Tag: civil system in india

Categories
Blog Intellectual Property Law

Trademark Dilution

By: Muskan Sharma

Introduction

Trademark Dilution is an act when someone uses a trademark, without any authority, that tarnishes or blurs the image of a famous mark. Dilution is a type of violation of a trademark, in which the defendant’s use, though not causing the likelihood of confusion, blurs distinctiveness or tarnishes the image of the plaintiff’s famous mark. The protection provided by Section 29(4) of the Trademarks Act, 1999, to the dissimilar goods and services, is based upon the ‘doctrine of dilution’.

The irony is that the expression ‘dilution’ has not been used expressly anywhere in the Trademarks Act, 1999. A plain reading of Section 29(4) of the Trademarks Act, 1999 reveals that a person infringes an already registered trademark if he, not being a person authorized with the permitted use, uses a trademark which—

  1. is similar to or identical with the already registered trademark, and
  2. is used to represent those goods and services which are way different from those for which the trademark was first registered, and
  • the registered trademark is a famous mark, and
  1. is detrimental to the distinctive characteristics of the registered trademark.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

Importance of Doctrine of Dilution

The purpose behind the protection of trademarks is to avoid weakening or dilution of trademarks. If the subsequent user resorts to the use of the similar or near the similar mark in respect of the same goods or services, it would not only decrease the value of the famous mark i.e. trademark of the prior user but ultimately result in dilution of the mark itself. Such an invasion made by the subsequent user is nothing but a commercial invasion. It may yield greater profits to the subsequent user for sometime but will harm the market in the long run.

A Trademark is like a property and no unauthorized person is allowed to commit trespass on it. Such a kind of dilution or weakening of the famous mark, therefore, need not be accompanied by the element of confusion.

In Caterpillar Inc. v. Mehtab Ahmed[1], the Delhi High Court has highlighted the importance of the ‘Doctrine of Dilution’. The Delhi High Court observed:

“So far as doctrine of dilution is concerned, it is an independent and distinct doctrine. The underlying object of this doctrine is that there is presumption that the relevant customers start associating the mark or trade mark with a new and different source. It results in smearing or partially affecting the descriptive link between the mark of the prior user and its goods. In other words, the link between the mark and the goods is blurred. It amounts to not only reducing the force or value of the trade mark but also it gradually tapers the commercial value of the marks slice by slice. Such kind of dilution is not a fair practice that is expected in trade and commerce”[2].

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

Trademark Dilution in India and USA

Indian Courts have recognized the following as essentials of dilution under Section 29(4) of the Trademarks Act, 1999:

  1. The impugned mark should be similar or identical to the injured mark,
  2. The one claiming injury caused by dilution must prove that his trademark is a famous mark,
  • The use of the impugned mark is without any due cause and authorization, and
  1. The use of the impugned mark amounts to taking unfair advantage of the reputation of the famous mark or is detrimental to the distinctive characteristics of the famous mark.

The US Courts have a stricter approach than Indian Courts. In India, the trademark needs to have a reputation whereas according to the US laws, the trademark should be a famous mark. In the US, the user of an averagely well-known trademark cannot claim for dilution of a trademark. A clear distinction has to be made between a mark with a reputation and a famous mark. Dilution rights are indeterminate in nature and therefore, the standard of fame required to claim dilution rights should be high. A trademark that is not distinct and famous cannot be diluted.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

In the USA, the Trademark Dilution Revision Act, 2006 has been enacted to deal with Trademark Dilution. The Act provides that to determine whether the impugned mark satisfies the required degree of fame, the following factors should be taken into account:

  1. The extent, duration, and geographic reach of publicity and advertising of the trademark, whether publicized or advertised by the owner or third party,
  2. The volume, amount, and geographic extent of sale of goods or services offered under the representation of the famous mark,
  • The extent of the recognition of the famous mark, and
  1. Whether the famous mark was registered in some register or under any previous legislation.

Forms of Trademark Dilution

Trademark dilution does not cause confusion and comes mainly into two forms:

  1. Blurring, and
  2. Tarnishment

Take the example of ‘Coca Cola’ and ‘Coke’. Both the names and the shape of the bottle in which the beverage often comes are famous marks. If a third firm markets its product as ‘Coca Cola’, it will lead to ‘trademark infringement’. If a third firm markets its product as ‘Sugary Cola’ in Coke-shaped bottles, it can weaken the uniqueness of the characteristics of the bottle. This will amount to Blurring. However, if another firm sells vodka and label it as ‘Coca Cola Vodka’, it can damage the brand image associated with the name ‘Coca Cola’. It will amount to tarnishment.

Therefore, a conclusion can be drawn that when it affects characteristics associated with the name of a famous brand or a famous mark, it is blurring. However, if the process leads to the weakening of the distinctiveness of the name of the famous brand or famous mark, it is tarnishment.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

Dilution by Blurring

Blurring refers to the subverting of the distinctiveness caused by the unauthorized use of a famous mark on dissimilar products. Blurring takes place when a third party uses a trademark in such a way that it decreases the likelihood that the famous mark will be a unique identifier of the prior registered products and services. It hinders the market growth of the owner of the famous mark being used.

Dilution by Tarnishment

Dilution of a trademark may also be performed by either sullying or impairing a distinctive quality of a trademark of an already existing user. This is usually known as ‘dilution by tarnishment’. The purpose behind such an invasion is to degrade, tarnish, or dilute the distinctive quality of a trademark. For instance, if an attempt is made to communicate an idea that a particular product of a senior user is injurious to the health or is inferior in quality and some epithet is used in the advertisement. If one has to convey the idea that Coca Cola is not good for health, and his advertisement campaign states Drink Cocaine in the same font and script as used by the senior user, he will be considered liable for dilution of a trademark.

The act of dilution of a trademark by way of tarnishment is mostly with regard to strong, well-recognized, and famous trademarks. It has the effect of weakening or diminishing the identification value and strength of the trademark. There is no need to establish the likelihood of confusion with regard to affiliation, source, and connection. This is so as some potential buyers may be confused as to the source or affiliation while others may identify the source or affiliation without any hassle.

Landmark Cases

  • Bata India Ltd. v. M/S. Pyare Lal & Co. Meerut City & Ors.[3]

The Plaintiff company ‘Bata India Ltd.’ came to know about ‘Batafoam’ which used to deal in sofas, cushions, mattresses, and similar items. ‘Batafoam’ was using the name ‘Bata’ in the same form and style and an average customer would’ve mistaken both the trademarks as the same.

The Hon’ble Allahabad High Court held that this action of the defendant of using Bata’s trademark will cause damage to the reputation of the plaintiff. It is a trespass on the right of the plaintiff over the trademark ‘Bata’. Bata’ is neither a fancy name nor a paternal name and not related to the defendant in any case. It is a name well-known in the shoe industry. The Court observed that the defendant is causing not just deception in the minds of the buyers but an injury to the plaintiff as well.

  • Daimler Benz Aktiegesellchaft and Anr Hybo Hindustan[4]

The Delhi High Court observed that the use of the trademark ‘Benz’ for underwear by the defendant whereas the plaintiff has been already using the same trademark ‘Benz’ for cars would be discrimination against the usage of the pre-acquired trademarks by the plaintiffs. The Delhi High Court, therefore, granted the injunction which the plaintiff sought against the defendant.

  • Ford Motor Company CR Borman[5]

In the present case, the question before the Court was whether the use of the trademark ‘Ford’ to represent shoes by the defendant amounts to an infringement of the plaintiff’s right over the famous mark ‘Ford’ to represent automobiles.

The Court observed that the use of a famous mark for two different classes of products also amounts to tarnishment of a trademark. Therefore, the defendant’s action of using the trademark ‘Ford’ to represent shoes does amount to an infringement of the plaintiff’s right over the famous mark ‘Ford’ to represent automobiles.

  • ITC Ltd. v. Philip Morris Products SA[6]

The plaintiff was the owner of the ‘WELCOMEGROUP’ logo containing a device displaying folded hands. In a suit for dilution of trademark, the Hon’ble Court stated that the plaintiff has to pass a more stringent test (than the deceptive similarity standard) of proving similarity or identity. The observed that a global look, rather than a focus only on the mutual elements of the mark, is to be taken while deciding if the impugned or junior mark infringes, by dilution of an existing registered mark. The plaintiff’s mark resembles a ‘W’ but the gesture of ‘Namaste’ is discernible. All the defendant’s previous marks resemble ‘M’ (Maybe Marlboro). Considering the overall marks for the logo, without cataloguing minutely the dissimilarities or similarities, this court discerns no ‘similarity’ or ‘identity’ in the overall presentation of the two marks.

  • Bayerische Motoren Werke AG Om Balajee Automobile (India) Private Limited[7]

In the present suit, the applicant moved an application before the Delhi High Court seeking ad interim injunction against the defendant for using ‘DMW’ mark for e-rickshaws it manufactures. The plaintiff pleaded that ‘BMW’ is a famous mark and represents the existence of ‘Bayerische Motoren Werke’, A German automobile manufacturing company. The defendant used a deceptively similar mark for e-rickshaws. The last two letters of both the trademarks are ‘M’ and ‘W’ and the first letter of both marks ‘B’ and ‘D’ are phonetically similar. Therefore, the mark ‘DMW’ and ‘BMW’ are deceptively similar.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

The Delhi High Court observed that the defendant had adapted to the essential features of the famous mark of the plaintiff and the phonetic and visual resemblance was apparent. ‘DMW’ mark was supposed to cause confusion in the minds of the buyers due to the deceptive similarity between the two.

The Court held that in the case of famous marks like ‘BMW’, the use of a phonetically and visually similar trademark by the defendant does constitute infringement under Section 29(4) of the Trademarks Act, 1999 because it is detrimental to the reputation of plaintiff’s famous mark ‘BMW’. It was further held that the ‘deceptively similar’ standard was not a part of the infringement under Section 29(4) of the Trademarks Act, 1999, and the question of deceptive similarity would not arise in trademark dilution cases.

Conclusion

Trademark Dilution is, therefore, a process of trademark infringement where the subsequent use of a trademark dilutes the essence of a famous mark and uses the diluted mark for his own publicity and advertisement. Trademark dilution can be carried out by two methods namely, Blurring and Tarnishment. The idea behind the protection of famous marks from the process of trademark dilution is to preserve their uniqueness and distinctive characters. It also prevents the birth of confusion in the minds of buyers with respect to the goods and services associated with a brand’s famous mark.

In India, the trademark dilution regime is governed by Section 29(4) of the Trademarks Act, 1999 whereas in the US, the trademark dilution regime is regulated by the Trademark Dilution Revision Act, 2006. In India, there needs to be some level of reputation of the already registered trademark to constitute a case of trademark dilution whereas in the US, the already registered trademark should be a famous one to constitute a case of trademark dilution. The concept of Trademark Dilution under both regimes is similar to a great extent but there are slight distinctions like the standard of ‘reputation’ and ‘fame’.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

[1] 2002 (25) PTC 438 (Del)

[2] Ibid.

[3] AIR 1985 All 242

[4] AIR 1994 Delhi 236

[5] MIPR 2008 (3) 418

[6] 2010 (42) PTC 572 (Del)

[7] CS (COMM) 292/2017

Categories
Blog Intellectual Property Law

IP and MSMEs: The Climacteric Role of Intellectual Property in the Future of MSMEs

By: Rushika M

“Intellectual Property is the oil of the century. Look at the richest men a hundred years ago; they all made their money extracting natural resources or moving them around. All (of) today’s richest men have made their money out of intellectual property.”

-Mark Getty

  1. Introduction

Intellectual property is an important legal and cultural issue.[1] The increasing speed of technological advancement and economic integration in recent years has highlighted the importance of intellectual property[2] and put great stress on the knowledge and ability of persons, businesses and entities to protect their intellectual property rights. One of the sectors of society most affected by its lack of cognizance and perception of intellectual property is the Micro, Small and Medium Enterprises (hereinafter “MSME”) sector. Therefore, the importance and pre-eminence of intellectual property for the MSME sector is the keynote of this article.

  1. What are MSMEs?

As previously mentioned, MSME stands for Micro, Small and Medium Enterprises. As the term suggests, MSMEs essentially refer to small businesses in the private sector. Across the world, regulators and financial institutions apply parameters such as the strength of employees, annual sales valuation, fixed assets valuation, loan size proxies and similar parameters to define MSMEs and classify entities accordingly. Even the World Bank classifies MSMEs based on three criteria: (i) employee strength; (ii) size of assets; and (iii) annual sales.[3]

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

In India, the classification of MSMEs is made under the Micro, Small and Medium Enterprises Development Act, 2006 wherein, the three categories of entities are defined under section 6 of the Act,[4] in respect of their investment in Plant and Machinery or Equipment and their turnover value as follows:

  • Enterprises whose investment does not exceed one crore rupees or turnover does not exceed five crore rupees are Micro enterprises;
  • Enterprises whose investment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees are Small enterprises; and
  • Enterprises whose investment does not exceed fifty crore rupees and turnover does not exceed two hundred crore rupees are Medium Enterprises.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

  1. Role of Intellectual Property in MSMEs

Across the world, the MSME sector significantly contributes to socio-economic growth and development of nations. In India alone, an approximation of 6.3 crore MSMEs contribute to 29% of India’s GDP from national and international trade operations.[5] Their contribution to entrepreneurial development and employment in the country is also tremendous. In light of the same, it is of considerable prudence to secure and protect the interests of MSMEs as they are also consequential to the economy at large.

Conventionally, MSMEs have relied on the creation and accumulation of tangible assets such as land, machinery and office equipment, along with their revenue and receivables, to boost their financial standing, valuation and prestige in the industry.[6] However, by dint of scientific and technological developments in the recent past, MSMEs have been catapulted into a quest of an entirely different nature wherein each entity is competing to amass intellectual property of the greatest value. It is hence the actuality of the present day that intellectual property shall play a colossal role in determining the ensuing path of the MSME sector.

Primarily, intellectual property enables MSMEs to protect their ideas and innovations. MSMEs spend large amounts of money, time and resources in the research and development of various works, technologies and products. However, their work is often taken advantage of and commercially exploited as their ideas are copied, or cheap replicas or imitation products are produced and passed off as the product of the MSME or sold by competitors. In either case, MSMEs are the entities that suffer great economic losses and setbacks. Intellectual property rights protect and safeguard MSMEs against these very dangers apprehended, and in cases of violation or infringement of rights, provide MSMEs with adequate remedies and reliefs to secure their interests.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

Secondly, intellectual property allows MSMEs to harness the commercial value of their work in the form of revenue verticals, licensing agreements, further research and development arrangements, etc. thereby allowing MSMEs to recoup their investments and also encouraging further investments in innovation and scientific advancement.[7]

Thirdly, intellectual property plays a significant role in the establishment and promotion of the MSME’s brand identity.[8] Not only does it prevent other entities from imitating the MSMEs creations, it also protects the image of the MSME from being tarnished or impersonated by others. Thus, intellectual property enables MSMEs to retain the authenticity and originality of their identity.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

Further, intellectual property adds to the value chain of business at each level, may it be the stage of ideas and innovations, research and development, or the actual production of the good or commodity. Even at the marketing and distribution level, intellectual property constantly adds value to the product and to that of the MSME. Some intellectual properties hold a greater individual valuation than the sum total of all the other tangible assets of the enterprise combined.[9] Therefore, effective intellectual property management is key to enhancing the corporate and monetary worth of the MSME.

Finally, effective intellectual property management also aids MSMEs in attracting potential investors, in accessing financial resources and in entering new market areas.[10]

  1. Conclusion

From the above, it is evident that intellectual property plays an indispensable role in securing the socio-legal and economic interests of MSMEs. Not only does intellectual property provide a clearly discernable competitive advantage to MSMEs, it is in fact quintessential to the growth and subsistence of MSMEs in the future. Inadequate knowledge and protection of intellectual property could quite possibly result in the closure of various MSMEs as large corporate entities with massive resources dominate the industry and create legal monopolies under the garb of intellectual property protection. Therefore, the acute need of the hour is for MSMEs to recognize and appreciate the role of intellectual property in determining the future of the MSME sector and in preventing its apprehended downfall.

Learn more about Intellectual Property Rights with Enhelion’s Online Law firm certified Master Course! 

[1] BCS, The Chartered Institute of IT, “Leaders in Computing: Changing the Digital World” (BCS, The Chartered Institute of IT, 2011)

[2] HE Dr. Talal Abu-Ghazaleh, https://www.talalabughazaleh.com/page.aspx?page_key=key_in_his_word#:~:text=%22The%20increasing%20speed%20of%20technological,effectively%20serve%20the%20global%20community.%22 (last visited April 25, 2021).

[3] International Finance Corporation, “Micro, Small and Medium Enterprise Finance in India”, (International Finance Corporation, 2012). https://openknowledge.worldbank.org/bitstream/handle/10986/26553/114457-WP-IN-MSME-Report-03-01-2013-PUBLIC.pdf?sequence=1&isAllowed=y

[4] Micro, Small and Medium Enterprises Act, 2006, §6, No. 27 of 2006, Acts of Parliament, 2006 (India).

[5] India Brand Equity Foundation, https://www.ibef.org/industry/msme.aspx#:~:text=India%20has%20approximately%206.3%20crore,2.1%20million)%20units%20in%202019 (last visited April 25, 2021).

[6] Rahul Bagga, “Why MSMEs should treat Intellectual Property Rights assets”, Economic Times (April 25, 2021, 11:58 p.m.), https://economictimes.indiatimes.com/small-biz/sme-sector/why-msmes-should-treat-intellectual-property-rights-as-assets/articleshow/69304077.cms?from=mdr

[7] National Institute for Micro, Small and Medium Enterprises, https://nimsme.org/IPR-and-Its-Implications-for-MSMEs (last visited April 25, 2021).

[8] Siddharth Mahajan, “MSMEs must protect their ideas; investment in IP protection is asset not expense”, Financial Express (April 25, 2021, 11:58 p.m.), https://www.financialexpress.com/industry/msme-other-msmes-must-protect-their-ideas-investment-in-ip-protection-is-asset-not-expense/1801781/#:~:text=Intellectual%20Property%20Rights%20(IPRs)%20are,%26%20Medium%20Enterprises%20(MSMEs).

[9] Altacit Global, https://www.altacit.com/resources/ip-management/msmes-and-intellectual-property-rights/ (last visited April 25, 2021).

[10] DK Sinha, “Need of Intellectual Property Rights (IPR) for MSMEs”, Your Article Library (April 25, 2021, 11: 58 p.m.), https://www.yourarticlelibrary.com/law/need-of-intellectual-property-rights-ipr-for-msmes/41149.

Categories
Blog Criminal Law

How to file a Criminal Complaint in India

By:-Muskan Sharma

What is a Criminal Complaint?

A Criminal Complaint is a complaint consisting of such facts and circumstances forming part of the commission of an offence. In India, the Indian Penal Code, 1860 (hereinafter referred to as “IPC”) is the penal law stating all the offences, except as provided under any other law. The Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) is the procedural law that governs the criminal regime from the stage of lodging a criminal complaint to convicting/acquitting the accused person.

Importance of a Criminal Complaint

A Criminal Complaint sets the criminal law regime into motion.

In Emperor v. Khwaja Nazir Ahmed[1], it was observed that an FIR provides early information as to the alleged offence, to record the facts of the case before they are forgotten or glorified, and to provide the same to the Court as evidence for the investigation of the case.

Though FIR is not considered as evidence and has almost nil evidentiary value, it can be used to corroborate the statements of the accused, witnesses, victim, and other persons involved in the offence.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Therefore, a Criminal complaint serves the following purposes:

  1. Early Disclosure of information as to the commission of an offence.
  2. Prevent the accused from becoming a habitual offender.
  3. Justice to be served to the victim.
  4. Commencement of the investigation as to the commission of the alleged offence.

Information that constitutes an FIR

A Criminal Complaint or an FIR should contain the following information:

  1. Whether the complainant is an eye witness to the incident, heard about the incident, or is a victim himself/herself.
  2. Nature of the offence.
  • Name and other details of the victim (if aware).
  1. Name and other details of the accused (if aware).
  2. Date and time of the occurrence.
  3. Place of the occurrence.
  • Description of the incident as a step-by-step process along with the surrounding circumstances.
  • Name and other details of all the witnesses to the occurrence.
  1. Whether any traces were left behind by the accused.
  2. Any other material circumstances.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Information does not constitute an FIR

It must be noted that not all information can be termed as a ‘criminal complaint’ or ‘FIR’. Only the information that is disclosed to the officer-in-charge of the concerned Police Station and reveals the commission of a cognizable offence can constitute an FIR. Also, only the earliest version of the case can constitute an FIR.

In case of multiple FIRs registered in a single case, the earliest report to the police officer will reach the officer-in-charge as the FIR.

Telephonic Information

If the telephonic information received by the concerned police officer discloses neither the name of the accused nor the offence committed, it will not amount to an FIR or Criminal Complaint. The same has been stated by the Supreme Court in Ravishwar Manjhi & Ors. v. State of Jharkhand[2].

In Soma Bhai v. State of Gujarat[3], a complaint was reported to the sub-inspector and before reducing the information to writing, the sub-inspector looked for instructions from the main police station at Surat via telephone message. It was observed that information written down by the sub-inspector was an FIR but the message received by the sub-inspector was too vague and cryptic to be called an FIR.

In T.T. Anthony v. State of Kerala[4], it was observed by the Supreme Court that apart from cryptic information received via telegram or telephone, the information recorded first in the station house diary by the officer-in-charge is the FIR.

In Thaman Kumar v. State of Union Territory of Chandigarh[5], it was held that telephonic message conveyed by the Constable on Night Patrol Duty does not constitute an FIR.

In Vikram & Ors. v. State of Maharashtra[6], PW2 informed the police officer on telephone and missed out on some of the details. The Supreme Court observed that a cryptic and anonymous message conveyed to a police officer via telephone, which does not disclose the commission of a cognizable offence, cannot be considered as an FIR. It was further observed that merely because the information was first in point of time, it cannot be called an FIR.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

In Animireddy Venkata Ramana and Ors. v. Public Prosecutor, High Court of Andhra Pradesh[7], it was held that information received by an officer-in-charge via telephone about the commission of a crime is not an FIR but merely a call to make the Police come to the crime scene merely. It is not expected of an officer-in-charge of a police station to go to the crime scene only after the registration of an FIR.

In Sidhartha Vashist @ Manu Sharma v. State of NCT of Delhi[8], it was again observed that a cryptic message received via telephone should not be treated as an FIR as the intent of such a communication is only to get the police to the crime scene. The intention can be culled out from a reading of Section 154 of the CrPC which provides that if the information is provided orally, should be reduced to writing.

Ways to file a Criminal Complaint

To set the criminal law into motion, the first step is to report the commission of a crime. There are two ways to report the commission of a crime, which are as follows:

  1. One may go to the nearest Police Station and provide all the information related to the commission of a crime to the concerned police officer. If the information disclosed reveals the commission of a cognizable offence, the concerned police officer will lodge an FIR (First Information Report) under Section 154 of the CrPC.
  2. If the information disclosed reveals the commission of a non-cognizable offence, the concerned police officer will lodge an NCR (Non-Cognizable Report) under Section 155 of the CrPC. The concerned police officer then forwards the NCR to the Magistrate and has no power to investigate such a case without the order of the Magistrate.
  3. Apart from this, in petty incidents like Lost and Found, Missing person, and similar incidents, one can go to the state police portal and file an e-FIR. The service of e-FIR has made it easy for the citizens to report their petty cases and not go to the police station every now and then. Surprisingly, there are no provisions that expressly regulate the procedure to be followed after the filing of an e-FIR. Hence, there is a dire need for some more provisions in the criminal law regime of India that can govern the procedure of registering e-FIR and the procedure to be followed afterward.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Essentials of an FIR

The expression ‘FIR (First Information Report)’ is not used anywhere in the CrPC. However, Section 154 of the CrPC provides the essential conditions to be satisfied during disclosure of the commission of the alleged offence to the officer-in-charge of the police station, which are as follows:

  1. The offence alleged to have been committed must be a cognizable offence.
  2. The officer-in-charge of the police station must receive such information.
  3. The complainant must reduce all the information to writing and sign it. If the complainant provides the information to the officer-in-charge orally, then the officer-in-charge or his subordinate police officer may reduce it to writing.
  4. The information reduced in writing be read over to the complainant and provided to him for signing it.
  5. The information recorded should be entered into the Daily Diary, General Diary, Station Diary, or such other diary or register as prescribed by the appropriate Government.

After the filing of FIR, the officer-in-charge has to conduct a preliminary inquiry. In Lalita Kumari v. Govt. of Uttar Pradesh[9], the Supreme Court held that the purpose of preliminary inquiry is to determine whether the allegations in the criminal complaint make out a cognizable offence. It was further observed by the Supreme Court that action should be taken against the concerned police officer if no FIR is registered even after the disclosure of a cognizable offence.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Remedies for non-registration of FIR

There is a dire need to expand the scope of e-FIR as the service is available only for petty crimes and also because the police officials often deny registering a criminal complaint. However, the expansion of the scope of the service of e-FIR is not in our hands. Therefore, if there is a refusal to register our police complaint, we may adopt any of the following remedies:

  1. One may reach out to police officers of higher ranks and let them know about the complaint.
  2. One may write a letter or application to the Superintendent of Police stating all the material facts and circumstances of the complaint under Section 154(3) of the CrPC. The Superintendent of Police may either investigate the case himself or order an investigation.
  3. One may file a private complaint to the Magistrate under Section 200 of the CrPC. The Magistrate is then, supposed to decide on the issue of cognizance.
  4. If the police do not co-operate in the investigation and one is not sure of the court procedures to be followed, one may take the aid of various bodies like SHRCs/NHRC, NCW, NCPCR, NCSC, etc.

What is Zero FIR?

Zero FIR is an FIR that can be filed at any police station regardless of the jurisdiction. A Zero FIR is ultimately transferred to another police station having jurisdiction to conclude the investigation. The purpose behind lodging a Zero FIR is to obtain evidence in cases involving sexual assault, murder, road rage, and so on. In such cases, it is pertinent to obtain evidence and conduct an investigation as the evidence is capable of being manipulated or corrupted.

Also, it doesn’t let the police officials avoid their duty to investigate an offence. Therefore, the officer-in-charge cannot refuse to register an FIR in such a case merely on the ground of lack of jurisdiction.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Evidentiary Value of a Criminal Complaint

A complaint made to the police has no evidentiary value for the following reasons:

  1. It is not made during the trial.
  2. It is not given on oath.
  3. It is not tested by cross-examination.
  4. It is not a substantial piece of evidence and the only purpose of an FIR is to set the criminal law regime in motion.
  5. A statement made before a police officer is not admissible as evidence as stated in Sections 25 and 26 of the Indian Evidence Act, 1872.

Also, an unreasonable or undue delay in filing an FIR also gives rise to suspicion on the complainant.

However, FIR can be used to corroborate the statements made by the accused, victim, and witnesses during the trial and other types of evidence.

[1] (1945) 47 BOMLR 245

[2] AIR 2009 SC 1262

[3] AIR 1975 SC 1453

[4] AIR 2001 SC 2637

[5] AIR 2003 SC 3975

[6] AIR 2007 SC 1893

[7] AIR 2008 SC 1603

[8] AIR 2010 SC 2352

[9] (2014) 2 SCC 1

Categories
Blog

Condonation of Delay under The Limitation Act, 1963

By: Chinmay Mehta

INTRODUCTION:

The Limitation Act, 1963, of which the concept of Condonation of Delay is a component, was enacted on 5th October, 1963, which came into force on, 1st January, 1964. The essence behind the statutes of Limitation has been well expressed by Lord Plunkett in the following words,

“Time holds in one hand a scythe; in the other hand an hour-glass. The scythe mows down the evidence of our rights, the hour glass measures the period which renders that evidence superfluous.”

The Object behind the Act is not to create or define causes of action, but simply to prescribe the period within which existing rights can be enforced in Courts of Law.1 The Act is based on the well-known Latin maxim: vigilantibus, nor dormientibus jura subveniunt. This means that the law assists the vigilant, not those who sleep over their rights. The Act in its many Sections and Articles, attempts to put down a comprehensive guide for litigants in matters of Limitation, laying down the many circumstances and periods within which a Suit must be brought the Court of Law, or otherwise, stand to be rejected at the very threshold.

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

The Law of Limitation does not create or extinguish rights, except in case of acquisition of title to immovable property by prescription under Section 27 of the Limitation Act.

However, what if a litigant has, in fact been vigilant, but there were certain circumstances which hindered him in filing his Suit on time? He cannot be deprived of his Right to Sue without any fault on his part, where there were other forces at play preventing him in doing so. This is where the component of Condonation of Delay comes into play.

OVERVEW:

What does Condonation mean, in context of the Limitation Act? In simple terms, Condonation is a discretionary remedy exercised by the Courts of Law wherein on an Application made before it by the party who wishes to have an Appeal/Application admitted after the prescribed period, pleads before the Court “a sufficient cause”, which hindered it to file the Appeal/Application on time.

If satisfied, the Court would then condone the delay, i.e., disregard it and have the Appeal/Application admitted as if no delay has occurred and then proceed to hear it.

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

However, it must be noted, that since the remedy is discretionary in nature, the Court is not bound to condone the delay just because an Application was filed, making out a sufficient cause for the delay. The Court may very well be justified in rejecting the Application, if not satisfied with what’s been averred.

A study of Section 5 of the Act:

The Limitation Act enunciates the principle of Condonation, quite early on, in Section 5 of the Act, which reads as under:

Extension of prescribed period in certain cases—Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908), may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or application within such period.

Explanation—The fact the appellant or applicant was missed by any order, practise or judgement of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section.

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

The Supreme Court has held that the words “sufficient cause” in Sec. 5 should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bonafides, deliberate inaction or negligence on the part of the Appellant.2

The following can be said to constitute sufficient cause in the context of the Act:

  1. There have been some significant changes in the law of the land.
  2. The Applicant was suffering from a serious illness.
  3. The Applicant was undergoing imprisonment.
  4. The Applicant is a pardanashin
  5. Delay in procuring copies from officials. Here, it must be shown that the attempt to procure the copy, on the part of the Applicant was vigilantly initiated, but it was because of a delay on the part of the concerned officials, which hindered the Applicant in obtaining it and in filing his Appeal/Application on time.
  6. The delay was caused on account of any action or inaction on the part of the lawyer and not the litigant.

(The list is by no means, exhaustive. There are several situations which may constitute sufficient cause depending on the facts and circumstances of each case. Since the term has not been defined by the Act itself, the Courts enjoy vast discretion here.)

Also, it must be noted that the Section only governs Appeals and Applications. Thus, if a Suit is filed after the prescribed period, it is liable to be rejected on threshold and no Application seeking Condonation of Delay will be entertained by the Courts. A Suit must always be filed within the Limitation period and not beyond it.

What if a person, in good faith, initiates proceedings in a Court which does not possess the requisite jurisdiction to entertain it? If this is done as a bonafide mistake, the time so consumed in litigating before the wrong Court may be condoned by the Courts at their discretion.

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

Also, if a person, as a bonafide mistake, takes the wrong course of action i.e., files a Writ Petition, when, the right course of action would be to file an Appeal, the time consumed in such Writ Petition may be condoned.3

Applicability under Special Law/Statutes:

A question would arise as to whether the law laid down in Section 5 of the Limitation Act affects the working of the Arbitration and Conciliation Act, 1996. Let’s take Section 34 of the said Act, for instance which speaks about setting aside an Arbitral Award. Clause 3 of the Section states that,

An Application for setting aside may not be made after three months have elapsed from the date on which the party making the Application had received the Arbitral Award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the Arbitral Tribunal. Provided that if the Court is satisfied that the Applicant was prevented by sufficient cause from making the Application within the said period of three months it may entertain the Application within a period of thirty days but not thereafter.

The Himachal Pradesh High Court has, in a case, held that this provision in the Arbitration Act is evidently a substitute for the provisions of Section of the Limitation Act and by necessary implication, it excludes the applicability of Section 5 to Applications under Section 34 of the 1996 Act. The expression ‘but not thereafter’ as used in the proviso expressly debars a court from entertaining an Application for setting aside an award thereafter. Section 5 has no application to a case falling under Section 34(3) of the 1996 Act.4

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

Also, Section 29(2) of the Limitation Act lays down that it would be the governing law as far as Limitation is concerned, unless its working is expressly excluded by the Special Law in question.

The Supreme Court has also held that the crucial words in the language used in Section 34 of the 1996 Act are ‘but not thereafter’, this amounts to express exclusion within the meaning of Section 29(2) of the Limitation Act and would therefore bar the application of that Act, hold otherwise is would render the above phrase wholly otiose. Apart from the language, express exclusion may also follow from the scheme and object of the special or local law.5

Relevant Judgements:

  • Collector Land Acquisition v. Mst. Katiji & Ors 6:

The Supreme Court laid down certain guidelines which need to be followed while administering the doctrine of Condonation of Delay:

  1. Ordinarily, the litigant does not stand to benefit by instituting an appeal late.
  2. If the Court is refusing to condone the delay, it can result in a meritorious matter being discarded and the roots of justice being defeated, However, when a delay is condoned, the highest that can happen is that the case will be decided on merits i.e., a decision based on evidence rather than on technical and procedural grounds.
  3. “Every day’s delay must be explained”, does not mean the doctrine is to be applied in an irrational manner. It must be applied in a sensible manner and not literally.
  4. Between substantial justice and technical considerations, the former deserves to be preferred for the other. Other side cannot claim that injustice is done because of a bonafide delay.
  5. There is no presumption that the delay is caused deliberately. The litigant has nothing to gain by resorting to delays and to run a serious risk.
  • New India Insurance Co. Ltd. v. Smt. Shanti Misra 7:

It was enunciated by the Supreme Court here, that the discretion conferred by Section 5 cannot be interpreted in a way that it converts a discretionary remedy into a rigid rule. Also, it was held that the term “sufficient cause” is something which cannot be defined by hard and fast rules.

  • Vedabai alias Vaijayantabai Baburao Patil v. Shantaram Baburao Patil and others 8:

The Supreme Court held, inter alia, that: in exercising discretion under sec. 5 of the Limitation Act, the Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the considerations of prejudice to the other side will be a relevant factor so that the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping mind that in construing the expression “sufficient cause” the principle of advancing substantial justice is of prime importance.

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

  • Ramlal v. Rewa Coalfields Ltd.9:

It was held that want of diligence till the last date of limitation would not disqualify a person from applying for condonation of delay. Therefore, the delay that requires to be explained is from the date the time was running out till the date of filing appeal or the application, as the case may be.

Conclusion:

Thus, it can be said that the Limitation Act does take care of and looks into all the exigencies and circumstances which go about in filing a case on time. A delay does not mean you are deprived of your Right to Litigate. On the other hand, it also takes care of circumstances where it would not actually be in the interests of justice to condone a delay, by giving ample discretion to the Courts in that regard. A study of the judgements as compiled above, also reflects that this discretion is more or less applied with care and caution and in keeping in view, the fair principles of justice. Having said that, we as litigants must take note of the fact, that there are sound reasons behind filing a case on time and it would not only be in the interests of justice but also in our collective interests to be vigilant in recognizing our rights and making sure we do not make use of these broad parameters and leeway given by the law for unlawful gains and benefits but, in fact, (and law) use them judiciously.

1 Liv v. Ramji, 3 Bom. 207

2 Perumon Bhagvathy Devasom v. Bhargavi Amma (2008) 8 SCC 321

3 Bhansali v. State of Madras, A.I.R. 1968, Mad. 373

4 State of Himachal Pradesh v. M/s Kataria Builders, 2003(1) CCC 169 (H.P)

5 Bhansali v. State of Madras, A.I.R. 1968, Mad. 373

6 1987 A.I.R. 1353, 1987 S.C.R. (2) 387

7 1976 A.I.R. 237, 1976 SCR (2) 266

8 A.I.R. 2001 SC 2582: 2001 (5) Supreme 266: 2001 (5) JT 608

9 A.I.R. 1962 SC 361

Learn more about Limitation Laws with Enhelion’s Online Law firm certified Course! 

Categories
Blog Criminal Law

Insanity as a defense under Indian Penal Code

By: Soumya Verma

Chapter IV of Indian Penal Code

Insanity is one of the defenses available in the Indian Penal Code mentioned under General Exceptions Chapter IV. General exceptions are those exceptions which are mentioned separately under the Code which a person can take to defend his case. These exceptions acts as a shield to protect the defendant under certain circumstances given from S.76-S.106. An offence when fall under these circumstances becomes no offence. The word offence means anything punishable by Indian Penal Code or under any special or local law. A separate chapter has been dedicated to sum up all the exceptions that makes the defendant non guilty in a case, so that repetition is avoided in every section. All the sections of Indian Penal Code have to be read along with these general exceptions mentioned under Chapter IV.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Therefore these exceptions form a part of every offence, but the burden of proof is on the defendant who claims that his case falls under any of these exceptions in the court of law. We can categorically divide the exceptions under seven heads:

  1. Judicial Acts (S.77, S.78)
  2. Mistake of fact (S.76, S.79)
  3. Accident (S.80)
  4. Absence of Criminal Intent (S.81-86, S.92-94)
  5. Consent (S.87, S.90)
  6. Trifling Acts (S.95)
  7. Private Defense (S.96-106)

Till the time accused does not comes up with any of these defenses that run from S.76-S.106, the court shall presume non existence of such circumstances. When the evidence produced by any of the parties, whether prosecution or defense suggests that facts of the case falls under any of these exceptions, then the presumption of not considering the case falling under any of the general exceptions will be removed and the Court shall consider and decide on the facts and circumstances of the case and evidences products that the general exceptions will apply or not. Investigating officer of a case has to investigate a case keeping in mind all the general exceptions and decide whether an offence has actually been committed or it amounts to a no offence. The burden of proving a case has to be beyond reasonable doubt.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Introduction to Insanity as a Defense

An act or omission in order to be a crime must satisfy two conditions of being a guilty act done with a guilty mind. This is what we mean by the term “Actus Non Facit Reum Nisi Mens Sit Rea” which is, an act does not make a person liable till the time it is done with a guilty mind. Both gulity act and intention to do that guilty act has to be there. Insanity comes within the general exceptions because it is a mental state which makes a person unfit to be in his cognitive faculties or to understand the probable consequences and nature of the act which he/she is doing. To be benefitted by this exception on has to insure that insanity should be of such an extent that it makes the accused completely incapable of knowing the nature of the act. If a person acts insane sometimes and the other time he understands the nature of what he is doing, then in  that case the Court will decide on the facts and circumstances of the case whether he was capable of knowing the consequences and nature of the acts when he committed it or not. Or in words we can say whether he was insane or not at the time of commission of the offence.

(S.84) ” Nothing is an offence which is done by a person who, at the time of doing it, by reason of unsoundness of mind, is incapable, of knowing the nature of the act, or that he is doing what is wrongor contrary to law.”

McNaughten Rule

Defense of insanity was developed in England in a case of R v. Daniel Mc Naughten decided y the House of Lords. In this case Mc Naughten killed the secretary of the Prime Minister of England believing him to be the Prime Minister as he consider the Prime Minister responsible or all his problems. So while he went to kill the Prime Minister, his secretary was killed by mistake. When McNaughten was being tried by the court he showed records of his mental condition before the court and pleaded insanity to be the cause of his action. His plea was accepted and he was not found guilty. This issue was discussed in the House of the Lords and a set of rules was laid down famously known as the Mc Naughten Rules to decide the culpability of an insane person.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

From the rules laid down we can conclude that:  Law presumes every person to be reasonable and sane, to know the law of the land and the consequential result of his act. In case of insanity, human beings deviate from this ordinary presumption and therefore the burden to prove his extraordinary mental condition of insanity is on him. Loss of reason has to there at the time of commission of the offence and such loss should be of such an extent that made the accused fully unaware of the nature and quality of the act in question.

Following are main points of Mc Naughten Rules:

  • Every man is to be presumed to be sane and to possess a sufficient degree of reason to be responsible for his crimes, until the contrary be proved.
  • An insane person is punishable “if he knows” at the time of crime. To establish the defense of insanity, the accused, by defect of reason or disease
  • Of mind, is not in a position to know the nature and consequence, the insane person must be considered in the same situation as to responsibility
  • As if the facts with respect to which the delusion exists were real
  • It was the jury’s role to decide whether the defendant was insane.

Types of Insanity

There are two kinds of insanity Legal and Medical. Legal insanity is the only focus of the court of law and attracts the defense of Section 84 while medical insanity is not to be taken in account by the court. Legal insanity means a state when a person does not understand the nature of the act his is doing. While medical insanity could be of many kinds like an odd behaviour because of not proper functioning of the brain, or a weak intellect etc. will be treated by a medical practitioner as insanity but the court will not consider these as a valid defense under S.84 till the time it satisfies the criteria of legal insanity.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

We do not use the word ‘insanity’ under the Indian Penal Code, but unsoundness of mind which is equivalent to insanity. During investigation, the investigating officer has to subject the accused to medical examination in cases where a previous history of unsoundness of mind of accused is there, so that his current mental position could be fairly judged. This will help the prosecution to strengthen his case. In cases where there is a medical history of insanity, there will be no exemption given to the defendant  from the burden of proof because he needs to specifically prove his claim that the act is question was committed under insanity, and just the fact that there is medical history of his insanity will not serve his claim.

Time of Commission of Offence Matters

Time of commission of offence becomes the most crucial point, as it is during this time that the accused person’s mental condition is to be judged. Not knowing the nature of the act or in cases where he knows the nature then not knowing whether it is wrong or contrary to law will be looked upon to apply S.84. behaviour of the accused immediately before and after the commission of the offence becomes important. In case the accused committed the murder over a trifling matter is not a ground to claim insanity.

In cases where a person becomes insane and sane at certain intervals, then the time of commission of the said offence becomes all the more important because he can commit the offences during the time he was sane and had full knowledge of his act.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Unsoundness of Mind

Unsoundness of mind can be from the time of birth or arising out from a disease later. In case where a person killed his sleeping  friend by cutting off his head thinking that it would be fun to see when he will wake up and find his head back, we can say that such act was done under unsoundness of mind. But in case where a man sacrificed his son to the deity believing that it will bring good luck to his family, cannot be said to be done under unsoundness of mind because he had full knowledge of what he was doing and its nature because he was expecting good fortune in return of such act. Which means he was fully aware about the nature and consequences of the act. In case muder is done in a sudden impluse and no pre determined motive and intention to kill, will not treated as unsoundness of mind. Just because it was done in a sudden span of time and not by a proper motive and plan does not matter, it will not be the same as a fit of insanity.

Case Laws

Hari Kumar Gond v. State od Madhya Pradesh[1], In this case Supreme Court held that there is no exact definiton of unsoundness of mind given in IPC. We generally treat it to be equivalent to insanity, but even insanity is not defind in law. It could be said to widely cover various degrees of mental disorders. So every mentally ill person cannot be said be be legally insane. A distinction is necessary between mental insanity and legal insanity. Court is concerned only with mental insanity and not legal insanity.

In case of Ratan Lal v. State of Madhya Pradesh[2], Court established that the crucial point of time at which the unsound mind should be proved is the time when the offence was committed and whether the accused was in such a state of mind as to be entitled to benefit from Section 84 can only be decided from the circumstances that preceded, attendant and subsequent to the event that may be relevant in determining the mental condition of the accused ast the time of the commission of the offence but not those remote in time.

Conclusion

According to my view, the concept of insanity we follow in our country suits our needs. There are different concepts that we do not apply in India and it might be included in our laws as the time suggest. We should trust our Parliament and Law Commission to come up with what is better for us at the right point of time. Presently it would be better if we have a concrete defition of the term ‘insanity’ or ‘unsoundness of mind’ as it would highlight the diffrence of understanding that court and medical experts have over the same word. It would also reduce the misuse of this exception.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

[1] (2008) 16 SCC 109

[2] JT 2002 (7) SC 627

Categories
Blog China

Civil Courts System in China and their Jurisdiction

By: Siddharth Sutaria

INTRODUCTION TO CHINA’S LEGAL SYSTEM

The government defines the People’s Republic of China (PRC) as a “socialist legal system.” Despite the official definition, however, China’s legal system is based primarily on the Civil Law model. The Constitution of the People’s Republic of China is the highest law within China. People’s Republic of China (PRC) adopted the current version in 1982 with further revisions in 1988, 1993, 1999, and 2004. There are four levels of the court system in China: the grassroots, intermediate, higher and supreme people’s courts, and special courts such as the military, maritime, railway and forestry courts.

CIVIL PROCEDURAL LAW

When the People’s Republic of China was established on October 1, 1949, to establish a clear boundary between the new socialist state and the old capitalist society, it abolished everything under the Kuomintang government, including the Republican legal system, which oriented from civil law system but not fully integrated into the general law or official Chinese customs. Before 1954, when the Constitution and Organic Law of Courts were drafted, China’s judicial system had long been used as a tool to fight the enemies of the new government, including political and criminal forces. In civil disputes where no “enemies” were prominent, they could be resolved mainly by the neighboring community (an independent organization led by the Chinese Communist Party), prominent dignitaries nearby or party leaders in the area. Even those civil cases that went to Court, involving mainly property disputes from the Agrarian Reform, divorce disputes and personal injury claims, would also be handled rather than dismissed by a judge. Formal trials were rare, and judges ignored judgments as a matter of procedure. The situation of “civil unrest” became worse during the Cultural Revolution when legal leadership prevailed.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

The rise of civil reconciliation continued until 1982 when the Civil Procedure Law of the People’s Republic of China (Trial Implementation) (“1982 Civil Procedural Law”) was finally enacted. Although the Act still emphasized reconciliation, it required a judge to enter a judgment in time if the parties failed to reach an arbitration agreement (Art. 6). In 1991, a new Civil Procedure Law was issued as the first and, to this day, the end of the Chinese code of conduct (“1991 Civil Procedural Law “), replacing the 1982 code. The new regulation has enormously strengthened the protection of the parties’ rights and the court authorities’ limitations. Given the nature of the party’s status (Art. 13), the parties have been given the right to appeal against the Court’s decision to arbitrarily dismiss and abuse the power (Art. 140), and to limit the abuse power’s appeal within the parties’ request (Art. 151). The 1991 Civil Procedural Law also reduced the importance of reconciliation by emphasizing the commitment and legitimacy of reconciliation (Art 9). Along with the Civil Procedural Law beating in 1991, there was a legal reversal by the Supreme Court of the People (“SPC”) and was widely involved by experts. Starting with the transformation of the trial process, introducing western policy concepts to Chinese legal justice, such as party submissions, party status, the enemy system and the burden of proof.

SCOPE OF CIVIL PROCEDURAL LAW

According to the Civil Procedural Law, civil disputes in China have been defined as disputes over rights and obligations arising from property, personal injury or family matters between equal parties (Art. 3). The limitation of the extent of conflicts and the emphasis on party equality are used to distinguish disputes “in administrative disputes.” Such segregation is due to the dual nature of public and private law and administrative law’s existence.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

COURT STRUCTURE IN CHINA

According to the Constitution of the People’s Republic of China of 1982 and the Organic Law of the People’s Courts that came into force on January 1, 1980, the courts in China are divided into a four-level court system (Supreme, High, Intermediate and Basic):
• At the top-most level is the Supreme People’s Court (SPC) in Beijing, the premier appellate forum of the land and Court of last resort, that supervises the administration of justice by all subordinate “local” and “special” people’s courts. It has also set up six circuit courts seat outside of the state capital, which act in the same capacity, to hear cross-provincial cases within respective jurisdiction.
• Local people’s courts—the courts of the first instance—handle criminal and civil cases. These courts make up the remaining three levels of the court system and consist of “high people’s courts” at the level of the provinces, autonomous regions, and special municipalities; “intermediate people’s courts” at the level of prefectures, autonomous prefectures, and cities; and “basic people’s courts” at the level of autonomous counties, towns, and municipal districts.
• Courts of Special Jurisdiction (special courts)- These courts comprise of Military Courts (military), Railway Transport Court of China (railroad transportation) and Maritime Courts (water transportation), Internet Courts, Intellectual Property Courts and Financial Court (Shanghai), Except for the Military Courts, all other courts of particular jurisdiction fall under the general jurisdiction of its respective high Court.

In China, judges at different court levels are regulated separately by various election, examination, and removal doctrines. According to the Judge’s Law, except for military courts, their judges will be determined by the National People’s Congress and Standing Committee of National People’s Congress, the presidents of other courts are all determined by the general assembly at the same administrative district, and the other judges are appointed according to the committee There are no rules on who has the right to nominate candidates and how to nominate them. Qualifications for a judge of all courts are the same: a Chinese nation, for more than 23 years, compliance with the Chinese Constitution, promising political and professional quality, good morals, and good health (Art. 9). Examination and evaluation of a judge is taken up by the Court in which the judge is present (Art. 21). The Court will establish a commission of inquiry and evaluation of judges (Art. 48), chaired by a Court’s presiding judge (Art. 49).

BASIC PRINCIPLES OF CIVIL PROCEDURE

The basic principles of the civil procedure are all regulated in the Civil Procedural Law. They are the principle of equal litigation rights (Art. 8), the principle of full argument (Art. 12), the principle of party disposition (Art. 13, para. 2), the principle of court’s conciliation (Art. 9), the principle of good faith (Art. 13), the principle of receiving supervision from the Supreme People’s Procuratorate (Art. 14), and the principle of direct hearing.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

The principle of equal litigation rights is considered as an embodiment of Art. 33 of the Constitution, which provides that “citizens are all equal in front of the law.” Art. 8 of the Civil Procedural Law claims that “all parties of the civil litigation shall have equal litigation rights. The people’s courts shall, when adjudicating civil cases, guarantee and facilitate all parties to exercise their litigation rights, and apply the law equally to all parties.”

The principle of full argument in China is different from the doctrine of adversary trial. It only ensures the parties’ right to make argument in trial (Art. 12), but does not request the court’s fact finding to be bound by the parties’ claims and evidence presented during the argument.

The principle of party disposition is controlled by category. 2, Art. 13 allows entities to relinquish their civil rights and court rights within a statutory jurisdiction. The principle of court reconciliation is a separate principle of the Chinese civil process. It shows the important role of reconciliation in the courts. Art. 9 asks the court to make amends in accordance with the voluntary principles and legitimacy. To avoid endless conciliation and delays in litigation, the document requires that the court make a decision as soon as possible if mediation agreements are not reached. Under this system, conciliation is carried out throughout the public process from the prosecution to the enforcement stage, from the initial proceedings to the sentencing proceedings.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

The principle of good faith is a new framework introduced by the 2012 amendment to the 1991 Civil Procedural Law to prevent the over-growth of false statements, fabrication of evidence, prosecution of consolidation and serious misconduct. The concrete use of this system, however, still needs to be studied and tested in practice.

The principle of receiving supervision from the Supreme People’s Procuratorate emphasizes the role of the Supreme People’s Procuratorate as the judiciary. Prior to the 2012 amendment, the CIVIL PROCEDURAL LAW’s provision of this policy was that “the human rights authority has the authority to administer justice in the judiciary,” limiting sentencing during sentencing. The 2012 amendment transformed it into a “public administrator with the mandate to administer the law in relation to law enforcement,” with the aim of imposing enforcement on Supreme People’s Procuratorate administration.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

The principle of direct hearing is not explicitly regulated in Civil Procedural Law. However, it was presented with concrete provision at the trial. For example, Art. 68 provides that the evidence shall be presented and examined by the parties to the court; Art.72 provides that any business or person who knows something about a case has a duty to testify in court; Art. 139, paragraph. 2 provides that with the consent of the court, parties may cross-examine witnesses, expert witnesses, and inspectors in court. In practice, however, the principle of direct hearing is not very effective. In China, each court has a judicial committee.

JURISDICTION OF CIVIL COURTS

The jurisdiction of the courts in China mainly concerns the jurisdiction by level courts and the jurisdiction of the territories. “Jurisdiction at the level of the courts,” meaning that a certain level of court has jurisdiction over a particular case, depending on the value of the case and the influence of the case. According to the CPL, the basic human court will have jurisdiction over cases that are not within the jurisdiction of the human courts at other levels (Art. 17); the middle court shall have jurisdiction over serious cases involving foreign affairs, cases with a substantial impact on the jurisdiction of the jurisdiction, and cases under jurisdiction of the internal courts as determined by the Supreme Court of the People (Art. 18); high courts will have jurisdiction over cases that have a significant impact on their jurisdiction (Art. 19); The People’s High Court will have jurisdiction over cases that have far-reaching consequences, and cases that the Supreme Court of the People’s Court considers to be a separate matter (Art. 20).

Location does not appear to be a problem in the legal case in China and is not addressed under the CPL. However, when a power dispute arises between two courts, one of which could be a fair hearing, the opposing courts must first try to resolve the dispute.[1] If the consultation fails, it will be necessary to summon a higher court with jurisdiction over both contestants to elect this forum.[2]

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

In China, unlike in the United States, there is no federal-state distinction, but there is only one court system. As a result, there is no problem with the top authorities in China. Each of China’s major cities,[3] except for Beijing, Shanghai, and Tianjing, which are state-of-the-art metropolitan cities, have with two levels of court: the basic level court and the intermediate level court. The provincial high court presides over both the lower courts.[4] As in the United States, above the provincial high court, the one Supreme Court in Beijing presides over all Chinese courts.

Generally, a foreign action must be filed in a basic level court.[5] The action may also be instituted in the intermediate court if it is considered “essential,” where it may have a significant impact on the region of the intermediate court, or where the Supreme Court authorizes the central court to exercise original jurisdiction.[6] Each provincial or municipal court can also exercise its jurisdiction if the case has a significant impact on the province or its municipality.[7]

The Supreme Court has exercised its first and only authority in Chinese history, the trial of the so-called “Gang of Four and Lin Biao CounterRevolutionary Clique” in 1980. A major influence in the whole country, or where the Court believes that the conditions were otherwise appropriate in order to exercise original jurisdiction.[8]

In China, a court that has accepted the case may refer a case sua sponte to other courts if it finds that the case is beyond its control. It will refer the case to a public court that has jurisdiction over the case. Such transfers, however, can be used only once. The People’s Court where the case is being heard will accept the case and will not refer the case to a third party without permission even if it considers that the appeal is not within its jurisdiction. It will report to the high court of the wrong place and wait for the high court to appoint the appropriate lower court to exercise the power. Appointment of jurisdiction in a high court may also occur when a jurisdictional court is unable to exercise jurisdiction for a specific reason, or when a dispute over jurisdiction over civil jurisdiction is not resolved through consultation.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

Territorial jurisdiction refers to jurisdiction over cases arising in or involving persons residing within a defined territory. In China, the establishment of territorial jurisdiction is based on the defendant’s domicile, subject to certain exceptions. According to the CPL, the doctrine of jurisdiction may change from the defendant’s domicile to the plaintiff’s domicile when the defendant is in custody; the defendant of a personal status case is not in China or missing; the defendant’s household registration is cancelled;8 or the defendant’s domicile is not as clear as the plaintiff’s domicile in maintenance cases and divorce cases (Arts. 6, 22). In tort and contract cases, parties are given more jurisdiction choices. Besides courts that are located where the defendants have their domiciles, courts that are located where facts of the case occur have the authority to hear the case as well (Arts. 23, 28). In addition, the jurisdiction over certain types of disputes is specially regulated in law to exclude the domicile doctrine. Such disputes include real estate disputes, port operation disputes and inheritance disputes. The jurisdiction of these disputes is exclusive and cannot be changed by jurisdiction clauses. For real estate disputes, they shall be under the jurisdiction of the court located in the place where the real estate is located (Art. 33 (1)); for disputes concerning harbor operations, they shall be under the jurisdiction of the court located in the place where the harbor is located (Art. 33 (2)); for inheritance disputes, they shall be under the jurisdiction of the court located in the place where the decedent had his domicile upon his death, or where the principal portion of his estate is located (Art. 33 (3)).

Defendant, on or before the last day of his or her appeal, may lodge an appeal against the dismissal of the case against him or her due to lack of court authority on his or her behalf. Power opposition can only focus on power in the first court. The jurisdiction of the appellate court is determined by which court becomes the first court, and the parties have no right to challenge the appellate authority. A power objection will be determined by the decision and may usually be appealed unless it is a small claim procedure.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

CONCLUSION

Keeping its own modem of the legal process is a major undertaking in China where li traditionally overcoming fa and “law” was considered a reference only to criminal law. Indeed, according to China’s official guarantee, since the announcement of the CPL, China’s legal system has been in place. With detailed guidance on various civil laws, their use rules and many local regulations, an outsider or business appears to have better guidance on how to do and do business in China. The civil procedure law of China is undoubtedly still in its initial stage of development. The government and the society are gradually accepting the modern concepts of procedure law, and the Chinese legislation keeps learning from western institutions.

Learn more about Civil Laws with Enhelion’s Online Law firm certified Course! 

[1] Art. 37

[2] Id.

[3] In China, a city administratively governs the surrounding counties.

[4] Again, Beijing, Shanghai, and Tianjing, each being equivalent to a province, all have high courts

[5] CPL art. 18.

[6] Art. 19

[7] Art. 20

[8] CPL art. 78 also see arts. 77, 79-84 (detailing the requirements for service of process)

 

 

Categories
Blog

New MCA Rules make Cryptocurrencies, Benami, and Loan Disclosures mandatory

By: Muskan Sharma

 

The Central Government amended Schedule III of the Companies Act, 2013 (hereinafter referred to as “Act”), which shall be applicable from April 1, 2021. The Amendment was a result of the powers conferred on the Central Government under Section 467 of the Act.

The Amendment provided that the disclosures of the loans or advances granted to the promoters, directors, KMP (Key Managerial Personnel), and related parties shall be made. The Amendment puts more emphasis on widening the scope of audit reporting. It provides that the company must use accounting software for maintaining its books, that facilitates the recording of audit trail of every transaction.

The MCA (Ministry of Corporate Affairs) via the Amendment in the rules, further provided that in respect of proceedings pending or initiated against the company for any Benami property under the Benami Transactions (Prohibition) Act, 1988, the company must make the following disclosures:

  1. Details of such properties.
  2. Beneficiaries and their details.
  3. If the property is mentioned in the books of the firm, then reference to concerned item no. in the Balance Sheet.
  4. If there is no reference of such property in the books of the firm, then facts along with reasons.
  5. When the company is an abetter or a transferor in the proceedings, then concerned details.
  6. Nature of Proceedings, Status (Pending/Completed) of Proceedings, etc.
  7. Company’s view on such proceedings.

Apart from these, the MCA (Ministry of Corporate Affairs) further provided that if the company has traded in cryptocurrency (Bitcoin) or any virtual currency, then it must disclose:

  1. Profit or loss on the transaction involving cryptocurrency or virtual currency.
  2. The total amount of currency held by the company, as on the reporting date.
  3. Deposits or Advances to/from any person for trading in cryptocurrency or virtual currency.

The RBI has also announced that it will soon launch its cryptocurrency in the financial market. Apart from this, a bill titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ will be introduced soon by the Government. Therefore, it can be interpreted that after the Supreme Court’s decision in Internet and Mobile Associaton of India v. Reserve Bank of India[1], the Central Government is making efforts to recognize the digital currency market and boost the performance of India in the global financial market.

The Amendment will consequently make the corporate governance more transparent by ensuring fair procedural compliances to be followed by the companies.

 

[1] Writ Petition (Civil) No. 528 of 2018

Categories
Blog Criminal Law

Death Penalty in USA

By: Muskan Sharma

Death Penalty/Death Sentence/Capital Punishment is a state-sanctioned method of homicide in response to the commission of an offence. Death Penalty owes its origin to the Code codified by King Hammurabi of Babylon. In this code, Death Penalty was a punishment for 25 crimes.

At this moment, different nations use the following methods to execute death penalty on convicted persons:

  1. Hanging
  2. Lethal Injection
  3. Shooting
  4. Electrocution
  5. Beheading
  6. Gas inhalation

Earlier, violent methods like burning alive, disembowelment, blood eagle, back-breaking, crushing by animals, brazen bull, poison, suffocation, slow slicing were used. However, the practice of executing death penalty evolved over the time and less violent methods dominated over such inhuman methods. But the practice of death penalty, no matter the method of execution, is an inhuman act in itself.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Death Penalty v. Human Rights

There is a constant debate whether death penalty is violative of the concept of Human Rights? Some countries have abolished death penalty for being violative of the right to life and dignity whereas other countries do not abolish death penalty believing it has no connection with human rights.

However, in the USA, the concept of human rights is a little alien. In the USA, ‘Civil/Constitutional Rights’ have force, which focuses on securing equality to different groups. Hence, death penalty is not considered as violative of human rights within the territorial limits of the USA.

History of Death Penalty in USA

In England, Death Penalty was a punishment for numerous offences including petty offences like picking pockets or stealing bread. During the 1800s, around 270 offences were punishable with death penalty in England. Michigan abolished death penalty as a punishment in 1845. Later, Wisconsin also adopted the same approach in 1848. Therefore, both England and the USA reduced the number of capital offences and centred their focus on first-degree murders. Public executions also decreased gradually with time.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Death Penalty for Murder

The USA started doing away with the death penalty as a punishment in the 1950s and 1960s due to public protests against the same. As a result, no execution took place between 1968 and 1976 in USA. One of the landmark cases in the history of death penalty in the USA is Furman v. Georgia[1].

Furman v. Georgia, 408 U.S. 238 (1972)

Facts: The resident woke up in the middle of the night and found Furman committing burglary in the house. During the trial, Furman said that while escaping, he tripped and the weapon fired accidentally which resulted in the death of the victim. Since the weapon was fired during the commission of a felony, Furman was guilty of murder and therefore, subject to death penalty under the then existing laws. Though he was sentenced to death penalty, the same was never executed.

Decision: The Court, with a ratio of 5:4 held that death penalty is a cruel and unusual punishment and violative of the Constitution.

US Supreme Court’s decision in Furman case motivated almost 35 states to modify their laws concerning death penalty. However, two different approaches were adopted to modify the laws while abiding by the suggestions provided in the Furman case.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

In the first approach, the state described which offences are punishable with death penalty along with mitigating and aggravating circumstances. A convicted person can only be sentenced to death penalty if the aggravating circumstances weighed more than the mitigating circumstances. This approach was adopted by Georgia, Texas, and Florida.

In the second approach, the state merely prescribed which offences are punishable with death penalty. Death penalty was mandatory in such prescribed offences and the Court did not need to consider mitigating or aggravating circumstances. This approach was favoured by North Carolina and Louisiana.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

However, another case named Gregg v. Georgia[2] again proved to be a landmark judgment in the jurisprudence of death penalty in USA.

Gregg v. Georgia, 428 U.S. 153 (1976)

Facts: The defendant committed two armed robberies and two murders. Based on the amended laws, the Court heard the matter using the bifurcated procedure. The Georgia Supreme Court came to the conclusion of conviction and awarded death penalty for murder but vacated death penalty for armed robbery. In this case as well, the issue before the Court was whether a law that enables the Court to award death penalty is violative of the Constitution.

Decision: The Supreme Court observed that death penalty does not violate the Constitution. Courts cannot completely do away with the punishment of death penalty and that the statutes ensure that while awarding death penalty, the Court considers the circumstances of the offence, character of the offender, procedure to be followed.

Therefore, in Gregg v. Georgia[3], the decision of Furman case was overruled. US Supreme Court, via the decision in Gregg v. Georgia[4] held that death penalty is not violative of the Constitution. In this case, the Supreme Court went further and observed that the mandatory death penalty approach adopted by North Carolina and Louisiana’s statutes is unconstitutional. Thereafter, legal executions started again but at a slow pace. Only 50 death sentences were executed between 1977 and 1985.

However, one issue pending for a ruling was whether the punishment of death penalty was applied equally. The same was answered in McCleskey v. Kemp[5].

McCleskey v. Kemp, 481 US 279 (1981)

Facts: Warren McCleskey was convicted for committing two robberies and one murder. He was an African-American and he murdered a White Police Officer during the course of one of the robberies. He was sentenced to death penalty due to two aggravating circumstances: first, he committed the murder during the course of a robbery, and second, the victim of murder was a Police Officer engaged in the performance of his duties.

McCleskey preferred an appeal to the Federal Court and based his claim on a study performed by David Baldus, Charles Pulaski, and George Woodworth. The study depicted that the process of awarding death penalty was discriminatory i.e. individuals who murdered whites were likely to be sentenced to death penalty.

Decision: The Court disregarded the statistical study on the ground that it contained no substantial evidence that may justify the reversal of his conviction. The Court concluded that the conviction was right and the lower court applied the Georgia Law properly.

Death Penalty to Juvenile Offenders

After McCleskey v. Kemp[6], another landmark decision was put forward by the US Supreme Court in Roper v. Simmons[7].

Roper v. Simmons, 543 US 551 (2005)

Facts: Simmons (17-year old boy), along with his two friends Benjamin and Tessmer, made a plan to murder Shirley Crook. He planned to break into the house of the victim, commit a burglary, and kill him. However, Tessmer withdrew from the plan at the last moment. Benjamin and Simmon tied her up, covered her eyes, drove her to a state park, and then threw her off from a bridge. Simmon himself confessed to the murder.

Simmon was, therefore, convicted under the charge of murder. He moved to the trial court for setting aside the conviction on grounds of his age, impulsiveness, and troubled background. The trial court rejected his contention. The appeal went to the Supreme Court of Missouri and it concluded the case by awarding life sentence to Simmon with no parole. The decision of the Supreme Court of Missouri was based on the ground that death penalty awarded to juvenile offenders is violative of the eighth amendment of the constitution.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

It was further appealed to the US Supreme Court.

Decision: The US Supreme Court held that awarding death penalty to an offender, who is below 18 years of age, is violative of the Constitution. This decision also overruled Stanford v. Kentucky[8] in which the court upheld the awarding of death penalty to offenders at 16 years of age or older than that.

Rape and Death Penalty

The US Supreme Court in Coker v. Georgia[9] held that death penalty awarded consequent to the rape of an adult woman is unconstitutional i.e. violative of the eighth amendment to the Constitution.

Coker v. Georgia, 433 US 584 (1977)

Facts: Ehrlich Coker escaped prison while he was serving multiple sentences for his conviction for rape, kidnapping, and murder. He broke into a house, raped the woman present in the house, and then stole the vehicle. He was convicted of rape, armed robbery, and other petty offences.

Decision: He was awarded death penalty for committing rape because of two aggravating circumstances, the first being prior conviction for capital offences, and the second being the commission of rape during an armed robbery. The Georgia Supreme Court upheld the death penalty.

But the US Supreme Court held that even though the rape was committed by a hardened offender during the course of another offence, it did not lead to the murder of the victim. It was observed that rape involves injury, physical and psychological, but the injury is not of serious nature. Therefore, the US Supreme Court overturned the death penalty awarded to Coker.

The question whether death penalty should be awarded for raping a child or not is answered in Kennedy v. Louisiana[10].

Kennedy v. Louisiana, 554 US 407 (2008)

Facts: Kennedy was convicted for the offence of raping his minor step-daughter causing serious injuries to her private parts. The Trial Court convicted him for the offence of rape and sodomizing a minor. Death penalty was awarded to him consequently.

On appeal, the Louisiana Supreme Court affirmed the conviction as Louisiana’s statute on Child Rape authorized death penalty.

Kennedy rested to appeal before the Supreme Court of the United States of America invoking the Eighth Amendment of the US Constitution. Eighth Amendment prohibits unusual and cruel punishments or excessive punishments through criminal sentences.

Decision: The US Supreme court reversed and remanded the case to the lower court for resentencing. The Court further observed that it is unconstitutional to impose death penalty for the crime of raping a child when the victim does not die and death was not intended.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

International Law on Death Penalty

The Second Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR) was adopted by the UN General Assembly, with the aim to abolish death penalty. It has 89 State parties.

Article 1 of the Optional Protocol provides that no person shall be executed within the jurisdiction of any of the State parties to the Optional Protocol.

Article 2 is an exception to what is stated in Article 1 and provides that the State party, may, at the time of accession or ratification, communicate the need for reservation for application of death during wartime. A State party may communicate the need for such reservation only for serious offences of military nature and further, let the Secretary-General know about the provisions concerning warfare within its national legislation along with the beginning and end of a state of war.

Articles 3, 4, and 5 further provide for the wide ambit of powers of the Human Rights Committee with respect to the State parties’ obligations towards the Second Optional Protocol.

Why Death Penalty needs to be abolished?

Abolition of Death Penalty or Capital Punishment in the USA is the need of the hour for the following reasons:

  1. The scheme for awarding death penalty to a convict is used in a discriminatory manner. A black or a person of colour is more likely to get death penalty as compared to a white. Also, it depends a lot on the net worth of the party, the attorneys they are financially capable of hiring, and the place where the offence was committed.
  2. Death Penalty, in its entirety, failed to serve the purpose of its existence. Death Penalty existed as a method of punishment based on the deterrent theory of punishment. However, numerous surveys have proved that death penalty was not effective in reducing the number of crimes being committed. Therefore, the deterrent theory of punishment needs to be disregarded in totality. Instead, the Rehabilitative theory of punishment must be considered by Judges and Magistrates while awarding punishments to convicted persons.
  3. Death Penalty is in itself a cruel and inhuman act. It is violative of the Right to Life and Dignity available to every person in this world. Death Penalty is a relic of early criminal codes and has no place in a country that considers the security of human rights as its top priority.
  4. Death Penalty is the abuse of due process of law. A statute that prescribes death penalty as a punishment for any offence, enables Judges and Magistrates to take the life of a person in the name of due process of law.
  5. Death Penalty is further violative of the maxim ‘audi alteram partem’ to an extent as the person who is executed, did not get the fair opportunity to represent himself before the Court and justify the reversal of his conviction.
  6. The International Law regime also does not support death penalty. Death penalty, as a punishment in the national legislations, disregards the Second Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR). Though the USA is not a party to the Second Optional Protocol, it will be in the interest of its citizens and will display its commitment to secure human rights within its territorial jurisdiction.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

Conclusion

Death Penalty is nothing less than State-sponsored terrorism. Judges and Magistrates are the authorities responsible to ensure the smooth conduct of State-sponsored terrorism in the name of death penalty.

It’s high-time that all states in the world must become party to the Second Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR) and denounce the use of death penalty. Death Penalty deserves to be denounced also on the ground that it is cruel and inhuman.

Death Penalty, as a practice, is violative of the basic Right to Life and Dignity. Furthermore, it has served no useful purpose. Awarding death penalty did not work according to the deterrent theory of punishment. It did not aid in reducing the number of crimes being committed.

Learn more about Criminal Laws with Enhelion’s Online Law firm certified Master Course! 

 

 

[1] 408 U.S. 238 (1972)

[2] 428 U.S. 153 (1976)

[3] Ibid.

[4] Ibid.

[5] 481 US 279 (1981)

[6] Ibid.

[7] 543 US 551 (2005)

[8] 492 U.S. 361 (1989)

[9] 433 US 584 (1977)

[10] 554 US 407 (2008)

Categories
Blog

Analysis of Indirect Tax Laws in India, U.S.A & U.A.E

By: Vedika Arora

Indirect Tax Laws In India –

Introduction –

 The Indirect taxes in India comprises a gathering of assessment laws and guidelines. The roundabout duties in India are authorised upon various exercises including assembling, exchanging and imports. Indirect tax impact all the business lines in India. Charge imposed by the State on utilisation, consumption, advantage, or right however not on pay or property. The roundabout assessment framework in India has gone through broad changes for over twenty years. Quite possibly the main explanations behind ongoing expense changes in many creating and momentary economies has been to advance a duty framework to meet the prerequisites of worldwide rivalry.

Features of Indirect Tax Laws –

 An indirect tax is one in which the weight can be moved to other people. The tax payer isn’t the tax carrier. The effect and occurrence of indirect taxes are on various people. An indirect tax is exacted on and gathered from an individual who figures out how to give it to some other individual or people on whom the genuine weight of tax falls. For instance ware taxes or deals tax, extract obligation, custom obligations, and so forth are indirect taxes.

Advantages of Indirect Tax Laws –  

1- Advantageous: Indirect taxes are forced on creation, deal and developments of products and enterprises. These are forced on producers, merchants and dealers, however their weight might be moved to buyers of products and ventures who are the last taxpayers. Such taxes, as greater costs, are paid distinctly on acquisition of an item or the pleasure in an administration. So taxpayers don’t feel the weight of these taxes. Also, cash weight of indirect taxes isn’t totally felt since the tax sum is really covered up in the cost of the product purchased. They are additionally advantageous on the grounds that for the most part they are paid in limited quantities and at stretches and are not in one single amount. They are helpful from the perspective of the public authority additionally, since the tax sum is gathered by and large as a single amount from makers or brokers.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

2- Hard to Evade: Indirect taxes have in-constructed shields against tax avoidance. The indirect taxes are paid by clients, and the venders need to gather it and dispatch it to the Government. On account of numerous items, the selling cost is comprehensive of indirect taxes. Thusly, the client has no choice to dodge the indirect taxes.

3- Wide Coverage: Unlike direct taxes, the indirect taxes have a wide inclusion. Larger part of the items or administrations are dependent upon indirect taxes. The shoppers or clients of such items and administrations need to pay them.

4- Flexible: Some of the indirect taxes are versatile in nature. At the point when government feels it important to build its incomes, it expands these taxes. In the midst of thriving indirect taxes produce colossal incomes to the public authority.

5- All inclusiveness: Indirect taxes are paid by all classes of individuals thus they are wide based. Needy individuals might be out of the net of the annual tax, yet they cover indirect taxes while purchasing merchandise.

6- Effect on Pattern of Production: By forcing taxes on specific wares or areas, the public authority can accomplish better portion of assets. For instance by forcing taxes on extravagance products and making them more costly, government can redirect assets from these areas to area creating fundamental merchandise.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

7- May not influence inspiration to work and save: The indirect taxes may not influence the inspiration to work and to save. Since, a large portion of the indirect taxes are not reformist in nature, people may wouldn’t fret to pay them. At the end of the day, indirect taxes are for the most part backward in nature. Subsequently, people would not be demotivated to work and to save, which may expand venture.

8- Social Welfare: The indirect taxes advance social government assistance. The sum gathered via taxes is used by the public authority for social government assistance exercises, including training, wellbeing and family government assistance. Furthermore, exceptionally high taxes are forced on the utilisation of unsafe items, for example, alcoholic items, tobacco items, and such different items. So it isn’t just to check their utilization yet additionally empowers the state to gather significant income thusly.

9- Adaptability and Buoyancy: The indirect taxes are more adaptable and light. Adaptability is the capacity of the tax framework to produce proportionately higher tax income with an adjustment in tax base, and lightness is a more extensive idea, as it includes the capacity of the tax framework to create proportionately higher tax income with an adjustment in tax base, just as tax rates

Indirect Tax Laws in U.S.A –

 Kinds of indirect taxes (VAT/GST and other indirect taxes) –

The United States (US) doesn’t have a public deals tax framework. Or maybe, indirect taxes are forced on a sub-public level. Each state has the position to force its own deals and use tax, subject to US established limitations. In numerous states, nearby purviews (for example urban areas and districts) likewise force deals and use taxes.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

Are there other indirect taxes –

Contingent upon the locale, taxpayers might be dependent upon local charges, extract taxes, media transmission taxes and overcharges, permit to operate duties and unclaimed property-announcing prerequisites.

 What exchanges are dependent upon deals and use taxes –

By and large, exchanges including deals of “substantial individual property” and select administrations are liable to tax. States have changing meanings of unmistakable individual property. Various states additionally tax advanced merchandise (for example advanced sound works, digital books, web based video). Most states limit the tax to administrations explicitly specified by rule. Be that as it may, a couple of states tax practically all administrations.

Who is needed to enrol for deals and use taxes –

Ordinarily, every individual or element that is occupied with the business ― as characterised by the taxing state ― of selling substantial individual property at retail, or outfitting any taxable assistance, should enrol with the state to acquire a business tax permit, grant or testament prior to making deals or offering types of assistance. What includes as taking part in business shifts from state to state.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

States are advancing toward deciding if a dealer is occupied with business in the state dependent on monetary edges, for example, yearly volume of deals or number of exchanges (for example more than 100,000 US dollars (USD) of in-state deals or more than 200 in-state exchanges). This is the consequence of 2018 US Supreme Court choice South Dakota v. Wayfair[1], which overruled a previous court choice disallowing states from forcing a business tax assortment commitment on a dealer except if the merchant had a “actual presence” in the state. Effectively, 24 states will have monetary edges basically by 1 January 2019 and more are relied upon to before long follow.

Indirect Tax Laws in U.A.E –

Introduction –

The United Arab Emirates is an organisation of seven emirates, with self-governing emirate and neighbourhood governments. The United Arab Emirates doesn’t have any government annual tax. An annual tax order has been established by every Emirate, except practically speaking, the implementation of these declarations is confined to unfamiliar banks and to oil organisations.

The UAE government actualized Value Added Tax (VAT) which is also known as Indirect tax in the nation from January 1, 2018 at a standard pace of 5%.

The VAT is value added tax by going into this understanding the GCC nations began forcing VAT at a pace of 5 percent on certain products and ventures. Wellbeing and training are absolved from the VAT. Presently individuals in the GCC need to pay a VAT of 5 % percent on food, vehicles and different excitements.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

In Saudi Arabia and in UAE the VAT framework has begun easily these two nations had just fulfilled the time constraint of VAT settlement in the year 2018 and other part nations are as yet on the run. Bahrain is the solitary GCC nation who had not presented the VAT. Despite the fact that the execution of VAT has been done easily in two nations yet in the business, numerous issues are emerging as they are confounded that how to apply the VAT framework in products and enterprises predominantly in the Free Trade zone of these nations.

 Registration for Indirect Tax in U.A.E –

 A business should enlist for VAT if their taxable supplies and imports surpass the required enrolment limit of AED 375,000. Besides, a business may decide to enlist for VAT deliberately if their provisions and imports are not exactly the required enrolment limit, however surpass the wilful enrolment edge of AED 187,500. Also, a business may enlist intentionally if their costs surpass the wilful enrolment limit. This last chance to enrol intentionally is intended to empower new companies with no turnover to enlist for VAT.

 Sectors in V.A.T implementation –

 Land and development industry are a tremendous significance for the GCC nations since it gives numerous advantages like supporting countless occupations, giving private spots to live which is one kind of revenue for the GCC nations and it additionally builds up an area. By presenting the VAT by GCC nations it doesn’t make any issue to the land and the development fields future venture. It’s a positive methodology by the public authority to make the land and development field to add to the government assistance of the state. Since a huge amount of cash is coming from this field. Supply of land is taxable at a standard rate in GCC.

The Tourism business contributes an immense aggregate to the Gulf economy and it gives numerous occasions to singular visit administrators in the GCC. However, the principle challenge which they face is the way to actualise VAT. This industry is a blend of different areas which incorporates carriers, visit administrators, travel planners, convenience, etc, so by the presentation of VAT in this industry will influence each by either way.

Learn more about GST with Enhelion’s Online Law firm certified Course! 

The oil area assumes a significant part in the Gulf nations. Numerous worldwide oil and gas organisations are in the nations. Business in the area incorporates global, public, and other oil organisations. Tank execution will make an enormous effect on this industry. There is unpredictability in the field of oil and gas industry and by the presentation of VAT in the GCC should be given thought in organisations. Every single industry in the Gulf nations is for sure is influenced by the execution of VAT and the more influenced field is the travel industry since it includes different areas of business.

 

[1] South Dakota v. Wayfair, Inc. 585 U.S138 S. Ct. 2080; 201 L.. Ed. 403

Learn more about GST with Enhelion’s Online Law firm certified Course! 

Categories
Blog

Role of Mergers and Acquisitions in boosting the Indian Economy

By: Vansh Ved

Introduction

Mergers, the amalgamation or blending of two equal-sized companies, or one economically weaker with another stronger, or one holding strong distribution network with a weaker one, or any other possible permutation of two distinct entities coming together to form a whole new identity and corporation. This amalgamation is generally done for either financial purposes or strategic ones. An acquisition on the other hand is a takeover or acquiring of one entity by another which either occurs as a friendly or a hostile transaction. A company takes over majority stake and/or resources of the target company and makes its decisions with the goal to forward the acquiring company’s interests.

A company thinks of merging or acquiring for a plethora of reasons: Growth of the business, Financial inadequacy for bigger operations, monopolizing the market, acquiring patented innovation or technology, or even tax evasions and benefits. A merger or acquisition is generally an expensive process to go through for any party to a merger. Accountancy, taxes, finances, shares, permissions, legalities, dues, etc. are a part of this tedious procedure. Yet, companies choose to merge. The principle of 2+2 = 5 attracts the idea of joining forces and making the best product of the two companies that are doing fairly well but probably not growing. India, has seen a boom of these mergers and acquisitions in the past couple of decades since governments liberalized laws regarding monopolies and restrictive trade practices. The years 2014, 2016 and 2018 particularly stood out in terms of the value of M&A transactions across India. The total value of the mergers in 2018 even crossed the 100-billion-dollar mark.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

Private players, quite obviously look to maximize profits through M&A transactions and it’s been proven statistically that quite often they achieve their goals. But there is another aspect or perspective of viewing this transaction too; the market’s perspective. Not just the market’s perspective, but the timing, the situation, the impact, the share and its future is important for the simple reason that the economy is directly affected by it. We will cover, in this article, the economic analysis of mergers and acquisitions.

The economic perspective of Mergers and Acquisitions

A merger of two giant organizations has either of the two consequences; wiping out of the competition completely, or marginalizing it so much by the power of the two companies’ technology, customer base, financial resources etc. that it goes out of business or enters a lower rung of the competition soon. This monopolization of a market has many consequences of its own too. Price mark ups, price manipulation, complete control over output and supply, and lack of substitutes are a part of the market once a monopoly like situation is established. The corporation and its shareholders might be the ones making the profit but it is generally the consumer who faces the music of such deals. The amalgamated new entity is powerful enough to increase the prices, control the supply as well as the demand as the entire customer base depends on it. However, a monopoly resulting from a merger can also have a positive impact on the costs and finances on which the companies used to function. If regulated by the government through supportive and at the same time, restrictive laws, monopolies can result in efficient production at fair prices, which is a key boosting factor of a country’s economy.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

Mergers can lead to economies of scale, i.e., lower average costs and other cost reductions and benefits which occur as a consequence of large-scale operations which tend to make production more efficient. It can also lead to increased research and operations in the direction of growth of the industry which is enabled by the additional funds generated by the combined profits. It prevents an unprofitable yet potentially strong business from shutting down.

A Merger can also be seen as a transfer of resources. A transfer from one, lesser capable and profitable to the more independent, firm and profitable one. This allocation of resources and avoidance of the wastage of a certain amount of manpower, machinery, product line or even talent, is a highly economical transaction. Some critics of acquisitions say that it “creates” unemployment. This couldn’t be more far from the truth as what is actually happening is that when the target company is on the verge of failing and shutting down completely, the acquirer in fact takes over the control of the target company hence saving the total loss accompanied with a 100% layoff which would’ve taken place had the acquired company been running with the same obsolete resources and weaker financial support.

Apart from a scenario where a merger or amalgamation results in a monopoly, when two good players of the market merge, the competitiveness of the market automatically tenses up. This often results in a drop in prices due to more competition and even higher productivity. Consumers benefit highly due to such a situation. India is going through a phase of unemployment as never seen before. M&A deals can help a corporation grow and set up multiple offices and operations in all parts of India and thus aid in creating more skilled employment.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

A huge potential of the Indian Economy gets wasted when foreign firms enter the Indian markets and acquire Indian companies, through either friendly or hostile takeovers, which are going through a financially and economically tough time. Mergers of two Indian companies or acquisition of a foreign firm by an Indian company can drastically improve the condition and situation of Indian firms in the international markets. Consequently, our position in the foreign exchange also improves due to a bigger market share and more exports, due to better production.

An ideology to keep in mind while counting the benefits of M&A deals is that the Indian Economy is massive in its scale and is always looking for investments in sectors such as textile, agriculture, education, clothing, technology and automobiles. When two firms of the same industry merge, or either one of them acquires the other, it aids in a bigger investment in research and development, technology, machinery and retail (marketing as well as sales). When two corporations from different industries merge or acquire, it is generally purely a search for an investment opportunity and an amalgamation of any type gives the opportunity to find a credible investment which even diversifies their business and enables boosting of the other industry by infusing more capital.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

NBFCs in India are going through a rather difficult time and they are in need of some radical changes. Mergers could help them in several ways, ease in taxation being one of them. A bigger corporation formed as a result of two struggling non-banking companies merging, is a stronger entity, gets tax benefits and has more resources. Mergers can help boost the economy in several ways such as this. In such cases, it is a solution to lack of resources, limited supply and reach and a sort of a legitimate cheat code against heavy taxations.

Types of Mergers and the difference in their impacts

There are several different types of mergers and acquisitions. Conglomerate, concentric, reverse mergers etc., friendly or hostile takeovers and several types of other combinations, like leveraged buyouts, divestitures, consolidations, etc. Some of the best ways to combine businesses are as follows:

Conglomerate mergers:

These mergers occur between two companies whose lines of business are completely different. They run their business in completely different industries and merge or acquire either of them to diversify their line of business for more profit as well as security. In today’s market, the predictability of the success of any industry is close to impossible due to a plethora of factors affecting the market. Hence, having a running business in a whole another area, sometimes proves to be a boon for a single industry business. Reliance Industries as well tata is a prime example of diversification of business through acquiring several companies and growing their outreach as well ensuring profitability in some or the other industry. Such mergers are also a blessing to the economy as it helps entities grow and diversify their business thereby ensuring they do not run out of resources or suffer due to lack of variety in their line of products. It also builds a solid brand name, possibly globally. L&T (an engineering firm) and Voltas (an air conditioning company) is a great example of a conglomerate merger.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

Vertical Mergers:

This type of a merger occurs between two entities working in the same industry per se but at fundamentally different levels. An example of this kind of a merger could be the merger of a clothing brand and a textile factory. This way, the manufacturer and the seller could come together as one and improve the flow and communication of the business. Sometimes, even manufacturers of fast-moving consumer goods acquire a company with a good distribution channel to facilitate a good flow of products and to improve marketing. Vertical mergers are good for the companies merging as well as the economy. They give a sense of stability to a company’s quality, raw material supply and distribution. Reliance (a multi-billion-dollar group of industries) and FLAG Telcom (a communication service provider) is a vertical merger where Reliance acquired the latter to get bigger into the telecommunications business and thus gain a stable source of network transport.

However, some types of mergers have proved to be detrimental for the economy and are rarely encouraged. An example of such mergers is a horizontal merger.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

Horizontal mergers occur between companies operating in the same line of business as well as at the same level in the chain.  A recent example of a merger of this kind is Lipton Tea India and Brooke Bond. An article by Harvard Business review [1] showed that horizontal mergers usually end up creating a monopoly-like market which has more downsides than benefits for the economy.

The review suggests that the effects of a horizontal merger are much more than any other kind. They often lead to price markups which are mostly arbitrary and have a negative impact on fair pricing for the customer base. Statistics have also shown that two firms of the same industry merging have evidently not shown any improvements in either productivity or economy of the market around them.

Case Studies

The most relevant as well as recent merger that helped save two companies and at the same time was effective in improving competition in the Telcom industry in India, was the Vodafone-Idea merger. Vodafone, formerly India’s second largest telecommunications company was under a debt close to 9000 crores in the year 2017. Idea, formerly the third largest player in the industry was also under a huge debt around the same time. The moment Reliance Jio entered the market, both companies were about to lose their assets and were on the verge of bankruptcy. Had they gone bankrupt; it would have created a semi-monopoly like situation for Airtel and Jio. This would have made calling and internet services in India, more expensive than ever. But both companies decided to merge. The Vodafone-Idea merger was valued at about $12.5 billion. This merger avoided a possible monopolistic market from existing and kept in control prices of Telcom services.

Indian firms in the last 5 years have been bold in acquiring several foreign companies, thus growing rapidly internationally too. Byju’s acquired Osmo, OYO rooms acquired the Leisure Group, Zomato took over UrbanSpoon and many other such Acquisitions have taken place recently. Tata Motors’ acquisition of Range Rover and Jaguar was probably one of the most remarkable acquisitions in India’s automobile industry’s history. Tata Motors, a mid-segment car company with adequate finance, took over two premium car brands and put itself back on the map in the automobile industry. Such acquisitions have massively helped in coping with unemployment in this industry. These foreign companies also bring a huge potential for technological development with them.

Learn more about Mergers and Acquisitions with Enhelion’s Online Law firm certified Master Course! 

Conclusion

A good merger can boost the economy of an industry as well as the market in ways it never can. Employment, R&D, increased capital flow, increased returns to shareholders and endless opportunities of growth. Mergers and acquisitions have proved to be a blessing to the companies struggling to stay in the market without totally selling out to the big players who have big pockets. A merger helps raise more capital and hence encourages the longevity of such businesses. All in all, a merger’s positive effects on the Indian Economy, far outweigh the ill effects of it in the long run.

 

[1] https://hbr.org/2016/11/mergers-may-be-profitable-but-are-they-good-for-the-economy