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Evolution of basic structure doctrine in India

This post has been authored by Hiral Chandrakant Jadhav- Panchal

EVOLUTION OF BASIC STRUCTURE DOCTRINE
1.    A.K. Gopalan v. State of Madras (1950)

In the A.K. Gopalan v. State of Madras (1950) case, the Supreme Court interpreted the Fundamental Rights under Part III of Indian Constitution.

In this case, it held that the protection under Article 21 is available only against arbitrary executive action and not from arbitrary legislative action.

This means that the State can deprive the right to life and personal liberty of a person based on a law.

This is because of the expression ‘procedure established by law’ in Article 21, which is different from the expression ‘due process of law’ contained in the American Constitution.

Hence, the validity of a law that has prescribed a procedure cannot be questioned on the ground that the law is unreasonable, unfair, or unjust.

Secondly, the Supreme Court held that ‘personal liberty’ means only liberty relating to the person or body of the individual.

2.     Shankari Prasad v. Union of India (1951)

In this case, the constitutional validity of the First Amendment Act (1951), was challenged.

The Supreme Court ruled that the power of the Parliament to amend the Constitution under Article 368 also includes the power to amend Fundamental Rights.

The word ‘law’ in Article 13 includes only ordinary laws and not constitutional amendment acts (constituent laws).

Therefore, the Parliament can abridge or take away any of the Fundamental Rights by enacting a constitutional amendment act and such a law will not be void under Article 13.

To learn more about the Indian Constitution, enrol for Certificate in Constitutional Law. 

  1. Berubari Union Case (1960)

In this case, the issue was resolved about whether the Preamble is part of the Constitution or not.

According to the Supreme Court, in the Berubari Union case (1960), the Preamble shows the general purposes behind the several provisions in the Constitution and is thus a key to the minds of the makers of the Constitution.

Further, where the terms used in any article are ambiguous or capable of more than one meaning, some assistance at interpretation may be taken from the objectives enshrined in the Preamble.

Despite this recognition of the significance of the Preamble, the Supreme Court specifically opined that the Preamble is not a part of the Constitution.

Therefore, it is not enforceable in a court of law.

  1. Golaknath v. State of Punjab (1967)

In that case, the Supreme Court ruled that the Parliament cannot take away or abridge any of the Fundamental Rights.

The Court held that the Fundamental Rights cannot be amended for the implementation of the Directive Principles.

The Parliament reacted to the Supreme Court’s judgement in the Golaknath Case (1967) by enacting the 24th Amendment Act (1971) and the 25th Amendment Act (1971).

  • The 24th Amendment Act declared that the Parliament has the power to abridge or take away any of the Fundamental Rights by enacting Constitutional Amendment Acts.
  • The 25th Amendment Act inserted a new Article 31C which contained the following two provisions: No law which seeks to implement the socialistic Directive Principles specified in Article 39 (b) and (c) shall be void on the ground of contravention of the Fundamental Rights conferred by Article 14, Article 19, or Article 31.

No law containing a declaration for giving effect to such a policy shall be questioned in any court on the ground that it does not give effect to such a policy.

To learn more about the Indian Constitution, enrol for Certificate in Constitutional Law. 

5. Indira Nehru Gandhi v. Raj Narain case (1975)

The doctrine of basic structure of the constitution was reaffirmed and applied by the Supreme Court in the Indira Nehru Gandhi case (1975).

In this case, the Supreme Court invalidated a provision of the 39th Amendment Act (1975) which kept the election disputes involving the Prime Minister and the Speaker of Lok Sabha outside the jurisdiction of all courts.

As per the court, this provision was beyond the amending power of Parliament as it affected the basic structure of the constitution.

The Parliament reacted to this judicially innovated doctrine of ‘basic structure’ by enacting the 42nd Amendment Act (1976).

This Act amended Article 368 and declared that there is no limitation on the constituent power of Parliament and no amendment can be questioned in any court on any ground including that of the contravention of any of the Fundamental Rights.

  1. Minerva Mills v. Union of India (1980)

The Supreme Court reiterated that Parliament can amend any part of the Constitution but it cannot change the “Basic Structure” of the Constitution.

In the Minerva Mills case, the Supreme Court held that ‘the Indian Constitution is founded on the bedrock of the balance between the Fundamental Rights and the Directive Principles.

They together constitute the core of the commitment to social revolution.

The goals set out by the Directive Principles have to be achieved without the abrogation of the means provided by the Fundamental Rights.

Therefore, the present position is that Fundamental Rights enjoy supremacy over Directive Principles.

Yet, this does not mean that the Directive Principles cannot be implemented.

The Parliament can amend the Fundamental Rights for implementing the Directive Principles, so long as the amendment does not damage or destroy the basic structure of the Constitution.

7.  S. R. Bommai v. Union of India (1994)

In this case, the Supreme Court laid down that the Constitution is federal and characterised federalism as its ‘basic feature’.

It observed the fact that under the scheme of our Constitution, greater power is conferred upon the Centre vis-a-vis the states does not mean that the states are mere appendages of the Centre.

The states have an independent constitutional existence. They are not satellites or agents of the Centre. Within the sphere allotted to them, the states are supreme.

The fact that during an emergency and in certain other eventualities their powers are overridden or invaded by the Centre is not destructive of the essential federal feature of the Constitution.

They are exceptions and an exception is not a rule. Let it be said that the federalism in the Indian Constitution is not a matter of administrative convenience, but one of principle–the outcome of our own process and a recognition of the ground realities.

To learn more about the Indian Constitution, enrol for Certificate in Constitutional Law. 

  1. Keshavanda Bharti v. State of Kerala (1973)

It was the Kesavananda Bharati case that brought this doctrine into the limelight. It held that the “basic structure of the Indian Constitution could not be abrogated even by a constitutional amendment”. The judgement listed some basic structures of the constitution as:

  • Supremacy of the Constitution
  • Unity and sovereignty of India
  • Democratic and republican form of government
  • Federal character of the Constitution
  • Secular character of the Constitution
  • Separation of power
  • Individual freedom

Over time, many other features have also been added to this list of basic structural features. Some of them are:

  • Rule of law
  • Judicial review
  • Parliamentary system
  • Rule of equality
  • Harmony and balance between the Fundamental Rights and DPSP
  • Free and fair elections
  • Limited power of the parliament to amend the Constitution
  • Power of the Indian Supreme Court under Articles 32, 136, 142 and 147
  • Power of the High Court under Articles 226 and 227

Any law or amendment that violates these principles can be struck down by the SC on the grounds that they distort the basic structure of the Constitution.

9. Waman Rao Case (1981)
  • The SC again reiterated the Basic Structure doctrine.
  • It also drew a line of demarcation as April 24th, 1973 i.e., the date of the Kesavananda Bharati judgement, and held that it should not be applied retrospectively to reopen the validity of any amendment to the Constitution which took place prior to that date.
  • In the Kesavananda Bharati case, the petitioner had challenged the Constitution (29th Amendment) Act, 1972, which placed the Kerala Land Reforms Act, 1963 and its amending Act into the 9th Schedule of the Constitution.
    • The 9th Schedule was added to the Constitution by the First Amendment in 1951 along with Article 31-B to provide a “protective umbrella” to land reforms laws.
    • This was done in order to prevent them from being challenged in court.
    • Article 13(2) says that the state shall not make any law inconsistent with fundamental rights and any law made in contravention of fundamental rights shall be void.
    • Now, Article 31-B protects laws from the above scrutiny. Laws enacted under it and placed in the 9th Schedule are immune to challenge in a court, even if they go against fundamental rights.
  • The Waman Rao case held that amendments made to the 9th Schedule until the Kesavananda judgement are valid, and those passed after that date can be subject to scrutiny.

To learn more about the Indian Constitution, enrol for Certificate in Constitutional Law. 

  1. Indra Sawhney and Union of India (1992)

SC examined the scope and extent of Article 16(4), which provides for the reservation of jobs in favour of backward classes. It upheld the constitutional validity of 27% reservation for the OBCs with certain conditions (like creamy layer exclusion, no reservation in promotion, total reserved quota should not exceed 50%, etc.)

  • Here, ‘Rule of Law’ was added to the list of basic features of the constitution.
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Right to Privacy and its Significance in Social Media

Life and personal liberty can be considered as inalienable rights which an individual enjoys by virtue of being a human. These rights are inseparable from a dignified human existence.[1] According to J S Mill, “privacy is an aspect of liberty grounded on the permanent interests of man as a progressive human being”.[2] It exists in every human being, irrespective of socio-economic status, gender or orientation.

Until a few years ago, there was a lack of clarity with respect to the scope of the right to privacy under the Indian Constitution. However, in 2017, the nine-judge bench of the Supreme Court in Justice K.S. Puttaswamy v. Union of India[3] held that privacy is a fundamental right, as part of the right to life and personal liberty under Article 21. However, it cannot be considered as an absolute right and is subject to invasion by state, only if such an invasion is based on “legality, need and proportionality for safeguarding this cherished right”[4].

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It is pertinent to note that privacy should not only be protected in the physical world but in cyberspace as well. The use of the Internet and social media has become very common in India owing to the availability of smart devices, lower internet tariffs and global connectivity.

The social media platforms, on one hand, provide an effective platform to freely express oneself to a large audience, and on the other hand, risk the exposure of certain sensitive personal data of the users. In certain situations, the user is aware of the information being collected by the social media networking sites, however, there might also be instances where the user is completely unaware of the information trail he is leaving online, over which he has no control. Such information can be used by potential offenders to commit physical crimes. For example, in 2016, a group of thieves pretended to be Police officials, entered a hotel in Paris where Kim Kardashian,[5] an American model, was staying for the time being and robbed her at gunpoint. It was later found out that the thieves were following Kim’s Instagram posts where she uploaded pictures wearing costly jewellery and tracked down Kim’s location using her Instagram. This instance shows how potential cybercrime offenders can exploit social media platforms to commit conventional crimes. This example was just one of many instances where information either provided or retained by the social media sites could be made use of for purposes unknown to the user, thus violating the user’s privacy. Therefore, just like any other aspect of life, privacy is an indispensable part of social media life as well.

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The existing and emerging legal framework governing the right to privacy vis-à-vis social media in India

  • The Information Technology Act, 2000 (I.T. Act)[6]

The right to privacy in social media has been protected in India even before privacy was even recognized as a fundamental right. The Information Technology Act, 2000 is considered comprehensive legislation dealing exclusively with the aspects of privacy in the realm of cyberspace.

Section 43A of the I.T. Act obligates a body corporate that possesses, deals or handles any sensitive personal data or information in a computer resource, to implement and maintain reasonable security practices and procedures. If the body corporate fails to do so, and as a result, there is a wrongful loss or wrongful gain to any person, such body corporate can be made to pay damages to the affected person.[7] The provision further defines ‘body corporate’[8] and ‘reasonable security practices and procedures[9].

Furthermore, the I.T. Act, under Section 69A, authorizes the Central Government to block public access to any information through any computer resource under certain grounds[10]. This provision has been relied on by the Government to ban various Chinese apps, including the social media site TikTok, over privacy concerns.[11]

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  • The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) [SPDI] Rules, 2011[12]

With respect to the reasonable security practices and procedures which the body corporate is required to implement under the I.T. Act, section 43A has to be read with the SPDI Rules of 2011. These rules provide a detailed framework for the implementation of section 43A.

The Rules firstly define ‘personal information[13] and ‘sensitive personal data or information.[14] It obligates the body corporate to-

  1. Provide a privacy policy for handling personal information, including sensitive personal information, to the users[15]. The same has to be published on the website of the body corporate[16];
  2. Obtain the consent of the user providing sensitive personal information, regarding the purpose of usage, before collecting such information[17];
  • Take prior consent of the user before disclosing any sensitive personal information of the user to a third party[18];
  1. Have a documented policy containing managerial, technical, operational and physical security control measures that are proportional to the information assets being protected with the nature of business.[19]

Therefore, it is evident that the SDPI Rules primarily cover privacy concerns over sensitive personal information. However, such protection has not been provided to the personal information of the user.

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  • The Personal Data Protection Bill, 2019[20] (PDP Bill)

Taking into account the limited protection provided to privacy on social media by section 43A of the I.T. Act read with the SDPI Rules of 2011, and the judgement of the Apex Court in the Puttaswamy case[21] recognizing privacy as a fundamental right, the Personal Data Protection Bill, 2019 was finally drafted to provide a robust framework on privacy and data protection in India.

The Bill defines ‘personal data’[22], ‘sensitive personal data[23], ‘data principal’[24], ‘data fiduciary’[25] and ‘consent’[26].

By dealing with the loopholes of the existing legal framework in India, the PDP Bill obligates the processing of ‘personal data of an individual only for specific, clear and lawful purposes [27]. It further provides that processing of personal data should be carried out in a fair and reasonable manner to ensure the privacy of data principal and for the purpose consented to[28]. Furthermore, personal data should be collected only to the extent necessary for the purpose of processing.[29]

With respect to the consent of data principal, consent should be obtained prior to processing of personal data[30] and should be specific vis-à-vis the purpose of processing[31]. Furthermore, with respect to consent for the processing of sensitive personal data, it should be obtained after giving the choice to the data principal to separately consent for purposes of the use of different categories of sensitive personal data[32].

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The PDP Bill has not yet become law and is currently referred to the Standing Committee[33].

  • The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021[34]

The Government of India notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which replaced the Information Technology (Intermediaries Guidelines) Rules, 2011.

Under the Rules, the intermediary is required to publish its privacy policy on its website[35]. Further, the intermediary is required to periodically inform its users that in case of non-compliance with privacy policy, it has the right to terminate the account of such users [36]. However, the Rules do not talk about the elements and aspects of the privacy policy, leaving it to the whims and fancies of the intermediaries in the absence of a privacy and data protection framework in India. Furthermore, the provision of traceability of originator of information[37] under Rule 5(2) has the implication of violating the privacy of the users as for tracking the first originator of a message/information, the intermediary should have access to the metadata of the entire chain of the conversation. Therefore, in order to comply with the traceability requirement, the significant social media intermediaries will have to break end-to-end encryption, thereby compromising the privacy of communication.

WhatsApp privacy policy issue

The current privacy policy change by WhatsApp is undoubtedly the best example to illustrate the concern of the right to privacy on social media. Before understanding the implications of policy change in 2021, let us first understand the policy change in 2016.

WhatsApp was launched in 2010 and was bought by Facebook in 2014. Facebook affirmed that it would not change the privacy policy of WhatsApp. However, in 2016, WhatsApp announced a change in its privacy policy to be effective from the 25th of September 2016. The new policy sought to collect information like phone numbers, names, device information etc. of every WhatsApp account, and share the same with the parent company, Facebook. As a result, a petition was filed in the Delhi High Court challenging the change of the policy. In Karmanya Singh v. Union of India,[38] the Delhi High Court rejected the petition but directed WhatsApp to delete the data collected till 25th September 2016 from its servers. The information shared post-25th September was allowed to be shared according to the new policy. Aggrieved by the decision, the petitioners appealed to the Supreme Court, where this case is presently pending.[39]

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In January 2021, WhatsApp came up with a new privacy policy that basically does not touch upon the end-to-end encryption feature, however, WhatsApp can now share user metadata with its parent company and its subsidiaries[40]. WhatsApp gave two options to its users- either accept the policy and continue using the platform, or the WhatsApp account will be eventually deleted. Therefore, in essence, an opt-out option for the new policy change was not provided to the users.

Taking these developments into account, an application[41] was filed in the Apex Court challenging the new privacy policy. The application claimed that WhatsApp was offering lower privacy protection in India as compared to Europe[42]. The primary issue in the case is whether the ‘opt-out’ provision simply opts out of the application in totality i.e. whether WhatsApp is obligated to provide a specific option of ‘Not sharing data with Facebook. The case is currently pending in the Supreme Court.

It is pertinent to note that WhatsApp was able to come up with a privacy policy of ‘take it or exit it’ because of the lack of privacy and data protection framework in India. In such a situation, users have to rely on the privacy policies of the company as the I.T. Act read with SDPI rules provide very limited protection in this regard. If the PDP Bill had become law, WhatsApp would never be able to come up with a policy like this as the provisions of the Bill ensure that information is collected only for a specific purpose for which consent of data principal is explicitly taken and that the data fiduciary takes consent for processing sensitive personal data separately for each different purpose[43]. This provision would have prevented WhatsApp from taking consent for both purposes (for a chat with friends and family and chat with businesses) together, as messages with business entities could reveal sensitive personal data like health information, sexual orientation, etc. However, the scope of Clause 11(3)(c) should be expanded to include ‘personal data’ rather than ‘sensitive personal data of the data principal, just like Article 7(2) of the GDPR.

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[1] Opinion of Justice D Y Chandrachud in Justice K S Puttaswamy v. Union of India, (2017) 10 SCC 1.

[2] Jack Stillinger, Introduction in John Stuart Mill Auto biography, OXFORD UNIVERSITY PRESS, 7 (1971).

[3] Justice K.S. Puttaswamy v. Union of India, (2017) 10 SCC 1.

[4] Id, part T(3)(H).

[5] VANITY FAIR, https://www.vanityfair.com/style/2016/10/solving-kim-kardashian-west-paris-robbery (last visited Apr. 26, 2021).

[6] The Information Technology Act, 2000, No. 21, Act of Parliament, 2000.

[7] Id., § 43A.

[8] Id., explanation (i).

[9] Supra note 7, explanation (ii).

[10] If such information is prejudicial to the sovereignty and integrity of India, defense of India, security of the State, friendly relations with foreign States or public order or incites the commission of any cognizable offence relating to above.

[11] BBC, https://www.bbc.co.uk/newsround/53266068 (last visited Apr. 26, 2021).

[12] The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011.

[13] Id., Rule 2(1)(i).

[14] Supra note 12, rule 3.

[15] Supra note 12, rule 4.

[16] Id.

[17] Supra note 12, rule 5.

[18] Supra note 12, rule 6

[19] Supra note 12, rule 8.

[20] The Personal Data Protection Bill, 2019.

[21] Supra note 3.

[22] Supra note 20, cl. 3(28).

[23] Supra note 20, cl. 3(36).

[24] Supra note 20, cl. 3(14).

[25] Supra note 20, cl. 3(13).

[26] Supra note 20, cl. 3(10).

[27] Supra note 20, cl. 4.

[28] Supra note 20, cl. 5.

[29] Supra note 20, cl. 6.

[30] Supra note 20, cl. 11(1).

[31] Supra note 20, cl. 11(2)(c).

[32] Supra note 20, cl. 11(3)(c).

[33] PRS INDIA, https://prsindia.org/billtrack/the-personal-data-protection-bill-2019 (last visited Feb. 26, 2021).

[34] The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.

[35] Id., rule 4(1)(a).

[36] Supra note 34, rule 4(1)(c).

[37] Supra note 34, rule 5(2).

[38] Karmanya Singh v. Union of India, 233 (2016) DLT 436.

[39] SC OBSERVER, https://www.scobserver.in/court-case/whatsapp-facebook-privacy-case (last visited Apr. 26, 2021).

[40] The latest clarifications from WhatsApp drew a differentiation between “messages with friends or family” and “messages with a business”. It claims that the new privacy policy pertains to the latter alone and the former remains unchanged. WhatsApp has clarified that some “large businesses might need to use secure hosting services from Facebook to manage WhatsApp chats with their customers, answer questions, and send helpful information like purchase receipts”.

[41] Supra note 38.

[42] In Europe, by virtue of General Data protection Regulation, though WhatsApp privacy policy talks about data sharing with Facebook, however, the users can rectify, update or erase information that the platform controls.

[43] Supra note 20, cl. 11(3)(c).

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Initial Public Offering (IPO)

By: Mahima Bheemaiah

What is an IPO?

Most companies that kick off their business starts with a limited source of capital and resources, but soon these companies over a period of time grow into a sustainable business and will need more capital to expand and to grow their business. These funds can be raised through private placements and by also taking loans but when a company needs much more money for its business then it issues securities to the general public. This raising of fresh funds through the public is done through the primary market. Funds are raised through retail investors, qualified institutional buyers and non-institutional investors. The primary market is nothing but a capital market where a company issues securities to the general public for the first time and which is not previously traded in the stock exchanges. Securities are directly issued to the investors through the company. The primary market is also known as the New Issue Market (NIM). The secondary market is where the trading of the stock takes place and keeps varying from time to time. The initial raising of capital is done through the stock market where the general public is allotted shares of that respective company. This process of initially raising capital is known as “Initial Public Offering”.

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Initial Public Offerings or in its abbreviated form called ‘IPO’ raises funds by listing a company in the stock market exchange and by selling securities to the people who have been allotted their respective shares. Only a limited number of shares are available and are allotted in a random process without any bias. Securities could be shares, stock, debentures, bonds etc., but in an IPO it is only the selling of shares to the public. Only a public company is allowed to raise funds through the stock market and a private company cannot do so. IPO raises funds by a company to fulfil its long term goals.

IPO is a fundamental aspect of Capital Markets. It is the very first step for a public company to grow its funds for the development of a company. A company raises capital for the growth of the business, for new investments, to expand their business, to reimburse their debt, for research and development, to acquire any company for strategic planning etc. It can also help in expanding their brand name which provides companies with a huge amount of publicity which may help in securing better terms in lenders. In terms of the economy, when a large number of IPOs are issued, it is a sign of a healthy stock market and economy.

In an IPO the relationship is directly between a shareholder and the company. A shareholder carries the risk factor associated with the shares of the company. A shareholder becomes the owner of a company when he acquires the shares of the company, hence the risk factor which comes with it. If a company performs well in a financial year, these shareholders will also get dividends or bonus shares according to the number of shares they hold in that company. Along with it if there is an increase in demand for the shares of that particular company then the profits of the capital returns will also add to the advantage of the shareholders. A company is liable to its shareholders and must disclose requirements such as filing quarterly and annual financial reports. The money that flows into a company from its investors is known as the ‘Share Capital’ of a company. IPO is the largest source of funds to raise capital for a company.

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While IPO seems like an easy option for a company to raise the capital it does have its share of ups and downs. A company cannot raise capital as and when it wants to. Filing an IPO comes with huge costs and resources. If a company is not well-advised by its financial advisors the company could flop in the open market and might lose out financially. Advantages of going public could be for 1) Easier raising of funds 2) Exit for existing investors 3) Liquidity 4) Increased trust of shareholders 5) Possibilities of takeovers 6) Employee motivation through ESOPs 7) Enhanced visibility and 8) Cost-effective way of raising funds compared to bank loans. Some of the disadvantages of going public can be 1) Loss of Autonomous control over the company and 2) Increase of Compliance Requirements.

What is the process of an IPO?

An IPO process in India typically takes at least seven to nine months. However, the timeline may vary depending on the transaction involved, compliance with the law, preparation of financial statements, receipt of all necessary regulatory approvals and other market conditions. The first step while applying for an IPO is to recruit merchant bankers. He is responsible for making sure the company follows the rules and regulations which goes from application till the listing date. The merchant banker and the company go and apply to the SEBI with their registration application which talks about the health of the company. After this process, the SEBI needs to give their approval for the listing of the company. Once the nod from SEBI is acquired then the company needs to draft a prospectus and this prospectus needs to be filed with SEBI at least after 30 days, it needs to be filed with the Registrar of Companies (ROC) and with the stock exchanges. If it’s a red herring prospectus then it needs to be filed at least 3 days before the ROC before listing takes place. Once the prospectus is issued which contains information about the company which talks about what the company has done so far, its management, the goals it wants to achieve, the risks associated with the shares of the company etc. This is followed by an IPO roadshow or simple marketing of the company, this could be advertising on TV, radio, newspaper etc., so that the general public comes to know about it. Further, the company needs to fix the price range to the shares, this process is known as the book-building process. SEBI guidelines define Book Building as “a process is undertaken by which a demand for the securities proposed to be issued by a body corporate is elicited and built-up and the price for such securities is assessed for the determination of the quantum of such securities to be issued employing a notice, circular, advertisement, document or information memoranda or offer document”.2 In this process bids are placed by the investors which could be above or below the floor price, and once the bidding ends a final offer price is fixed. And lastly, the listing day is when the company gets listed on a stock market exchange and according to the demand and supply of the market participants, the share price may be premium or discount.

Legal Framework over IPO

A company while filling for IPO is mainly regulated by the Securities and Exchange Board of India (SEBI) addition with it, it is also regulated by Securities Contract (Regulations) Act, 1956, Securities Contract (Regulations) Rules, 1957 and Companies Act, 2013. The SEBI ICDR (Issue of Capital and Disclosure Requirement), Regulations 2018 deals with all aspects of the IPO. This Act provides detailed provisions governing an IPO. They provide detailed provisions related to disclosure requirements, opening and closure of issuance, publicity guidelines etc. The other Act is the SEBI LODR (Listing Obligations and Disclosure Requirements) Regulations, 2015 deals with disclosing details of a company when a company is going to list itself in the stock exchange. The Listing Regulations cover principles, common obligations and continuing disclosure requirements for all entities that have already been listed on any of the stock exchanges in the country.

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IPO during Covid Outbreak

December 2019 saw the rise of a new virus called Covid-19. This outbreak disrupted the entire world. Everything came to a standstill when restrictions were imposed due to Covid. There was uncertainty everywhere around the world. When the lockdown was imposed in March of 2020 nobody expected that it would prolong around for months together and would still be looming around in the environment even today. Many sectors were affected by the impact of the Covid such as the manufacturing sector, agricultural sector, service sector and the list goes on and on.

The market was low during this period and took time to recover from the sudden crash in the market. The next few month’s companies were not listing themselves and IPO’s in India which was already staggering due to prolonged slowdown and also due to threat to financial stability only saw 146 IPO’s in the fiscal year of 2019-2020 which was little higher than the previous year. The past 3 years saw a downfall of IPO with the least in a year being 116 IPO’s. The start of 2020 saw the listing of 50 IPO’s, but after the lockdown was imposed the markets were very low. The next four months of FY2020 saw only 19 companies get listed in the stock exchanges, which was a 62% downfall compared to the previous fiscal year.

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The second half of the year saw a rise in IPO’s even though there was still a rise in Covid cases. A few of the company’s IPO was even oversubscribed. This was due to excess liquidity, positivity in the markets and positive sentiments that has resulted in even companies which were impacted by Covid-19 raising funds. There was also a rise in retail investors during this period it was reported by Zerodha that about 250,000 accounts were opened during the month of April 2020 alone which took them about 6 years since the inception of their company to gain their first 100,000 investors. Many young investors have joined the market during this period due to increased awareness and also due to a lot of social media platforms have been promoting and teaching how to trade in the market during the pandemic. The increase in user growth can also be attributed to the easy access to these platforms. Not only in India, but even the global markets saw a rise in IPO. One of the keys to raising in IPO’s is due to sectorial resilience that is a lot of pharmaceuticals, medical and biotech industries and chemical as well as technology sector were welcomed in the second part of 2020 with companies like Chemcon Specialty Chemicals Ltd., Mazagon Dock Shipbuilders and Happiest Minds Technologies Ltd was the most-subscribed IPO’s in 2020.

IPO post-Covid

Post-2020, there was a rise in IPO’s in the country. Not only was there a raise but there was stellar growth in IPO as compared to the previous few years. With the second wave still creating panic amongst the public, there seemed like no stop for IPO’s being listed in the stock exchanges.

In 2021 alone, 63 companies collectively raised 1.2 lakh crore through Initial Public Offerings-the highest amount raised in a single calendar year. December was the busiest month for IPO with 11 companies offering their securities through the primary market. Anuj Kapoor, head of investment banking at UBS India, told Bloomberg News that companies will raise twice the money in comparison to last year.5 Many companies have opted for IPOs since the end of 2020, primarily due to the impact of the Covid-19 pandemic on business and exuberant stock market activity. Due to the high number of first-time retail investors and huge foreign influx investors as well as due to excellent performance seen in the market a high number of companies issued securities through IPO. Some of the companies that excelled in the market are Nazara Technologies, Sona BLW Precision, FSN E-Commerce Ventures, and Tatva Chintan Pharma Company etc. Even though the Covid pandemic continues to wreak havoc on India’s economy, the domestic market still remains very optimistic, hence giving confidence to the issuer.

Most of these companies are raising capital due to losses suffered due to the pandemic as well as expanding business due to an increase in demand. Also high retail investors coupled with liquidity makes it a perfect platform for companies to use this space now for companies to go public. However, heading into 2022 the markets can still be volatile with omicron cases spreading and due to high inflation further raising and it could be that central banks may raise interest rates which could curb liquidity. Still, it is expected that IPO’S in 2022 might be vibrant and robust just like in the year 2021.

Regulation Changes by SEBI to IPO’s

2021 ended with a bang for IPO’s in the country. It was a stellar year with 63 companies listed in the stock exchanges. A lot of new-age companies listed their securities in the market with companies such as Zomato, Paytm etc., introducing themselves in the primary markets. SEBI has come up with new regulations to curb the listing of companies.

To enhance the growth and development of public markets as well as to keep transparency and to remove ambiguity before going public and also keeping in mind the best interests of retail investors, SEBI has made amendments to an already existing volatile market.

SEBI has introduced a maximum cap limit of 35% to use from the equity-issuance proceeding (25% towards unidentified acquisition) for acquisition where there was no regulation before the amendment.6 SEBI is of the view that raising funds for unidentified acquisitions leads to ambiguity in IPO objectives. Limits are also imposed on the existing investors of the company to sell their shares through OFS (Offer for Shares). The purpose of doing this is to instil confidence in the investors and can also let pre-IPO investors look for an alternate form of selling their shares.

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From 1st April 2022, half the anchor investors should have a lock-in period of 90 days from the previous existing 30 days. While the remaining half will go through a 30 day lock-in period. This is done with the intention to make investors stay invested for a longer period and to provide confidence to the other investors. SEBI had proposed to introduce a minimum price band in all public issues, with the upper one at least 5% more than the floor price, so that the process will be more dynamic and flexible with the final price falling within or outside the scope of price band depending upon the demand.7 Regulations have also been done to preferential shares by relaxing pricing norms and lock-ins requirements for promoters, to make it easier for companies to raise funds.

Conclusions

India has become a global hotspot for IPOs. Global investors are also eyeing IPO’s in India. India has generated triple-digit annualised profit through IPO’s. IPO’s offer the biggest opportunity to raise funds for a company. Some IPO’s are a success and some can tank at the market. All of this depends upon the market sentiments. The LIC of India is coming out with the biggest IPO during the month of Feb/Mar 2022 with an issue size of Rs.1 lakh crores.

Some of these provisions which are done by SEBI are in the wake of frenzy number of IPO’s going public and due to high valuations in the markets. To keep a tab on companies and to curb their regulations these changes are placed so that the capital markets are not impacted in the long term. Hopefully, with these changes, the current year IPO’s does not get impacted due to these regulations.

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Blog Intellectual Property Law

Role of IP in E-Commerce

By: Syeda Fauzia

Introduction:

What are Intellectual property Rights?

Intellectual Property Rights (IPR) would refer to anything and everything that is the conception of the human mind which creates an exclusive right bestowed upon the person over the creations of their intellect. According to the Oxford Dictionary, “intellectual property is an intangible property as a result of human creativity.” Intellectual Property is of various kinds, few significant ones being Copyrights, Trademark and Patents. IPR also include inventions of a product or process, a start-up business, creating new music or lyrics of a song and many more.

What is E-Commerce? 

Electronic Commerce or E-Commerce as simply told is where commercial transactions are conducted through online mode. These would include conducting or establishing businesses, exchanging goods and services or both primarily over the internet. Examples For E-commerce would include platforms such as: Amazon, Swiggy, Zomato and so forth.

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How are IPR and E-commerce interlinked? Let’s find out!

In today’s world, economies are constantly growing and changing. Internet as such plays a vital role in the development of the same. That being the case, it is necessary to understand that IPR plays a crucial role in the process of conducting e-commerce business and its impact in the virtual world. It is necessary to keep a tab on E-commerce along with the technology infrastructure in such a manner that the value of the intellectual property is not disregarded. It is crucial than ever that there needs to be a constant process of improvement in this technicality of internet access.

The methodology to understand the role of Intellectual Property in E-commerce is based on certain aspects. They are:

  1. Protection of business

IPR plays an important role in safeguarding the core business interest of a company including all its affiliates/subsidiaries, its domain in the corporate world. More fully against unfair competition amongst the businesses. In case there is no application of IPR or the IPR laws are not abided by, it will lead to severe violations of IPR and the consequences will surely affect the goodwill of a Company. That means to say that IPR plays a significant role in the digital economy. Without IPR in place, anything and everything can be pilfered. It may extend from design to software. The Owners may be perplexed by such duplication and stealing and then the same being floated over the virtual domain. The Owners will never be recognized for their unique innovations.

  1. Safeguarding the ownership of the factors involved in the business development.

There would be several factors that enable a company to be structured and with Intellectual Property law in place, especially for the e-commerce transactions helps to safeguard the digital and technical components which are critical to the company. For instance, there can be software that is connected to networks/routers, software designs, software programs, HTML codes etc. All these factors may be available in different forms and may contain an intellectual property right that not only needs to be protected but to be continued to be protected. This will enable E-commerce to run efficiently and smoothly. Thus, the IPR coated E-commerce safeguards these important factors which are essentially the enablers.

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  1. Protection of IPR

Every E-Commerce business recognizes IPR on all such creations/innovations especially the patents, copyrights, marks and trade secrets. A product that is developed by a company or an individual and commercializing the product involves the development of a variety of technologies so as to protect the product in the public domain. In such cases, the companies/individuals turn up to technology providers who will enter into licensing Agreements wherein certain rights are given for a certain period of time and for a specific purpose. The License Agreement facilitates the owner of the product to safeguard his intellectual property rights in his products by way of acceptance of the owner’s standard terms and conditions wherein the IPR protection is deemed a material term of the contract.

  1. Preservation of patent portfolios and trademarks

If a business has to capture the market in the e-commerce arena, IPR creation becomes an impeccable asset to the Company. The Company will own the portfolio of such intellectual property eg: by Patent or trademark registration. This enhances the company’s credibility and of course will lead to significant development in the company’s financial position as the online business world catches the company that shows their business in the light of the preservation of their patent portfolios and trademarks.

IPR and E-Commerce

Several Companies believe in the fact that their intellectual properties are worthy to a great extent such that the protection of the tangible assets owned maybe a secondary priority. This is very much true in the global market and with the recent happening of online businesses because the intellectual property rights and the law that exists with regard to the same enables the companies from keeping their trade secrets protected and disallows any unfair competition.

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IPR plays an important role in E-commerce in today’s digital economy. The laws that govern the IPR has brought businesses globally to function by supporting new creations but also guarding the tedious inputs that are gone into by the creator of such intellectual property. The laws pertaining to Intellectual Property Rights allows the law to block others from stealing the Intellectual property of the owner. So that there is no impact on the financial position of the inventor and their struggle in bringing the goodwill in the b2b market which is available in the electronic network.

Fundamentals of IPR in e-commerce:

E-Commerce is a great enabler of a business. However, it is the owner who is solely responsible for protecting intellectual property rights. If the owner while revealing the intellectual property to the public or in any media through E-commerce fails to protect it beforehand. This becomes fatal and gives scope for the others to use the owner’s intellectual property unfairly much before filing for its protection. There may not be any legal solution that the owner can adapt and also leaving the culprits to walk away freely with no reprimand whatsoever. No trade secrets can be protected once it is in the public domain. The owner loses all his rights against the virtual world. Eg secrets of a Software algorithm if shared, then such software algorithms cannot be protected.

Breach of Intellectual property

Any website that involves transactions that are mostly buying or selling online is a part of E-commerce websites. Companies while doing e-business may knowingly or unknowingly tend to violate the intellectual property rights by displaying the images, designs or even products of other companies. The most common example is that of Chinese products that look similar but are just a duplication of the original product. Such companies should carefully ensure that they do their due diligence effectively to avoid any infringements of the owner’s intellectual property rights and also that they do not violate the laws that protect the intellectual property in the country of origin of the product.  They should be able to show that the sale is on an original development and that the intellectual property owner is well aware and there is permission to sell in the online platform.

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Protection of IPR under E-commerce

IPR in retail and e-commerce deals with buying and selling products through a physical shop and a website, respectively[1]. In retail also a owner needs to protect his intellectual property rights. Iit is no different that is for E-commerce and should various types of intellectual properties. The following states the usual IPR in E-commerce.

Various patent models protects E-commerce like search engines etc. Patent Law or the Copyrights Act depend from country to country and their IPR laws may be divergent in application. Eg. A website design protected by copyright law. The copyright protection is available under the copyright law for the graphics, designs, materials, audio or video clippings, photographs etc. Therefore the companies in e commerce world can protect their database under such copyright laws as applicable in their specific country.

Protection of brands:

Features that are posted on their application and/or their websites under the Trademark Law. the Intellectual Property Rights also encompasses protection of webpages, displays that are computer-generated, graphics, graphical user interfaces. This may also be protected under at the Industrial Design Laws as per the applicability in their respective country.

There would be certain websites which will have hidden characteristics like graphics that are confidential in nature, source codes, flow charts, data structure, algorithms, various technical descriptions, manuals, contents etc to name a few, are entirely protected under various Trade Secret Laws and opens up the various other laws in protection of such intellectual property rights.

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Conclusion:

In today’s world there is no denying of the fact that achievement of fair and ethical compliance of online businesses and practices cannot be accomplished without the effective use of Intellectual Property Laws. The society is more relying on e commerce and not only the E- businesses development wherein the retail activity is drastically reduced. Like the pandemic struck economy wherein the E-commerce led to significant growth in the virtual market. Making it more diverse and dynamic approach of online platforms.

As the growth of online business expands the Intellectual Property Rights facilitates the companies to protect and monitor their trade activities that are especially to maintain secrecy. IP rights in e-commerce also allow IPR owners to claim a share of the company’s profits. The Implementation of intellectual property rights will focus on the features that are exclusive and are unavailable to others and thus making the implementation of E-Commerce activity in the public domain successfully. The Legal protection of intellectual property rights brings in sturdiness in the usage of intellectual property which helps in not only in licensing, contracting, outsourcing but also helps in building strategic relationships, developing new concepts which in return enhances the sales and E-Commerce business by bringing in features that are unavailable to its competitors. This enables a healthy competition in the internet world and bringing in profits to the right owners of the intellectual property. Therefore Intellectual property stands as a guard to the E-Commerce and enhances fair play in the economy while adopting right measures of protection if Intellectual Property Rights.

 [1] What’s the Role of Intellectual Property in Ecommerce? (thebalancesmb.com)

 

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The Chancellor, Masters & Scholars of University of Oxford and Ors.Vs. Rameshwari Photocopy Services and Ors

Delhi High Court

Judges: Justice Pradeep Nandrajog and Justice Yogesh Khanna

Applicable law: Section 52 of the Copyright Act, 1957

Did you know: A reproduction of a copyrighted work by a teacher or pupil in the course of instruction is allowed and is not an infringement of the copyright

Where it all began:

  1. University and Photocopy Shop were photocopying excerpts from the publications of the plaintiffs and were issuing/selling the said compilations in the form of course packs
  2. The world famous publishers alleged that such publication and sale constituted a copyright infringement and filed a case to require the University of Delhi and the photocopy shop to obtain a license.
  3. The Hon’ble single bench of the Delhi High Court dismissed the suit and an appeal was filed by the publishers before the division bench.

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Legal issue: Whether the right to reproduce work by a teacher or a pupil in the course of instruction is absolute or there are any conditions attached to such a right?

Publisher’s arguments: There are restrictions of fair use that apply to reproduction of materials by teachers and pupils and a license is necessary

University’s arguments: There are no restrictions that apply to the right of reproduction ad no infringement has occurred in this case.

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Judgment in the case:

  1. The court held that it only has to be seen is whether the work used was necessary for achieving the purpose of educational instruction- if it is there will be no infringement
  2. There is no adverse impact on the market of the books because the students still have access to the books in the library.
  3. It was held that the phrase ‘course of instruction’ used in the section will not be limited to just teaching in the classroom but will also apply to the entire program of education
  4. Because the university was not engaged in profit-making the activitiy could not be termed a publication.
  5. The appeal was dismissed and it was held that the preparation and distribution of the course packs was permitted and not an infringement of copyright. The case was sent back to the Single Bench for decision on the question whether whether the course packs were necessary for the educational instruction or not. The suit was finally withdrawn by the publishers

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Significance

The judgment in the case is hailed as a big victory for promoting the access to education. Many writers and academicians, many of whom were infact associated with the publishers, from all over the world condemned the filing of this suit and asked the publishers to withdraw it.

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The Puttaswamy Judgement- How Is Privacy a Fundamental Right?

The jurisprudence in India with respect to the status of right to privacy as a fundamental right has been quite dicey, as pointed out in the previous section. It was only in the case of Justice K. S. Puttaswamy v. Union of India[1] that the Apex Court exclusively dealt with this issue. The case was a reference made by a five-judge bench of the Apex Court to a nine-judge bench. The reference was made owing to the ambiguity arising from the judicial precedents on the status and scope of the right to privacy. The nine-judge bench unanimously held that the right to privacy is an intrinsic part of personal liberty under Article 21 of the Indian Constitution.

The majority opinion authored by Justice Chadrachud discusses in detail, a number of reasons which led to the recognition of privacy as a fundamental right. The following are some of the reasons pointed by the Hon’ble Court in this regard-

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  • Natural and inalienable rights[2]

The court pointed out that privacy, as a right, can be traced to the notion of inalienable rights i.e. the rights which are inherent in and are inseparable from a human being.

Although these rights are inalienable, however, the autonomy which an individual enjoys, by virtue of these rights, is not absolute. The court pointed out an example wherein one employs another person to kill oneself. Here, the individual exercised his autonomy to violate his inalienable right to life. For this simple reason, such autonomy cannot be absolute in nature.

  • Jurisprudence on dignity[3]

The court asserted that ‘dignity’, as a constitutional value, finds its place in the Preamble of the Indian Constitution[4]. The court also said that individual is the main focus of the Constitution as the realisation of individual rights plays a key role in achieving the collective well-being of the community. Therefore, human dignity forms an integral part of the Constitution.

The court held that the sanctity of privacy lies in its functional relationship with dignity, thereby establishing a link between dignity and privacy.

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  • Essential nature of privacy[5]

The court was of the opinion that privacy highlights the reservation of a private space for the individual; the right to be let alone. The concept is based on the autonomy of the individual.

The court further held that the ability to make choices lie at the core of the human personality. In this process, privacy plays an instrumental role by enabling the individual to assert and control the choices he/she makes. Recognizing a zone of privacy is a mere acknowledgment that individual should enjoy autonomy in the development of his/her personality.

Therefore, the court established a relationship between dignity and autonomy with privacy. By virtue of this relationship, the right to privacy forms an important element of human dignity as well.

  • International obligations[6]

Secondly, the court pointed out India’s international obligations towards protection of privacy by virtue of Article 12 of UDHR[7] and Article 17 of ICCPR[8]. Further, Article 51 of the Constitution requires the State to endeavour to “foster respect for international law and treaty obligations in the dealings of organized peoples with one another”[9].

The Protection of Human Rights Act, 1993 also defines “human rights” and includes ‘dignity of individual’[10] under its ambit. Therefore, India is under an obligation to safeguard the privacy aspects of human dignity.

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The court also took note of India’s commitment towards international obligations by pointing out the stand of the Indian judiciary in Bacchan Singh v. State of Punjab[11], with respect to the use of the death penalty underlining India’s obligations under ICCPR, and Vishaka v. State of Rajasthan[12], where the court relied on the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) to provide guidelines prohibiting sexual harassment.

  • Statutory protection cannot deny a constitutional right[13]

The court stated that although certain aspects of privacy have been protected under different statutes, nevertheless, providing constitutional protection to a right, places it “beyond the pale of legislative majorities”[14]. If privacy is considered as a part of the basic structure of the Constitution, it becomes inviolable even through an amendment. However, ordinary statutes come under the ambit of amendment/modification.

  • Not a mere common law right[15]

The court, while addressing the issue that privacy is protected through common law, held that common law protection cannot bar constitutional recognition of a right, which is afforded because such right is an aspect of fundamental freedom or liberty which the draftsperson considered to be so significant as to require constitutional protection.

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  • The ruling of the court- Right to privacy as a fundamental right[16]

Taking into account the reasons summarized above, the court finally held that the right to privacy is constitutionally protected, emerging from the right of life and personal liberty under Article 21 of the Constitution.[17]

Secondly, privacy safeguards personal intimacies, the sanctity of family life, marriage, procreation, the home and sexual orientation[18]. However, this list is not exhaustive[19].

Thirdly, the right to privacy is not an absolute right, like any other right under Part III of the Constitution, including the right to life and personal liberty. Privacy can be encroached by law however, such law should withstand the touchstone of permissible restrictions on fundamental rights. The court formulated a three-pronged test which a law has to pass to intrude into the right to life and personal liberty[20]–

  1. Legality
  2. Legitimate state aim
  3. Proportionality

The Court also unequivocally held that the doctrinal premise of M.P. Sharma[21] and Kharak Singh stand invalidated. The court also appreciated the minority view of Justice Subba Rao in Kharak Singh[22].

  • THE IMPLICATIONS OF RIGHT TO PRIVACY AS A FUNDAMENTAL RIGHT

Common Cause v. Union of India[23] represents the first important application of the principles laid down in Puttaswamy[24] with respect to right to self-determination and freedom to make fundamental choices about how to use one’s body[25], as part of fundamental rights under the Constitution.

Further, the Supreme Court while restoring Hadiya’s marriage opined that Hadiya is having internal freedom of choice, marriage and autonomy.[26]

Therefore, ‘privacy’, as a concept incorporates a number of aspects that are now accorded protection under the umbrella of personal liberty under Article 21 of the Constitution.

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[1] Justice K. S. Puttaswamy v. Union of India, (2017) 10 SCC 1.

[2] Id, part G.

[3] Supra note 32, part I.

[4] Supra note 6, Preamble.

[5] Supra note 32, part R.

[6] Supra note 32, part J.

[7] Supra note 4.

[8] Supra note 5.

[9] Supra note 6, Art. 51.

[10] Protection of Human Rights Act, 1993, s. 2(1)(d).

[11] Bacchan Singh v. State of Punjab, (1980) 2 SCC 684.

[12] Vishaka v. State of Rajasthan, (1997) 6 SCC 241.

[13] Supra note 32, part N.

[14] Supra note 32, para 153.

[15] Supra note 32, part P.

[16] Supra note 32, part T.

[17] Supra note 32, part T(3)(C).

[18] Supra note 32, part T(3)(F).

[19] Supra note 32, part T(3)(G).

[20] Supra note 3.

[21] Supra note 14.

[22] Supra note 9.

[23] Common Cause v. Union of India, (2018) 5 SCC.

[24] Supra note 32, part T.

[25] Recognition of right to die with dignity as a part of right to life under article 21.

[26] Shafin Jahan v. Ashokan K.M, 2018 SCC Online SC 201.

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Separation of Powers Between the Organs of the Government in India

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

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

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

 

Application of Doctrine of Separation of Powers under Indian Political System

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

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

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

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

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

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

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

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

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

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

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