th and 17 the century, numerous acts were passed determining the imprisonment, fines in case of participation and also death penalty in case of practice by the Catholic priests in the territories of United Kingdom. Many rights were barred to them, like, right to vote, right to own land, right to teach their ideas, etc. But later all these discriminatory penal laws were removed especially during 1778-93 and other further corrections were made in the penal laws of the United Kingdom. Civil penalties were imposed on the people who developed the sacrament towards the Rome and not towards the king headship. The English Parliament passed the two most important acts, i.e., Clarendon Code[4], the Test Act[5] and the Toleration Act[6].

There is no penal code in the United Kingdom, rather there are three different criminal justice system:

  • Scotland
  • New England
  • Wales

The sources and explanation of the criminal laws are to be found in individual Acts such as:

  • Parliamentary and statutory laws
  • Decisions by judicial bodies, particularly, the Court of Appeal

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The definitions of various offences are found in the respective rule books, like, theft, burglary are defined in the Theft Act,1968. The introduction of new laws has to be done to both the House of Commons and also the House of Lords. Then on being successfully passed it becomes the Acts of the Parliament. Common law is also a major source of criminal law which is framed from the customs and laws people generally follow. The acts like Homicide Act 1957, Murder (abolition of Death Penalty) Act 1965 and the Criminal Justice Act 1991 are the statutes which set out the punishments and defences to them. The adversarial principle provides the logic in determining the nature of the crime and also its operations. After providing the evidence, the court forms a jury, stipendiary, magistrate or a panel of magistrates depending upon the seriousness of the crime. As said above about the adversarial system, it does not expect a person to be innocent or culprit but only whether guilty or not. Mostly crime is proven by the culprits on their own admission of the guilt. The abolition of the Criminal Act of 1967 demolished the difference major and minor crimes and further added the concept of:

  • arrestable crime: crime in which the punishment is fixed by law
  • non arrestable crimes: Crime in which finds no mention under the rule of law.

 

The laws of U.K., like Australian law, classifies offences into three categories for procedural purposes;

  • indictable only: offence requiring a formal document which sets out charges about a person and tried only in the crown court. E.g. kidnaping, robbery, rape, etc.
  • triable-either-way: offence which can be dealt infront of either magistrate’s court or crown court. E.g. theft, assault, etc.
  • Summary: offence whose proceedings are held in the magistrate’s court. E.g. drink and drive, less serious assault, etc.

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The criminal law of Canada finds its genesis in its founding document called as the Constitution Act 1867 which gave sole authority to Canadian parliament to make criminal laws. Section 91 of the Canadian Constitution describes criminal law in federal Parliament as the sole jurisdiction. In the year 1892 the government of Canada passed a law called as the criminal code as it amalgamated crimes and criminal law procedure into a single statue which has witnessed plethora of amendments in the past. The Canadian criminal law has certain fundamentals similar to that of India viz- ‘’presumed innocent until proven guilty’’. The Criminal Code, a wide-ranging Code which contains 28 ‘parts’ which contain offences under various heads including Terrorism, currency and Public Morals is the behemoth governing Canadian criminal justice. There are different statues to govern specifically on a subject matter. The Supreme Court, established under constitutional reform act 2005, is the highest and final court of appeal in the criminal cases from England, Wales and Ireland.

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There are two levels of crime in the system namely,

  • federal level crimes
  • regulatory or provincial offences

The former crimes are more serious in nature and deal with murder, arson, fraud etc. and the latter offences are comparatively of non-serious nature. All the levels however unanimously provide assistance in prosecution and investigation of the federal crimes. Offences which are relatively minor are referred to as ‘Regulatory Offences’. The Australian and British principle of ‘innocent until proven guilty’ is seen here along with the requisite standard of proof being to prove the guilt ‘beyond reasonable doubt’. Canadian criminal law looks at crime from two aspects- intent and action. It is essential to prove both in most of the cases.

The criminal code is comprehensive and elaborate however there are certain subjects which are not covered under the code for which there are separate federal statutes. E.g.-Controlled Drugs and Substances Act are enacted.

Canada displays ‘Supremacy of the Constitution’ and all laws which are inconsistent to the Constitution, be them of civil or criminal nature, are to the extent of the inconsistency, of no effect. The Rule of Retrospective application of criminal laws does not exist. Additionally, the Courts follow precedents laid down in previous rulings to ensure that the rule of law is applied justly across cases. There exists a two-tier federal polity structure with the powers divided between the Federal government and the provincial government. The Parliament was granted powers to legislate Criminal laws including the procedural aspect of it. Similarly, the provinces have authority to legislate their own laws. In case of a dispute between the two, the laws passed by the Parliament shall prevail over those of the State. The appointment of Judiciary at both the Supreme Court and for the Provincial Courts is done at the Federal level.

The federal government of Canada, unlike Australia, has exclusive jurisdiction to enact criminal law and the provinces have the authority to administer it. The provinces have their own regulations, authority and procedure for quasi-criminal offences (regulatory offences)[7]. During administration of criminal law each province has specific powers with regards to appointment of judges for provincial court, hiring prosecutors etc.

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As mentioned above the criminal code not only incorporates conduct which constitutes offences but also procedures to be complied during the process. The preliminary portion of the code consists of offences dealing against property, against person, offences relating to sexual nature etc. Post that the code describes the procedures dealing with the aforesaid offences and the sentencing options. A special Act for offenders who are aged 18 or younger- The Young Offenders Act exists which stated that a child younger than 12 years cannot commit a crime. The Canadian criminal code has in the recent past focused intensively in looking after the needs of the victims and also at alternatives to truly reform the criminal.

 

In the recent past, due to significant shift in the functioning of the society there has been a paradigm shift in the social, economical and technological arenas which consequently resulted in advent of new offences dealing with information technology, banking system, credit card system etc.  requisite amendments have been made routinely to be abreast with the changes.

As with the British and Australian laws, the Canadian criminal jurisprudence considers a crime as an act that is committed against the entire society. The concept of Mens Rea or guilty mind which is a mainstay of the Common law is seen here though not with as much power. The term itself is not defined in the Criminal Code, yet a substantial number of judgments have required that the proof of guilt with the perpetrator be proved.

The countries like Canada, Australia consists of a specific punishment for specific crime whereas in England there is no such specific code. Punishments are decided by the statutes and Parliament from time to time while others are supervised under common law.

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No precise line for distinguishing between non-punishable preparation and punishable attempt has been made in any criminal or penal law system of any country. They say that any behaviour that generates any suspicion or apprehension in the mind of an observer is likely to be punishable in the eyes of law too.

[1] Means an accused cannot be charged for the same offence twice (also “non bis in idem”)

[2] Offences where defendant has a right to trial by jury

[3] Is a public official

[4] Series of Parliamentary Acts aiming at establishing supremacy of Anglican Churches

[5] Religious test for public offices, imposing penalties on Roman Catholics

[6] Freedom of worship to all non-conformists

[7] E.g.: driving with undue care and attention, illegal dumping of waste, etc.

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Joinder/Ms-Joinder/Non-Joinder of Parties In Civil Suits

By: Umme Ruman

Civil suit usually involves private disputes between persons or organisations. A civil case begins when a person or organisation, claims that another person or organisation, has failed to carry out a legal duty owed to them. The aggrieved party may ask the court to tell the other party to fulfil the duty, or make compensation for the harm done, or both. Legal duties include respecting rights established under the Constitution or under any other statute. Civil disputes are dealt under the Civil Procedure Code, 1908.

The parties in a civil suit are classified as Plaintiffs and Defendants. Plaintiff is the aggrieved party who files the civil suit, against the wrongdoer who becomes the defendant. There may be more than one plaintiff or defendant in any suit. Order 1 of Civil Procedure Code, 1908 contains provisions which deal with the parties to a suit.

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JOINDER OF PARTIES TO A CIVIL SUIT

Joinder of parties means to add all persons concerned in a particular dispute to the suit. Parties can be joined at anytime, subjected to the conditions laid down in the Code. Order 1 Rule 1 of the Code states when a person may be joined as plaintiff:

“1. Who may be joined as plaintiffs. — All persons may be joined in one suit as plaintiffs where—

(a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist in such persons, whether jointly, severally or in the alternative; and

(b) if such persons brought separate suits, any common question of law or fact would arise”[1]

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The Code clearly provides that, a party may be joined at any time as a plaintiff provided that they must have right to claim a relief, either rising from the same act(s) or same transaction(s) based on which the suit was filed. When a separate suit is filed by the parties, there should exist a common question of law or fact, for them to be joined as plaintiffs.

The first landmark case which discussed this provision was the case of Haru Bepari and Ors. vs. Roy Kshitish Bhusan Roy Bahadur and Ors.[2], where it was held that, “The conditions which rendered the joinder of several plaintiffs permissible under Order I, Rule 1. C. P. C. do not necessarily imply that there can be only one cause of action in the suit in which the several plaintiffs join”.

This view was accepted by many other judgments that followed this case. It is key to note the decision given by the Bombay High Court in the case of Paikanna Vithoba Mamidwar and Anr. vs. Laxminarayan Sukhdeo Dalya and Anr.[3], where the Court decreed that, “It is not, therefore, necessary any more that there must be identity of interest or identity of causes of action. What is necessary is the involvement of common question of law or fact.”

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Similar provision was provided to the defendants within the Code prescribed in Order 1 Rule 3, which states that:

“3. Who may be joined as defendants. — All persons may be joined in one suit as defendants where—

(a) any right to relief in respect of, or arising out of, the same act or transaction or series of acts or transactions is alleged to exist against such persons, whether jointly, severally or in the alternative; and

(b) if separate suits were brought against such persons, any common question of law or fact would arise.”

Thus, the condition for joinder of defendant is the same as the conditions laid down for the joinder plaintiffs. This was provision explained by the Supreme Court in Bachu Bhai Patel vs. Harihar Behera & Anr.[4], where it seen that: “This Rule requires all persons to be joined as defendants in a suit against whom any right to relief exists provided that such right is based on the same act or transaction or series of acts or transactions against those persons whether jointly, severally or in the alternative. The additional factor is that if separate suits were brought against such persons, common questions of law or fact would arise. The purpose of the Rule is to avoid multiplicity of suits.”

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It was further observed in this case that when Order 1 Rule 3 and Order 2 Rule 3 are read together, it signifies that the question of joinder of parties also includes the joinder of causes of action. The basic principle is that when causes of action are joined, the parties are also joined, since the cause of action is raised against the party. Order 2 Rule 3 states:

“3. Joinder of causes of action.—(1) Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit.

(2) Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit.”

Thus, in cases where parties are involved in the same transaction or where they are moving for the same cause of action, they can be joined within the same suit, either as plaintiffs or defendants. However, this action depends on the discretion of the Court.

MISJOINDER OF PARTIES TO A CIVIL SUIT

According to the Merriam- Webster Dictionary, misjoinder means, “an improper union of parties or of causes of action in a single legal proceeding.” Thus, when those parties who have no relevant connection to the suit or when those causes of action are pleaded which bear no correlation with the facts of the case are joined, it becomes misjoinder of parties or causes of action.

When two or more persons are joined as plaintiffs or defendants in a particular suit in breach of order 1, Rules 1 or 3 respectively and they are neither necessary nor are proper parties, it is a case of misjoinder of parties. Additionally, when persons having different causes of action file a suit together, it would also be considered as misjoinder of parties.

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Where in a suit there are more than two defendants and more than two causes of action, the suit will be deemed as bad for misjoinder of defendants and cause of action, when different causes of action are combined against various defendants separately. Such a misjoinder is technically known as multifariousness.

The objection to the misjoinder of parties should be raised at the earliest stage possible. If the parties fail to do so, they are considered to have waived this right. The decision whether or not there is misjoinder of parties has to be made in consideration of the averments made in the plaint and both the written statement and the evidence led by the parties should not be taken into consideration for the purpose.

However, as serious misjoinder of parties seems to be, it is not as important. Order 1 Rule 9 states that no suit is liable to be dismissed by reason of misjoinder of parties. It is deemed to be a mere irregularity which is covered by sections 99 and 99-A of the Code. Section 99 of the Code states that:

“99. No decree to be reversed or modified for error or irregularity not affecting merits or jurisdiction.—No decree shall be reversed or substantially varied, nor shall any case be remanded, in appeal on account of any misjoinder [or non-joinder] of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court.”

Under Order 1 Rule 10, when there seems to be misjoinder of parties, the name of the improperly joined plaintiff or the defendant may be struck-out and the case may be proceeded as usual.

In Ramdhan Puri v. Chaudhury Lachmi Narain[5], it has been held that parties and causes of action, when once joined in the suit, there is no absolute right to have them struck out but it is discretionary with the Court to do so it thinks right. The mere fact of misjoinder is not by itself sufficient to entitle the defendant to have the proceedings set aside or action dismissed.

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The Privy Council in Muhammad Hussain Khan v. Kishva Nandan Sahai[6], held that the rule embodied in Section 99 of Civil P. C. proceeds upon a sound principle and is calculated to promote justice, it can be applied.

In Assembly of God Church v. Ivan Kapper and Anr.[7], the learned judge has held that a defect of misjoinder of parties and causes of action is a defect that can be waived and it is not such a one as to lead to the rejection of the plaint under Order VII Rule 11(d) of the Code.

NONJOINDER OF PARTIES TO A CIVIL SUIT

When a necessary party to the suit has not been joined to the suit, it is deemed to be a case of non-joinder. It is a situation where certain persons are missing from the suit without whom no effective conclusion can be reached in the case. The non-joinder of parties can be classified as, nonjoinder of necessary parties and, nonjoinder of persons who make the court’s job convenient, that is necessary parties and proper parties respectively.

Nonjoinder of parties cannot be deemed as a ground for dismissing a suit, as any party missing from the suit can be later joined according to Order 1 Rule 1 or 3, as per the discretion of the court. The absence of necessary parties means those parties from whom the cause of action against are not included in the proceedings, due to which the court cannot decree effectively. In such situations, the court may dismiss the suit but it is not necessary.

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Order 1 Rule 9 states that no suit shall be dismissed in case nonjoinder:

“9. Misjoinder and nonjoinder. —No suit shall be defeated by reason of the misjoinder or nonjoinder of parties, and the Court may in every suit deal with the matter in controversy so far as regards the rights and interests of the parties actually before it:

[Provided that nothing in this rule shall apply to non-joinder of a necessary party.]”

Thus, where the non-joined party is merely a proper party and not necessary, the suit is not eligible to be dismissed, however where the party in question is absolutely necessary to ensure that justice is delivered effectively, such a case may be dismissed according to the discretion of the court.

The plea of non-joinder, however, should be raised at the earliest possible stage. Where such a plea is raised by the defendant at the earliest stage, and the plaintiff refuses to include the missing party, he cannot later on file to amend his mistake.

In the case of Mohan Raj v. Surendra Kumar Taparia and Ors.[8], the Supreme Court stated that, “No doubt the power of amendment is preserved to the Court and Order 1, Rule 10 enables the Court to strike out parties but the Court cannot use Order 6, Rule 17 or Order 1, Rule 10 to avoid the consequences of non-joinder for which a special provision is to be found in the Act. The Court can order an amendment and even strike out a party who is not necessary. But when the Act makes a person a necessary party and provides that the petition shall be dismissed if such a party is not joined, the power of amendment or to strike out parties cannot be used at all. The Civil Procedure Code applied subject to the provisions of the Representation of the People Act and any rules made thereunder. When the Act enjoins the penalty of dismissal of the petition for non-joinder of a party the provisions of the Civil Procedure Code cannot be used as curative means to save the Petition.”

In Narendra Singh v. Oriental Fire and General Insurance Co. Ltd.[9], the benefit of Section 39 of the Motor Vehicles Act was extended to the plaintiff where the suit was found bad from a non-joinder of parties. Consequently, non-joinder should not be interpreted too freely; otherwise the parties shall stand to lose. If a partnership firm against another firm files a suit, all the partners have to be impleaded as plaintiffs but not their legal representatives.

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Subsequently, in Brij Kishore Sharma v. Ram Singh[10], the Supreme Court, reversing the decision of the trial court, held that the suit is not maintainable. During the pendency of the suit, one of the parties died and his legal representatives were neither notified now were added to the suit. In the opinion of the court, the legal representatives should have been brought on record.

Thus, provided the parties not necessary to the suit, the suit cannot be dismissed merely on the basis of nonjoinder of parties.

[1] Legislative.gov.in. 2020. [online] Available at: <http://legislative.gov.in/sites/default/files/A1908-05.pdf>

[2] AIR 1935 Cal 573

[3] AIR1979Bom298

[4] AIR 1999 SC 1341

[5] AIR 1937 PC 42

[6] AIR 1937 PC 233

[7] 2004(4)CHN360

[8] AIR 1969 SC 677

[9] AIR 1987 Raj 77

[10] 1996VIIIAD(SC)562

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Employment Contracts

By: Arundathi Mandyam 

In India, there is not much light thrown on the agreements which bind the Employer-Employee relationship. There have always been issues regarding the relationship between the Employer and the Employee, to which resolve is found only through legal discussions. The laws hold within themselves various areas in their scope which not only discusses the contractual relation of an Employer and his Employee but also other various clauses. In this article we will discuss all the contracts an employer and employee are bound by and the various other clauses that are covered under.

Contract as defined in the Indian Contract Act, 1872 is a contract of employment for the exchange of remuneration for a period of time. Employment contract is a form of contract recognized by court as the social relationship of the employer and employee as opposed to other contracts.

Like any other contract in India, Employment contract too contains Offer, Acceptance, Consideration, Competent Parties, Legal Object and Free Consent as the essentials of the contract.

As the complexities increase in the field of employment, the various matters such as breach of fiduciary responsibilities, corporate law non-compliance, corporate defamation took distinction between White Collar jobs (deals with the administration and board) and the Blue Collar Jobs (which deal with the manual labor.)

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The employment related issues can be grouped as under,

  1. Pre-Hire
  2. During Employment
  • Termination
  1. Post- Termination
  • PRE-HIRE

As the title suggests, any dispute which arises before the hiring of the employee amounts to Pre-Hire disputes between the Employer and the Employee. This kind of disputes arises when an employee falsely represents himself and fraudulently tries to win a position in the employment. When the employer learns about the fraud of the employee he loses trust and there will not be a friendly relation between the employer and the employee hence giving rise to dispute. This dispute can only be resolved through litigation and not through any other medium.

From the employer’s end the dispute arises when the employer takes back the notice of offer from the employee before the employer starts his employment.

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  • DURING EMPLOYMENT

The dispute arising out of the misconduct of the employee or dissatisfactory performance in the employment is the dispute during the employment. These disputes are classified under two heads, they are:  (a) Employment Related Disputes and (b) Disputes Relating to Restrictive Covenants during Employment.

Employment related Disputes cover under them the misconduct of the employees, disciplinary actions of the employees to guard the interest of the organization, under performance, breach of terms, insider trading, and criminal indulgence and so on.

Restrictive Covenants during Employment which are non-compete result dispute between the employer and employee whereas Restrictive Covenants during Employment which are non-disclosure do not.

  • TERMINATION

Basically there are two types of Termination- Voluntary Termination and Involuntary Termination.

There are lesser chances of disputes when in case of termination (in the form of resignation or retirement) by the employee. Dispute arises when an employer involuntarily terminates the contract of employment with the employee on the basis of the misconduct or indiscipline of the employee. In such cases, the matters shall be resolved in the courts and the burden of proof to prove the misconduct of the employee and evidence for his termination of the employee lies on the employer.

  • POST-TERMINATION

Modern day employment contracts give place to restrictive covenants restraining employees from joining new employment even after the termination of the previous employment. This gives rise to the dispute between the employer and the employee post the termination.

These disputes too shall resort in the courts and nowhere else.

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STATUS OF RESTRICTIVE COVENANTS IN INDIA

In India, the employment contract of restrictive covenants which is operative post the termination of the employee is unenforceable and void. It is against the public policy since it is prohibited by the law of the Indian Courts.

In Pepsi food Ltd and Ors Vs. Bharat Coca-Cola Holdings Pvt. Ltd and Ors[1] (1991) it has been held that, “post termination restraint on an employee is in violation of Section 27 of the Indian Contract Act, 1872. A contract containing such a clause is unenforceable, void and against public policy and since it is prohibited by law it cannot be allowed by the Courts injunction. If such injunction was to be granted, it would directly curtail the freedom of employees for improving their future prospects by changing their employment and such a right cannot be restricted by an injunction. It would almost be a situation of “economic terrorism creating a situation alike to that of bonded labor”.

POSSIBLE WAYS TO ENFORCE RESTRICTIVE COVENANTS[2]

  1. Serving the employee with a legal notice.
  2. Seeking enforcement of undertaking or encashment of cheque based on clauses of the agreement.
  3. Initiating civil suit seeking injunction or specific performance of contract as well as damages.
  4. While damages are a remedy that an employer may seek for the breach of confidential agreements, the same requires trial and evidence. Therefore the employer would only require injunction under the Civil Procedure Code, 1908 at the interim stage or initial if they apprehend that premature departure of an employee could cause injury to the employer.
  5. Filing suit for declaration that the acts of the employee amount to tortious interference in the business of the employer and injunction therefrom.

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MISCELENEOUS

MINIMUM REQUIREMENTS

Employment Contracts in India are generally considered to be of unlimited term contracts, I.e. the Contracts that are valid until the termination or superannuation unless specifically specified as a fixed term contract. While Labour legislations do not need agreements in writing it is a predominant market practice to have all terms and conditions of the employment agreed and signed by both the employer and the employee.

FIXED TERM CONTRACTS

Until recently government of India, Had not given a go to all the sectors of the government to make permanent employees. Only the apparel manufacturing sector had the advantage of making their employees permanent workers.

TRIAL PERIODS

It is permitted by Indian law to place new employees on a trial or probation period. The Industrial Employment Standing Order envisages a 3 month to 6 month probation period which is also followed by other sectors which do not fall under the IESO Act. This Probation works best in the Industrial and Technology oriented sectors in India.

NOTICE PERIODS

In terms of labor legislation in India, “workmen” who have undertaken the least of 1 year of employment of continuous service are entitled to a notice period of 1 month or equivalent wages in lieu thereof. In addition, the employer is required to pay retrenchment compensation to the workmen. However no retrenchment or notice period is required if the employee is being dismissed for misconduct from the employee end.

CONCLUSION

The concept of Employment contract is like any other Contract. The Comprehensive Employment contract provides for the key duties and responsibilities of the employee that help him understand his job better. The main objective of an Employee Contract is to prevent disclosure of information, non-solicitation, non-competition, as well as protection of confidential information so it is always advisable to have an executed written form of Employment Contract. In practice, the employer signs the letter of appointment with the proposed employee prior entering into the contract. An appointment letter is executed in order to cover the probation period of the said employee till that employee is made permanent in the employment.

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[1] Suneeth Katharki and Mini Kapoor, India: Employment contracts- Enforcement of Restrictive Covenants under Various Jurisdictions, INDUS LAW (April 26,2016) https://www.mondaq.com/india/employee-rights-labour-relations/486496/employment-contracts–enforcement-of-restrictive-covenants-under-various-jurisdictions#:~:text=In%20India%2C%20an%20employment%20contract%20containing%20restrictive%20covenants,it%20cannot%20be%20allowed%20by%20the%20Indian%20courts.

[2] Archita Mohapatra, Preetha Soman, Ajay Singh Solanki and Vikram Shroff, Employment Contracts in India- Enforceability of Restrictive Covenants, Pg.No 14 (2019)

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Trademark and Competition Law

By: Ishika Gautam

COMPETITION LAW
The Indian Government in pursuit of increasing the economic efficiency of our country acknowledged the Liberalization, Privatization, and globalization era by liberalizing the country’s economy and reducing governmental control. Currently, the Indian economy is facing aggressive competition in every field. Fair competition has proven to be an effective mechanism which enhances the efficiency of the economy. Therefore the primary purpose of implementing the competition law was to control monopolies and encourage competition.
The objective behind the formulation of competition law, Intellectual property laws is to protect the research and development inventions which are carried out by the inventor firm from being used by other companies producing the same kind of products and making a profit from the same. Therefore, on the one hand, IP laws work towards creating monopolistic rights, whereas, on the other hand, competition law battles with it. From this, there seems to be a clash between the objectives of both these laws.
The competition laws involve the formulation of policies that promote competition in the local markets and aim to prevent anti-competitive business practices and unwanted interference of Government. The competition law seeks to eliminate monopolization of the production process so that new firms can enter the market. The maximization of consumer welfare and increased production value are a few primary objectives of competition law. On the other hand, IP Laws are monopolistic legal rights granted to owners resulting from human intellectual creativity.

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Case law-
Arun Chopra v. Kaka-Ka Dhaba Pvt. Ltd. and Ors.
The famous restaurant named Kake Da Hotel has now attained it’s secured rights in its name and trademarks against another Nashik-based food outlets namely ‘Kaka-ka Dhaba’, ‘Kaka-Ka Restaurant ‘Kaka-Ka Garden’. The Court has observed that even though there isn’t a doubt that the user is long and extensive. The question arises whether the word ‘Kaka’ or ‘Kake’ can be a monopoly of any party and could be adjudicated on trial. Till now, the interim order is granted in favour of the plaintiff and the defendants are prohibited from using words ‘Kaka-ka’ with any new outlet during the period, it has allowed that the defendants can continue to use the names Kaka-ka Dhaba’, ‘Kaka-Ka Restaurant’ and ‘Kaka-Ka Garden’.

Under the Competition law of IPR, the market’s unavailability can establish some dominance in markets. Similarly, the comparison of market shares between a dominant firm and its competitors is advantageous in determining the power and monopoly. It seems complicated to decide on the minimum percentage of market share that could attain dominance or monopoly of a particular firm in the market. Various judgments dominance cannot establish a minimum rate that points to the firm’s authority.

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The anti-competition laws to tackle the monopolies of IPR often include two measures: compulsory licensing and parallel imports. The compulsory license is when the state has authorized an IPR holder to surrender their exclusive rights over intellectual property, under article 31 of Trade-Related aspects of Intellectual Property Rights. The compulsory licenses are granted only under specific circumstance such as the interest of public health, in national emergencies, in nil or inadequate exploitation of any patent in any country, and also for the overall national interest. On the other hand, Parallel imports include all goods brought in the country without authorization of an appropriate IP holder and are placed legitimately into the market.

In addition to all these provisions, provisions like Section 3 of the new Competition Act, 2002, deals with more anti-competitive agreements that cannot be used by the IPR holders as they conflict with competition policies. Firstly, the patent pooling is a restrictive practice where the firms of particular manufacturing industry decide, to pool their patents and then agree to not grant the licenses to third parties, then simultaneously fix quotas and prices. Secondly, one more clause that restricts the competition concerning research and development or prohibits a licensee from using other rival technology is considered to be anti-competitive under this law. Thirdly, the licensor under this law is not permitted to fix the price at which the licensee would sell his goods.

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The above examples are not exhaustive, but a few examples demonstrate the anti-competitive provisions applicable to the IPR under this Act. Moreover, under Section 27 of this Act, India’s Competition Commission had the authority to penalize the IPR holders who abuse their dominant position. Furthermore, under Section 4 of this Act, the Commission is authorized to punish the parties of an anti-competitive agreement, it is in the contradiction of this section.

TRADEMARK LAW
Search
To search for a mark before filling the application is the most fundamental part of applying for a trademark. Even though it is not a procedural pre-requisite for the application, it finds its utmost importance in the fact that acceptance of a mark for registration as a trade mark relies on the vividness of the mark. It is a crucial step to carry a detailed search in the Trade Marks Registry, to check for the mark’s uniqueness and deduct all possibilities of duplication. It also needs to be checked that the proposed mark is not the same or even similar to any other existing mark registered or pending for registration. A detailed prior search is also a proof of honesty and good faith in accepting the mark, during opposition and the infringement proceedings.

Classification
The application for the trademark needs to be specified by the appropriate class or classes of the goods or services, concerning which the application is filed. The applicant for trademark needs to be extremely careful in ascertaining the type of goods or services in their application as the tester needs to be convinced about the proper use of goods and services from a particular class or across all classes to the application, and a broad declaration can also prolong the process of the examination.

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Selection
The selection of a mark is an important part of any application. The mark selected needs to meet the qualifications that are enlisted in the Trade Mark Act, and it has to fall within the parameters of its presence as a device, brand, a heading, label, a ticket, name, signature, word, letter, a numeral, shape of goods, packaging or any combination of colours, or any combination of these distinct elements that are capable of being ‘graphically represented’ and indicates a trade connection with the proprietor. Now, it essentially needs to have a proper distinctive character capable of constructively distinguishing all the applicant’s goods and services from others. The denial of the presence of uniqueness of the mark may result in the refusal of the application.

Filing of Application
The application for the mark can be filed by a person or his respective IP Lawyer or any other person who is authorized in this respect at the designated Head office (at Mumbai) or any branch offices (at Ahmedabad, Chennai, Delhi, Kolkata) of Registry by a delivery at the front office either personally or by post, it can also be submitted electronically through the gateway being provided at ipindia.nic.in. The application for this has to be generally filed at the office which is within the territorial jurisdiction of the principal place of business of that applicant in India is situated. There are many applications which need to be filed directly at Head Office.
Special care needs to be taken of the fees, and as non-payment results in regarding the application as not-filed.

Numbering and Examination of Application
On receipt of the application, it is appropriately dated and numbered. A copy of it is returned to the applicant/attorney—a number assigned to the mark, which is the registration number post-registration. The proprietor is only allowed to use the trademark symbol after their application has been completed and numbered. The application is adequately examined for accuracy of the class in which the mark has been filed, all the necessary documents that need to be attached depending on the type of application- registration of the mark for goods or services being included in one class/different classes/with priority claim etc., details of the applicant and the proprietor.

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Hearing
After the proper completion of the examination, the Trademarks Registry sends an “Official Examination Report” to that applicant. The applicant may sometimes be required to reply to the objections raised by the Examiner under Section 9 and Section 11 of Trade Marks Act and the clarifications regarding the content of the application. The reply being insufficient to satisfy the Examiner, the applicant is then granted a hearing to overcome his objections.

Publication in the Trade Mark Journal
The mark’s application is then published in the “Trade Marks Journal,” after a proper post-examination hearing with the applicant. The journal is also published by the Trademarks Registry and is a publication by the Government of India. The application is then granted registration if it stands being unopposed after the proper publication in the journal for a stipulated period of four months.
If the publication is challenged in any case, then the opposition proceedings commence, and the registration is granted freely only if the proceedings conclude in favour of the applicant.

Opposition Proceedings
Anyone can file a notice of opposition against any application published in the journal, within that period of four months from the date of that mark being published in the journal. Any supporting evidence can accompany the notice for the opposition.
An application can then be opposed to the primary grounds that are provided in the Trade Mark Act. This is the Registrar’s task to serve a copy of the opposition to the applicant, inside two months of receipt of resistance. The applicant must then reply within two months; failure to do so will result in the applicant’s application being treated as abandoned. The counter-statement is given to the opponent, and usually, the parties are being heard along with the consideration of proper evidence provided by both parties.
The Registrar is given the authority to decide the acceptance of trademark application based on the hearing’s judgment. The aggrieved party is given the right to challenge the ruling by filing an appeal in front of the Intellectual Property Appellate Board.

Registration
The mark’s application is registered if it has been accepted and not opposed, or opposed but has been decided in favour of the applicant. The applicant is also issued the Certificate of Registration and is further allowed to use the symbol R and the registered trademark. The registered trademark given is valid for the next ten years from the date of that application is received for the mark.

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Renewal
A registered trademark can be renewed after every ten years for an unlimited period on payment of that particular renewal fee. The renewal request should ideally be filed in the Trade Marks Registry within only six months before the expiry of the trademark. The application can also be filed up to six months after the trademark expiry, with the payment of the late renewal fees being prescribed.

Litigation
1) To obtain John Doe Orders and ex parte injunctions.
2) To accept search and seizure orders.
3) To conduct market raids.
4) To check for the accounts of the infringer.
5) To medicate for amicable settlement of disputes.
6) Do Arbitration and also Conciliation.

Enforcement through constructions
The Customs Act of 1962, enables Commissioner of Customs, on behalf of Central Government, prohibits importing the goods on absolute or conditional terms, used for the protection of patents, trademarks, and copyrights. In contrast to this, the authorities came up with Intellectual Property Rights (Imported Goods) Enforcement Rules in 2007 which correctly specifies the process of protection of these intellectual property rights (Copyright, Trade Mark, Patent, Design and Geographical Indication) from getting violated in the course of these import into the country.

Licensing of Trademarks
The trademark’s license is an agreement between a registered proprietor of the trademark (licenser) and another person (licensee), giving authority to the licensee to use the trademark in the course of trade, against a particular payment of royalty to the licenser. The word here used “license” is not mentioned anywhere in the Trade Marks Act, 1999. The Act says about the words “registered user” and “permitted use.”

Revocation of Trade Mark
An application for the cancellation or rectification of a trademark registration can be made only by the aggrieved person. Such type of application must be filed with Registrar of Trade Marks or the Appellate Board.
Some of the grounds on which the registration can be removed or cancelled:
The trademark being registered was done without any bona fide intention, and there was no bona fide use of the trademark for the time up to date of three months before the date of the application for removal.
Three months before the application for removal, a regular period of five years from the date on which the trademark has entered on the register or longer has elapsed during which brand was registered and in which no bona fide use.
Trademark was registered without any sufficient cause.

 

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E-Commerce Contracts and the clauses covered under it

By: Alok Rao

Introduction: –
E-commerce is a form of business model, or segments of a larger business model, enabling a company or person to conduct business on an electronic network, typically the Internet. However, there is no specific meaning of the term e-commerce, which is usually used to denote a form of doing business by electronic means rather than by conventional physical means. E-commerce questioned companies’ traditional system trading with customers, putting together diverse business models that empowered consumers.

The most popular business models facilitated by e-commerce are:

  1. B2B: Business to Business (B2B) explains trade transactions between different companies, allowing foreign companies to develop new partnerships with other companies. As between the manufacturer and the wholesaler, or between the wholesaler and the retailer.
  2. B2C: Business to Consumer (B2C) defines companies’ operations providing end customers with goods and/or services. There has always been a direct interaction between companies and customers, but with e-commerce, the traction has been gained in such transactions.
  3. C2C: Business to Consumer (C2C) includes electronically facilitated transactions between consumers through third parties. Traditionally, customers have had interactions with other consumers, but only a handful of these practises have been of a commercial sort.
  4. C2B: Customer to Business (C2B) involves customers supplying goods/services to businesses and generating value for the company.
  5. B2B2C: This is an alternative to the B2C model, and there is an external intermediary sector in this form of the model to assist the first business transaction with the end customer. For example, Flipkart is one of the popular e-commerce portals and offers a stage for customers to buy a wide variety of items, such as books, music, CDs, etc.

As a result, the e-commerce world may appear uncomplicated and economical; there are several legal considerations that an e-commerce company must seriously consider and bear in mind before beginning and while carrying out its operations.

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E-commerce law in India: –

Information Technology Act, 2000
The first ever e-commerce legislation passed by India’s Government was the Information Technology (IT) Act 2000. It was an act to give effect to the UNCITRAL Model Law on Electronic Commerce, 1996. On 30 January 1997, the General Assembly of the United Nations adopted a resolution commending the Model Law on Electronic Commerce for favourable consideration by the Member States as a Model Law as they pass or amend their rules, given the need for uniformity of the law applicable to alternatives to paper-based methods of communication and storage of information.

The IT Act’s primary purpose was to include legal recognition of transactions carried out through electronic data exchange and other electronic means of communication, generally referred to as electronic commerce (e-commerce). The IT Act 2000 facilitates e-commerce and e-government in the region. It includes guidelines on the legal recognition of electronic records and digital signatures rules for the allocation of e-records, the process and manner of reception, the time and place of dispatch and the receipt of electronic documents. The Act also sets out a legal system which sets out penalties for various cyber offences and crimes. Significantly, under the Act, the Certification Authority is the focal point around which this Act revolves, as most of the provisions relate to the Regulation of Certification Authorities, i.e., the appointment of a CA Controller, the licensing of CAs and the recognition of international CAs. It has also punished crimes such as hacking, damage to the source code of the machine, publication of information that is obscene in electronic form, violation of confidentiality and privacy, and fraudulent granting and use of digital signatures. It also provides civil liability, i.e., cyber contraventions and criminal infringements, fines, the establishment of the Adjudicating Authority and the Cyber Regulatory Appeal Tribunals.

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The relevant provisions of the Indian Panel Code, 1860, the Indian Evidence Act, 1872, the Banker’s Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934 were also amended to resolve the related issues.

Information Technology (Amendment) Act, 2008
India incorporated the Information Technology (Amendment) Act, 2008 to apply the UNCITRAL Model Law on Electronic Signatures, 2001 in India. The IT Act of 2000 was modified to make it technologically neutral and accepted electronic signatures over-restrictive digital signatures. The Act incorporated several amendments, such as implementing the principle of e-signature, the modification of the definition of intermediary, etc. Also, the State asserted unique powers to monitor websites in order, on the one hand, to protect the privacy and, on the other hand, to control potential misuse leading to tax evasion. It is important to note that this Act acknowledged the legal validity and enforceability of digital signatures and electronic records for the first time in India and concentrated on protected digital signatures and secure electronic documents. These reforms were implemented to reduce the occurrence of electronic forgeries and promote e-commerce transactions.

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Legal Validity of Electronic Transactions in India: –
There are numerous legal concerns related to the formation and legality of electronic transactions, such as online contracts and compliance issues, which are dealt with below.
Formation of an E-Contract
The most popular types of e-contracts are clickwrap, search wrap and shrink wrap contracts. The terms and conditions of such agreements shall be made available to the contracting party in a manner which is substantially different from the standard paper contracts. By clicking on the wrap contract, the party’s affirmative approval is made by checking the ‘I agree’ tab with a scroll box that allows the acceptance party to access the terms and conditions.
In the case of a browser wrap arrangement, the website’s mere use (or browsing) makes the terms binding on the contracting party.
In a Shrink-wrap agreement, the contracting party can read the terms and conditions only after opening the box inside which the product (usually a licence) is packed. Such contracts are important in the context of e-commerce, primarily because of the form of products associated with shrink-wrap agreements.

Online Contract Validity
The Indian Contract Act, 1872, regulates all e-contracts in India, inter alia, mandate specific pre-requisites for a valid contract, such as free consent and legal consideration. The concern to be considered is how the Indian Contract Act’s specifications can be met with e-contracts. Also, the Information Technology Act, 2000 (‘IT Act’) enhances the legitimacy of e-contracts.
According to the Indian Contract Act, 1872, some of the essential specifications of a legal contract are as follows:

  • The agreement should be entered into with the free consent of the parties.
  • The agreement should be considered lawfully.
  • The parties should have the authority to enter into contracts.
  • The purpose of the contract is to be lawful.
  • Terms and conditions associated with the e-commerce platform are of the utmost importance in ensuring that the e-commerce agreement meets a legal contract’s specifications.

Unless expressly forbidden, clickwrap agreements would be enforceable and legal if the provisions of a valid contract set out in the Indian Contract Act of 1872 were met.

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There is no provision under the Indian Contract Act that written contracts be physically signed. However, the unique statuses do include the criteria for signature. Furthermore, the very essence of e-commerce is that it is virtually impossible to verify the age of someone who is trading online and who presents problems and liabilities to e-commerce platforms because the situation under Indian law is that a minor is not qualified to enter into a contract and that such an agreement is not enforceable against a minor.
In India, any instrument under which rights are produced or transferred must be stamped. The stamping of the instrument also depends on relevant stamp duty legislation passed by different states in India.

Standard Type of Online Contracts is not appropriate.
There is no well-developed case law in India as to whether the traditional type of online agreements is unwise. However, Indian courts have previously dealt with cases where contract terms, including common form contracts, have been negotiated between parties in unequal negotiating positions. Specific provisions of the Contract Act deal with unenforceable agreements, such as when public policy is opposed to considering the contract or subject-matter of the contract. The agreement itself cannot be valid in such situations.
The courts may place the individual’s responsibility in the leading position to show that the contract was not caused by undue influence.
In the case of ‘LIC India Vs. Consumer Education & Research Centre’
L.I.C. Of India & Anr vs Consumer Education & Research Centre & Ors. Etc. 1995 SCC (5) 482, the Hon’ble Apex Court of India interpreted the insurance policy issued by India’s Life Insurance Corporation by adding certain public interest elements. The court observed that ” in dotted line contracts there would be no occasion for the weaker party to bargain as to assume to have equal bargaining power. He has either to accept or leave the service or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forgo the service forever.”

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It is essential to provide well-thought-out terms that shape online contracts to ensure that there is an ample opportunity for consumers to familiarise themselves with the terms of such agreements. In addition to the above, there is also a range of other legal, tax and regulatory concerns, in particular Security Issues, Consumer Protection Issues, Intellectual Property Issues, Content Control, Intermediate Liability, Jurisdictional Issues and Tax Issues, which need to be taken into account when dealing with e-commerce transactions.

Conclusion: –
Rapid growth in e-commerce has generated the need for vibrant and efficient regulatory frameworks to reinforce the legal framework crucial to the success of e-commerce in India. It has always been argued that poor cybersecurity laws in India and the lack of a proper regulatory system for e-commerce are why both Indians and the e-commerce industry face so many challenges in enjoying a consumer-friendly and business-friendly e-commerce climate in India. India does not have any dedicated e-commerce regulatory legislation other than the IT Act that governs India’s e-commerce and transactions. Therefore, the government should create a legal structure for e-commerce so that domestic and foreign trade in India will flourish so that fundamental rights such as privacy, intellectual property, the prevention of fraud, consumer protection, and so on are taken care of. The legal community in India needs the required expertise to direct entrepreneurs, customers, and even courts. The rapidly evolving market module can comply with existing legislation usually applicable to business transactions in standard modules. Simultaneously, it should ensure that the benefits of technology are unhindered by the judicious evolution of law by the learned interpretation of the court, and there is still a consensus that specialized law governing and controlling some aspects of e-commerce is an obligation and an exclusive requirement.

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Are the existing Maritime Laws in India sufficient enough to safeguard Maritime Security?

By: Kunjan Makwana

Introduction

India can be deemed to be regarded as a maritime state which has a long coastline that is 7500 kilometres long. Since India is a maritime nation, it has 274 islands that are surrounding the Indian territory in close consonance to the Bay of Bengal and the Arabian Sea, which can also be deemed to be regarded as the top most point of the Indian Ocean. The Indian subcontinent is spread across a massive area comprising 1000 kilometres venturing into the northern part of the Indian Ocean in the form of a wedge and this part can be said to have two distinct subregions.

Mr. K.M. Panikkar once opined that, “It is the geographical position of India that brings about the multitude of changes in the character of the Indian Ocean.”[1]  It is highly imperative to understand that the Indian Ocean plays a very significant role when it comes to the sovereignty of India and it is worthy to note that whenever India has neglected the Indian Ocean, it has had a tough time dealing with its sovereignty and this was quite evident even during the time when the European Powers had a standing in India. The Indian Ocean can be deemed to be regarded as a crucial water body for India as it has enabled India to carry out foreign trade activities and there exists innumerable evidence to support the fact that India has majorly relied upon the Indian Ocean when it came to trading and these evidences can be traced way back to the 9th Century BCE.[2]  In fact, Maritime Trade still plays a significant role in contributing to the economy of India despite there being innumerable geographical shifts when it comes to dealing with India’s patterns of trading with other countries via the sea route. However, it is quite pertinent to consider that a huge number of these commodities that India imports, enter the Indian Territory via sea route and therefore it is quite pertinent for India to take extreme measures when it comes to developing its maritime security as in the coming years it is ought to play a very prominent role which would enable India to develop itself globally. It can be said that the maritime laws in India are their nascent stage and the legislation needs to work towards making maritime laws in India much more comprehensive and robust.

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It is imperative to note that the Government is taking initiatives when it comes to developing the maritime regime in India. Certain initiatives by the Prime Minister, like the Prime Minister’s vision with regards to the Security and the Growth for All in the Region (SAGAR) along with a clear emphasis on the advancements made in maritime infrastructure is something which has received tremendous accolades and these initiatives have thoroughly enabled India to achieve greater milestones when it comes to developing its Maritime infrastructure which needs to be focused upon if India wishes to emerge as an all-round winner in its immediate neighbourhood. India needs to primarily focus on the issues and security concerns that are hovering in the Indian Ocean region, (hereinafter referred to as, “IOR”). It should be India’s primary concern to focus upon its maritime security framework because the current pieces of legislation governing the Maritime Laws regime in India are sadly not robust enough. India needs to bolster its resources when it comes to developing its maritime security in the IOR.

India’s Maritime Interest

In order to understand India’s maritime interests, it is imperative to primarily understand whether the maritime security in India is in place or not. First, it is quite necessary to understand what is meant by maritime interests. Maritime Interests can be deemed to be regarded as those interests which take under its ambit crucial aspects pertaining to a country’s ability to claim its maritime realm, which is extremely imperative when it comes to a country’s survival and development. It is highly recommended that a country takes measures and fosters its resources in order to preserve these interests as these interests could be deemed to be regarded as key interests of a country and they play a major role in securing the national security of any country. India, primarily undertakes its business activities via the sea route and therefore it is extremely necessary for a country like India to closely delve into making military and nationalistic strategies when it comes to its maritime interests.

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Maritime Territory

India is deemed to have a large coastline which extends to 7517 Kilometres and takes under its umbrella, 1200 islands. A lot of these islands can be said to be extremely distant from the main coastline of India, for instance, the Andaman & Nicobar Islands can be deemed to be regarded as those islands which are approximately 1600 Kilometres away from the closest coastline of India. India’s territorial sea occupies approximately 1,93,834 square kilometres and the Exclusive Economic Zone (hereinafter referred to as, “EEZ”) takes under its scope approximately 2.02 million square kilometres (sqkm). The living and the non-living resources that reside in this zone, amount to two-thirds of the landmass that India occupies and these resources, whether living or nonliving, exclusively fall under the ownership of India and they can be deemed to be regarded as a part of India, which also enables India to carry out its transportation activities and this has clearly opened innumerable opportunities for India to carry out its trade activities through this area. This part can also be deemed to be regarded as a part which is home to 51% of India’s oil resources and 66% of natural gas reserves. It is imperative to note that the protection and preservation of these natural resources not only deals with the territorial integrity of the nation but also takes into consideration the safety, which is a highly important factor. These routes act as a safety border which enables India to maintain its territorial integrity and at the same time secures India from potential external threats.

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Sea Lines of Communication (SLOCs)

It is quite imperative to understand the need for Sea Lines as they can be gauged from the fact that the oceans supported about four fifths of the total world merchandise trade pertaining to the year 2014.[3] In a period spanning 10 years, India has diversified itself and has stepped foot in sea trade and its trading activities have multiplied at a constant rate of 3.3 percent. India’s maritime container trading figures have also significantly risen and there has been a steady growth of 6.5 percent which can be deemed to be regarded as a significant growth when compared to the world average of 5.4 percent over the period spanning ten years. On the other hand, the cargo traffic at the ports in India has also seen a massive bull run and it has touched a milestone of 1 billion tonnes per year as compared to the last decade (Financial Year 2005-2015) and it can surely reach the 1.7 billion tonnes per year mark in the next two years, i.e. by the year 2022.[4] These numbers depict that over 95 percent of India’s trading activities lie in the SLOCs and International waters play a major role when it comes to India excelling in the field of trade and commerce via sea routes. The International Shipping Lanes of the Indian Ocean which is used by India requires dire attention and the security needs to be worked upon in order for India to sufficiently continue its trading activities overseas.

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Maritime Economy

Needless to say, the Indian economy is majorly dependent on the energy imports that it has indulged into. Apart from this, the Indian economy also relies on the total domestic oil consumption and it imports oil from other countries and these import activities are eased since India has the Indian Ocean passage when it comes to importing oil. These import activities are undertaken by vessels which travel by the sea and offshore oil gas production can be said to be accounting for almost 80 percent of all domestic gas that is produced. Approximately, 95 percent of the trade that India undertakes internationally by volume and over 70 percent of its value is carried over by the sea routes.[5] India can also be deemed to be regarded as the world’s fourth largest producer of fish and majority of these fishes are imported and come from the sea.[6] The maritime economy of India includes a prominent network of 13 major and approximately 200 minor ports all along the coast. It is imperative at this conjecture to throw light upon the Sagarmala project which has delved into the development of a port and has also significantly contributed towards the quick and efficient transportation of goods and services to and from the ports. It is therefore quite imperative for the Government to build this nascent maritime economy and take initiatives in order to ensure that it is free from impediments and potential external threats.

Maritime Investments

India has contributed in a number of industries such as the infrastructure, energy and services industry in a lot of countries which can be deemed to be regarded as its immediate maritime neighbours. India has also established a research station in Antarctica which enables India to carry out research activities in a wide variety of areas, however, India has majorly worked towards the development of the technology which would enable India to deal with the global climate change issues. India has shown tremendous potential when it comes to venturing into deep sea mining activities and is working in close consonance with the International Seabed Authority, which has accorded it a pioneer status and at the same time has provided 75000 square kilometres of seabed area in the Central part of the Indian Ocean. ONGC Videsh Ltd has ventured into oil exploration activities and has set up its oil exploration plant in the Exclusive Economic Zone (EEZ) of Vietnam. ONGC Videsh Ltd is carrying out these activities within the two blocks which the Vietnamese Government has allocated to it and because of this the Chinese Government is causing disruptions and China has made claims alleging that the activities carried out by ONGC Videsh Ltd along with the Vietnamese Government are illegal and are jeopardising the status of the already in dispute South China Sea. However, India is still in its nascent stages and is taking innumerable efforts when it comes to developing its economy in the maritime sector, however, it is important for India to ensure that it is secure from external threats which could severely jeopardise the inimical interests.

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India’s Maritime Security Concerns

India’s maritime security has been a crucial issue and these issues arise from the threats, which have majorly occurred in the interest of the Indian Ocean and this is in direct consonance to India’s varied maritime interests. It is crucial to understand that a number of these potential maritime threats which are lurking over India have a direct influence on the other stakeholders in the Indian region and this may have a significant impact on India, since India is, “already assuming her responsibilities when it comes to securing the Indian Ocean region.[7]  India faces immense potential threats from its neighbours and these potential threats could seriously harm the national interests of the country during times of war and hostilities which are never taken into consideration since they fall under the scope and the ambit of war fighting, however, what is important at this conjecture is to ensure that the legislature gets out of its lethargy and establishes a robust and comprehensive piece of legislation which governs the maritime activities. There lurks a constant threat to the SLOCs as the SLOCs in the IOR are extremely susceptible to being disrupted by a wide variety of traditional and non-traditional threats over the years. However, India has constantly depended upon the seas when it comes to carrying out trading activities and these threats which are constantly lurking over the SLOCs in the IOR could be resolved if a comprehensive legislation is enacted and put in force. The Legislature needs to enact a law which may act as a shield over all the nefarious activities that could be deemed to be regarded as a potential harm to the maritime security of India. For instance, Piracy, Regional Instability, Trafficking of Goods and Humans, Terrorism, et. Cetera could all be controlled if a proper and a comprehensive law is enacted by the legislature. There have even been instances of illegal unreported and unregulated fishing, which has proven to be a severe issue for the marine communities around the globe and the governments of a number of coastal states are constantly endeavouring towards enforcing international and national maritime laws which are robust and control these aforementioned activities.

Regional Security Architecture in the IOR

India has always been cooperative and has taken a very positive approach when it comes to bolstering maritime security in the IOR. This is evident from PM Narendra Modi’s aim of SAGAR, also known as the Security And Growth for All in the Region.[8] The IOR has innumerable arrangements in this particular area and this area can be said to be restricted for other countries. India has taken innumerable efforts and has developed the IORA which is the Indian Ocean Rim Association, which was launched in the year 1997 and its goal is to promote the growth of intra-regional economy. However, maritime security and safety has not been given much emphasis, but the Indian Ocean Naval Symposium is another initiative which was founded in the year 2008 and it works in the direction of improving the maritime co-operation between the navies of various littoral states surrounding the Indian Ocean Region. However, again this is an initiative by the Navy and there is a clear absence of the government’s participation.

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In a nutshell, a comprehensive and an overarching security framework for the Indian Ocean Region is extremely crucial for the government to develop considering the current geopolitical status and the developmental activities being carried out by the various littoral states. The Legislature needs to emphasize on how important it is for India to have a responsibility of regional states when it comes to maintaining peace, stability and prosperity in the Indian ocean. India needs to make a concerted effort in the form of a robust piece of legislation if it aims to mitigate the innumerable threats lurking over it.

[1] KM Panikkar, “India and the Indian Ocean: An Essay on the Influence of Sea Power on Indian History.”

[2] “The Periplus of the Erythraean Sea”, Longmans Green & Co, 1912.

[3] UNCTAD Review of Maritime Transport 2015, Page 5.

[4] Facts & Figures, Maritime India Summit 2016.

[5] Facts & Figures, Maritime India Summit 2016.

[6] FAO yearbook 2012, Page 9.

[7] ICC IMB Piracy and Armed Robbery against Ships, 01st January-31st December, 2015.

[8] PM Modi’s Speech Commissioning of Mauritius CG Ship Barracuda, 12th March, 2015.

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Impact Of Covid-19 on Insolvency and Bankruptcy Laws of India and the World at Large

By: Anjan Bhandari 

INTRODUCTION:

In the past few months, India has witnessed unprecedent changes being made in almost every sphere; whether it be something as simple as a lifestyle change or something as complex as amending various legislations to safeguard and protect the interests of both the parties. To give you a better perspective, the Central Government on 24th March declared a nationwide lockdown as a preventive step to limit the spread of the infectious coronavirus. In doing so, everyone was required to restrict themselves to their homes thereby bringing our economic structure to a standstill. Nobody knew for how long the lockdown would ensue when it began, but now we do have adequate data that informs us about the manner in which the lockdown was imposed and in how many phases –

  • PHASE 1 : 25th March – 14th April [Nationwide lockdown]
  • PHASE 2 : 15th April – 3rd May [Further extended]
  • PHASE 3 : 4th May – 17th May [Further extended]
  • PHASE 4 : 18th May – 31st May [Further extended]
  • PHASE 5 : 1st June – 30th June [Considerable relaxations from 8th June]

According to the above-mentioned data, it is clear that COVID-19 is the primary reason for all business uncertainties and the economic stabilities at large since the lockdown was continued for so long. All industrial activities came to a standstill because of which the Companies suffered huge losses which either resulted in salary reduction or laying off a major chunk of their employees in order to manage their sustainability. And not just the industrial sector, the outbreak of COVID-19 has caused massive difficulties for all sectors globally, such as the Micro Small Medium Enterprises (MSME’s), healthcare, tourism, automobile, etc. Courts all across the country has prohibited physical hearing to maintain social distancing except a few important cases and has instead resorted to virtual court proceedings. The only thing that can be said with absolute surety is that the brunt of this economic meltdown will be faced by all the financial institutions since its difficult to comment on the overall impact of the lockdown.

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IMPACT OF COVID-19 ON IBC LAWS IN INDIA:

The All India Association of Industries estimated a loss of 2lakh crore by 31st March due to the nationwide lockdown. The Central government has been trying to minimise such drastic blows by bringing in numerous reforms. The virus has indisputably disrupted the performance of contracts and payments consequently creating problems for the financial and operational creditors. It will have a devastating impact on economy if the creditors wish to initiate insolvency proceeding against the corporate debtors at a mass scale amidst this pandemic.

What’s important to notice is that the value of the stocks is declining at a startling rate since the demand has decreased at a global level. It wouldn’t be too far-fetched to suspect that at this point, the financial and operational creditors would move to the National Company Law Tribunal (NCLT) to avail remedies available to them under the Insolvency and Bankruptcy Code, 2016. After approaching the NCLT, initiation of the insolvency proceeding will have a negative impact because then the management of the company would shift from the hands of the corporate debtor to the insolvency resolution professional and as a result, the value adding mechanism by the corporate to the economy gets highly stunted.

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It is imperative to safeguard the interests of the MSME’s because if insolvency proceedings are initiated against them, it would further lead to rise in unemployment in the country. Pre-empting such an impact, our Finance Minister Nirmala Sitaraman had announced that if the current state of affairs continued beyond 30th April, the Central government may suspend a few relevant sections of the IBC for 6 months in order to protect companies from being forced into insolvency proceedings in such force majeure causes of default. Due to these reasons, the Government of India decided that they need to adopt a pragmatic approach in dealing with this problem and came up with the following amendments to the IBC, 2016 –

  • Application under Sections 7, 9 and 10 can only be filed when the default is of Rs. 1 crore or more.[1] Earlier U/S 4(1) of IBC, the minimum amount of default was Rs. 1 lakh which has now been officially increased by the Ministry of Corporate Affairs (MCA).
  • Section 7 : Initiation of insolvency proceedings by financial creditor

Section 9 : Initiation of insolvency proceedings by operational creditor

Section 10 : Initiation of insolvency proceedings by corporate applicant

According to the MCA Notification No. S.O. 1205(E) dated 24th March 2020 the Finance Minister as a relief to the affected industry announced that no petitions would be entertained unless the minimum amount of default is Rs. 1 crore or more.

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  • The Supreme Court on 23.03.2020 opined that the lockdown period should be excludedfor the purpose of counting the timeline. Even the NCLAT ordered the same on 30.03.2020. The order states that “the period of lockdown imposed by the central government in the wake of Covid-19 outbreak shall not be counted for the purposes of the timeline for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process.”[2]
  • The government may even consider scrapping Section 7, 9 and 10 of the IBC, 2016 so that no insolvency proceedings be initiated by the promoter, operational or financial creditor if the situation continues beyond 30th April, 2020 and if it does, it would be scrapped for a period of 6 months.

The first amendment that came in on 24th March which increased the minimum default vale from Rs. 1 lakh to Rs. 1 crore not only reduced the workload on the insolvency resolution professionals but also turned out to be beneficial for the MSME’s and corporate debtor. However, the fruit to such benefits is only enjoyed by one as opposed to safeguarding equal interest of the parties. Increasing the default value to such a higher threshold causes immense dissatisfaction to the operational and financial creditors. The operational creditor in particular would face hindrances as they won’t be able to utilise this remedy to regain the operational and corporate debt from the corporate debtor. Moreover, their operational debt isn’t generally this high to be able to initiate insolvency proceedings which further puts them on the backfoot. Under Section 9 of the IBC, 2016 the operational creditor cannot even jointly file for an application unlike as mentioned under Section 7 of the Insolvency Code, 2016. Kumar Saurabh Singh, Partner at Khaitan & Co. said that the Central Government shall also cover matters of liquidation in other courts and tribunals besides the IBC process. He said that “A similar approach would also be required to be followed by other courts/tribunals in the country to not allow enforcement and sale of assets of companies which are suffering from the impact of the pandemic situation so that the benefit of suspension of insolvency law is effectively given to the borrowers.”

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After diving deep into the details of the impact of COVID-19 on the IBC laws in India, the question still remains whether the applicants who filed for the insolvency resolution before the pandemic should be affected or not. In my view if it does, then the applicants would rather prefer indulging themselves in outside settlements rather than utilising the provisions under the Insolvency and Bankruptcy Code thereby defying the very purpose of the said statute.

IMPACT OF COVID-19 ON IBC LAWS ACROSS THE WORLD:

  • UNITED STATES – On 19th February, the Small Business Reorganisation Act became effective which seeks to provide an economical and quicker option for reorganisation of businesses with total debts falling within the quantum of $2,725,625. On 28th March, Donald Trump gave a nod to the Coronavirus Aid, Relief, Economic Security (CARES) Act. Apparently, it is the largest emergency aid package ever provided in US history. It includes revised retirement account rules, student loan changes, and the unemployment coverage. There has also been an increment in the debt limit under the CARES Act to $7.5 million for a year in order to allow small business debtors to realign their affairs for a new start.

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  • SINGAPORE – The Ministry of Law in Singapore had announced that they would introduce a bill in the Parliament aimed at finding a way for an organised moratorium so that the obligations that ensue are either suspended or deferred. A distinctive feature of the Bill is that the parties would not be allowed to be represented by lawyers in case of a dispute. Instead, an assessor would be appointed by the Ministry of Law who will decide on an equitable and just outcome without any legal fees. 
  • AUSTRALIA – On 23rd March, the Commonwealth government introduced the Coronavirus Economic Response Package Omnibus Bill 2020[3] which was passed by both Houses of Parliament and received the Royal Assent on 24th Certain temporary amendments were made to the Corporation Act, 2001 which are as follows:
  • Amendment relating to individual in financial distress
  • Amendment relating to businesses in financial distress
  • Temporary relief for directors from the duty to prevent insolvent trading

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  • UNITED KINGDOM – Alok Sharma, Business Secretary announced a package of insolvency measures to be adopted in the future. The UK government has shown keen interest in bringing forward such legislation, but the timing still remains uncertain. It is evident that the government is building up on potential reforms announced in August 2018. The new structuring tools include –
  • To bring in measures safeguarding the suppliers and creditors, thereby ensuring timely payments until a more viable solution is reached.
  • Coming up with a new restructuring plan, and binding creditors to that plan.
  • To introduce a moratorium for companies allowing them a breather from creditors enforcing their debts for a while until they seek a restructure or rescue.
  • To protect their supplies thereby enabling them to continue with their trading activities during the moratorium period.

 Thus, on comparing the impact of COVID-19 on IBC laws in India with the rest of the world, we can deduce that almost similar precautionary steps were adopted by other countries. Some of them increased their minimum default limit required to file for insolvency proceedings, some have thought of implementing a moratorium period, while the others decided to put a bar on initiation of insolvency proceedings after a set particular date.

[1] https://www.ibbi.gov.in/uploads/legalframwork/48bf32150f5d6b30477b74f652964edc.pdf

[2] http://www.mca.gov.in/Ministry/pdf/Notification_30032020.pdf

[3] https://pinpoint.cch.com.au/document/legauUio3230299sl1133168580/regulation-5-4-01aa-temporary-increase-to-the-statutory-minimum-and-statutory-period

 

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