Tag: covid vaccine

Categories
Criminal Law

Plea Bargaining in India and USA -A Comparative Study

By: Muskan Sharma

Concept of Plea Bargaining

Plea Bargaining is a process where the accused is asked to plead guilty in exchange of the judge acting lenient while awarding punishment or considering the seriousness of the offence. It is derived from the Latin phrase ‘Nolo Contendere’ which means ‘I do not wish to contend’ i.e. a plea of ‘No contest’. Plea Bargaining is a situation where the accused admits that the charges levelled against him are true and that he will not contend a query to the Court to decide over his guilt.

The concept of Plea Bargaining was not originally introduced into the Indian legal system but into USA. However, the Law Commission’s efforts promoted the insertion of the provisions concerning Plea Bargaining via its 142nd, 154th, and 177th reports. A new chapter on ‘Plea Bargaining’ was introduced into the Criminal Procedure Code based on the recommendations of the Law Commission for certain offences.

There are three types of Plea Bargaining namely, Sentence Bargaining, Charge Bargaining, and Fact Bargaining.

The concept of ‘Plea Bargaining’ is operative in both India and USA but the practice is not identical. However, it is pertinent to know about the concept of Plea Bargaining and landmark cases associated to it in both legal systems separately for a fruitful comparison between the two.

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

Plea Bargaining in USA

In USA, the accused can put forward one of the three pleas i.e. Guilty, Not Guilty, and Nolo Contendere. Under the doctrine of Nolo Contendere, the plea is treated as an implied confession of guilt or that the Court will decide on the point of his guilt.

However, the Court is not bound to accept such a plea of the accused. It is the discretionary power of the Court to either accept or reject such plea, considering the facts and circumstances of each case presented to it. The Court is supposed to ensure that the plea should be put forward voluntarily by the accused and absence of duress and coercion. The accused must receive the protection of secrecy. Plea Bargaining gained momentum due to the overcrowding in prisons of USA.

Landmark Cases in USA

  • State exrel Clark Adams[1]

In the instant case, the Court explained the doctrine of ‘Nolo Contendere’. The Court held that the plea of ‘Nolo Contendere’ also known as ‘Plea of Nolvut’ means the accused does not wish to contend.

  • United States Risfield[2]

The Court observed that in a criminal action in which an application for Plea Bargaining has been made, the adjudication by the Court in relation to the plea of guilty is not necessary. However, the Court may impose sentence on the accused person immediately.

  • Lott United States[3]

The Court held that the plea being tantamount to an admission of guilt, is not conviction but merely a determination of guilt.

  • Bordenkircher Haynes[4]

In this case, the US Supreme Court upheld the constitutionality of Plea Bargaining while awarding life imprisonment to the accused person who rejected to plead guilty for imprisonment for a term of five years. The Supreme Court observed a slight possibility that the accused person may be coerced to choose among the lesser of the two punishments.

The Supreme Court further observed that there is no probability of coercion or duress if the accused person is free to either accept or reject the offer made by the prosecutor during the negotiation process for Plea Bargaining.

  • Brady United States[5]

In the instant case, the Supreme Court held that the consensus reached out of fear that the trial will result into death penalty will not make the process of Plea Bargaining illegitimate. If the process of Plea Bargaining has been properly conducted and controlled, it is legitimate.

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

Plea Bargaining in India

Section 265A to 265L (Chapter XXI A) of the Criminal Procedure Code, 1973 (hereinafter referred to as “CrPC”) contain provisions concerning ‘Plea Bargaining’.

Section 265A of CrPC provides who is eligible to take benefit of Plea Bargaining. According to the provisions of Section 265A, any accused may take the course of Plea Bargaining except the accused charged with offences that are punishable with death or life imprisonment or imprisonment for a term more than seven years. Also, an accused charged with an offence against a woman or a child below fourteen years of age or affecting the socio-economic conditions of the country, is also not allowed to take the course of Plea Bargaining.

Section 265B provides for the procedure to file an application for Plea Bargaining. The application must contain all details of the case accompanied by a sworn affidavit. Afterwards, the Court may examine the accused to satisfy itself of the fact that the accused has filed such application voluntarily. If the accused satisfies the Court of the voluntariness, the Court provides some time for the mutual satisfactory disposition of the case. If in case, the accused fails to satisfy the Court that he has filed the application voluntarily or that he has been convicted with the same offence previously, the Court may proceed from the stage the application has been filed before it.

Section 265C contains guidelines for mutually satisfactory disposition of the case. It states that the Court shall issue notice to the public prosecutor, if the case instituted on a police report, the accused, and the victim to participate in a meeting to reach at a satisfactory disposition of the case. However, the Court must ensure that the process be completed voluntarily and the accused may participate with his pleader, if he desires so.

Section 265D to Section 265I contain provisions concerning the report of mutually satisfactory disposition, disposal of the case, judgment of the Court, finality of the judgment, power of the Court in plea bargaining, and period of detention already undergone by the accused be set off against the sentence of imprisonment.

Landmark Cases in India

  • Murlidhar Meghraj Loya State of Maharashtra[6]

In the instant case, J. Krishna Iyer criticized the practice of Plea Bargaining. He observed that the Trial Magistrate is burdened with cases and hence, approves the secret dealings of Plea Bargaining. He further observed, “The businessman culprit, confronted by a sure prospect of the agony and ignominy of tenancy of a prison cell, ‘trades out‘ of the situation, the bargain being a plea of guilt, coupled with a promise of ‘no jail‘. These advance arrangements please everyone except the distant victim, the silent society…”

  • Kachhia Patel Shantilal Koderlal State of Gujarat and Anr.[7]

In this case as well, the Supreme Court criticized the concept of Plea Bargaining. The Court held that Plea Bargaining is an unconstitutional process as it encourages corruption and pollutes the concept of justice.

  • State of Uttar Pradesh Chandrika[8]

The Supreme Court held that it is a settled law that a criminal case cannot be disposed off merely on the basis of Plea Bargaining. It was further observed that it is the constitutional duty of the Court to consider the merits of the case and award appropriate sentence despite the confession of the guilt by the accused person.  Mere confession of the guilt by the accused person cannot be a reason for awarding lesser punishment.

However, there has been a shift in the judicial thinking with the passage of time.

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

  • State of Gujarat Natwar Harchandji Thakor[9]

In the instant case, the Gujarat High Court favoured the process of Plea Bargaining and held that the object is to provide easy, cheap, and expeditious resolution of disputes including the trial in criminal cases and that it prevents the pendency and delay in disposal of the administration of justice.

  • Vijay Moses Das CBI[10]

In the instant case, a person was accused of supplying of sub-standardized material to ONGC at a wrong port and thereby, causing ONGC to suffer huge losses. CBI completed the investigation and started prosecution against the accused person under Section 420, 468, and 471 of the Indian Penal Code, 1860. The accused person took the course of Plea Bargaining. But the Trial Court rejected the application of Plea Bargaining on the ground that it was not accompanied by an affidavit as stipulated under Section 265B and no compensation was fixed. However, the Uttarakhand High Court directed the Trial Court to accept the application of Plea Bargaining.

  • Thippaswamy State of Karnataka[11]

In the instant case, the Supreme Court held that inducing an accused person to plead guilty under any assurance or promise is unconstitutional for being violative of Article 21 of the Indian Constitution. It further observed that in such cases, the Court must set aside the conviction and direct the case to the Trial Court to give accused person the right to defend himself and if found guilty, the Trial Court may award appropriate punishment to him.

Plea Bargaining in India and USA: Comparative Analysis

Though the concept of ‘Plea Bargaining’ as adopted into the Indian legal system has been borrowed from USA, it is still distinguishable from the operation of ‘Plea Bargaining’ in USA. Following are some of the major differences that exist between the concept of ‘Plea Bargaining’ as operative in India and USA:

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

  1. Nature of Offence

In USA, there is no provision as to the prohibition on plea bargaining in certain offences. An accused person charged with any offence may take the course of Plea Bargaining. However, in India, there are exceptions as contained in Section 265A. Following categories of accused persons cannot take the course of Plea Bargaining in India:

  1. Accused person charged with an offence punishable with death
  2. Accused person charged with an offence punishable with life imprisonment
  3. Accused person charged with an offence punishable with imprisonment of more than seven years
  4. Accused person charged with an offence against women
  5. Accused person charged with an offence against a child below fourteen years of age
  6. Accused person charged with an offence that affects socio-economic conditions of the country
  7. Role of Victim in Proceedings

In Indian Law, the victim has an important role in the proceedings of Plea Bargaining. The victim has the power to refuse or veto if unable to reach a mutually satisfactory disposition. However, in USA, the victim does not have an active role to play in the proceedings of Plea Bargaining.

  1. Mechanisms available for enforceability

In USA, an application for Plea Bargaining is filed only after the negotiation process between the accused person and the prosecutor is complete. However, in India, the negotiation process with the accused person does not even start before the filing of the application of the Plea Bargaining to ensure that the application of Plea Bargaining is filed voluntarily by the accused. Therefore, there is less chance of the accused being coerced or secret dealings for filing an application for Plea Bargaining.

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

  1. Discretion of the Judge

In USA, the judge does not exercise discretionary power while accepting an application for Plea Bargaining. However, in Indian legal system, the judge has discretionary powers to either reject or accept an application for Plea Bargaining filed by the accused person.

  1. Finality

Under the Indian legal system, if the Court thinks the punishment awarded in any case of Plea Bargaining is insufficient or is guarded by unfair circumstances, it may be set aside either by an SLP under Article 136 or a writ petition under Articles 226 and 227 of the Indian Constitution. However, in USA, it reaches its finality.

 

Conclusion

The conviction rate via Plea Bargaining in the USA is as high as nearly 90% whereas in India, it is not even close to 10% of the criminal cases. This disparity exists due to the differences that exist between the concept of Plea Bargaining as practiced in USA and India.

Though the conviction rate in India is way too low as compared to the conviction rate in USA, it is effective in ensuring that the application of Plea Bargaining has been filed voluntarily. Justice may be delayed but must not be denied. In India, an accused person does not take the course of Plea Bargaining to choose the lesser among the punishments but is a voluntary action. Hence, it is high probability that an innocent person will not be awarded punishment in India by way of Plea Bargaining.

However, speedy disposal of cases is the need of the hour. Hence, the legislature must go for reforms and provide adequate infrastructure to the judiciary to reduce the number of undertrial prisoners.

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

[1] 363 US 807

[2] 340 US 914

[3] 367 US 421

[4] 434 US 357 (1978)

[5] 397 US 742 (1970)

[6] AIR 1976 SC 1929

[7] 1980 Cr LJ 553

[8] 2000 Cr LJ 384

[9] (2005) Cr LJ 2957

[10] Crl. (Misc.) Application No. 1037/2006

[11] (1983) 1 SCC 194

Categories
Blog

Trademark and Competition Law

By: Ishika Gautam

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

Categories
Online legal courses

E-Commerce Contracts and the clauses covered under it

By: Alok Rao

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

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

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

E-commerce law in India: –

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

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

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

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

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

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

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

Categories
Blog

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

By: Anjan Bhandari 

INTRODUCTION:

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

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

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

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!

IMPACT OF COVID-19 ON IBC LAWS IN INDIA:

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

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

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!

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

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

Section 9 : Initiation of insolvency proceedings by operational creditor

Section 10 : Initiation of insolvency proceedings by corporate applicant

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

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!

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

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

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!

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

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

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

    Learn more about Insolvency and Bankruptcy Laws with             Enhelion’s Online Law firm certified Master course!

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

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!

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

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

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

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

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

 

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Master course!