Section 375 of the Indian Criminal Code was created to protect women from rape. In Indian criminal law, in section 375 Men are said to commited rape if he : (a) pierce the penis in some way or force a “rape” on a woman’s vagina, mouth, urethra, or anus. (b) in some way insert an object or body part other than the penis into the woman’s vagina, urethra, or anus, or have the woman do so to him or others. (c) manipulate any part of a woman’s body to penetrate or penetrate the woman’s vagina, urethra, anus, or other parts of her body. (d) place the mouth in the woman’s vagina, anus, urethra.
Under Section 370 , If a person rape woman and do so in any of the following seven situations. 1) Against to their will. 2) Without their consent. 3)With consent and consent for fear of death or injury to them or those they are close to. 4) Consent is given because a man knows he is not her husband and believes that he is another man who is married, or that he is legally married. If so, with her consent 5) If she is under the age of 18, with or without her consent.
Abuse of power One of the famous sayings used in connection with Section 375 is “Men are guilty until proved innocent, and women are not guilty until proved innocent.” Laws enacted to empower women and reassure them in patriarchal societies soon turned into swords that killed the dignity of men in society by false accusations, or women misused laws and power made to protect them. The problem that is occurring in our world today is that women use verbal consent to have sexual intercourse and later refuse or refrain from having sexual intercourse or falsely accuse men that they had it without thier consent. In both cases, the man has the responsibility of proof and must prove his innocence.
According to an article published in The Times of India , only one person was convicted in each of the fourth cases of rape, and high probability that anyone who did not proven guilty after a full trial could be innocent. Leads to the high assumption that innocent people have been accused of rape. India’s conviction ratebin rape cases is 32%, which is self-evident from the fact that numerous false reports related to rape have been registered in India.
Being a victim of false rape allegations is as bad as being a victim of rape. You can’t imagine the shock, trauma, ridicule, and humiliation that someone experienced after being falsely accused of rape. Not only the man, but his family and close friends suffer from various consequences, and isolation and ridicule are just a few of them. Their future is shattered, the humiliation and shame that society suffers is enough to shatter it, and no one can think of them living as they used to.
What can be done ? The creators of Article 375 of the 2013 Act and the Criminal (Amendment) having only one vision in context to the problem, consider only the safety of women and have not developed any means of protecting innocent men in society. Therefore, there is usually a debate about what we can do to protect innocent people from society who are falsely accused. Provision (Section 375) cannot be said to be gender-neutral to remove the slight justice that this section offers, as it acts as a hurdle for women to file genuine rape cases. Then the question arises. What can you do? In such situations, the legislature and judiciary need to work together to strike the right balance between men and women so that the virtues of justice are provided to them equally.
Animal Cruelty : Simply put, animal cruelty harms animals, whether intentional or negligent. While certain activities such as animal cruelty are generally perceived as cruel, the specific actions that make up animal cruelty vary from person to person and from places to places or different countries. Many argue that docking a piglet’s tail without anesthesia is cruel, while others say it is common in meat production to prevent injuries later in the pig’s life. Animal cruelty defination is different in different areas due to countries laws. Animal abuse is an pervasive problem which often is difficult to detect. No species or community is spared from experiencing animal cruelty and neglect. Understanding what animal cruelty means and what it doesn’t mean is one of the first steps to prevent it from happening again. Animals, whether it’s the food, cosmetics, entertainment, or pet industry, don’t deserve to suffer.
Is Animal Cruelty Illegal: The legality of animal cruelty depends largely on where the activity takes place . For example, cruelty to farms and laboratory animals that is illegal in some countries may not be considered banned animal cruelty in some countries, due to differences in national law. In the United States, the best-known legislation to prevent animal cruelty excludes both livestock and laboratory animals from registration.
Animal cruelty in India: Recently, cases of animal cruelty are increasing in India. The same began to discuss animal rights and the extent of legal protection that current law provides to animals. The problem is that most of these crimes are either unreported or face disappointing legal responses, as some of the 1960 Animal Cruelty Prevention Act and the Indian Criminal Code are obsolete. SS Rithika an social activist in context to animal writes about common scenarios of animal cruelty and current laws, procedures, and court decisions dealing with animal cruelty in India. Rithika is also pushing for amendments to these laws to curb the rise in atrocities against animals.
Law related to animal cruelty in India: The Animal Cruelty Prevention Act of 1960 was amended in 1982. Under India’s newly amended 2011 Animal Welfare Act, animal abuse is a criminal offense with a fine of at least 10,000 rupees, a fine of up to 25,000 rupees for the first violation, or upto two years of imprisonment. For the second and subsequent violations, a fine of 50,000 rupees or more and imprisonment of 1 year or more upto 3 years or less. This amendment is currently awaiting approval by the Government of India. The 1962 law is the law currently in force. The maximum fine under the 1962 Act is 50 rupees (less than $ 1). Many organizations, including local SPCA, PF, A, Fosterdopt, etc., are actively involved in reporting cases of atrocities to police and assisting the general public in bringing perpetrators to justice. For this reason, there are many changes in the subcontinent. Under IPC sections 428 and 429, causing mischief by killing or amputating an animal worth more than 10 rupees is a recognizable crime punishable by two years’ imprisonment, a fine, or both.
Some of the campaign toward animal cruelty:#NoMore50 , #RespectForAnimals , #FarmedAnimals etc.
Article 44 directs the state to secure a uniform civil code for the citizens applicable throughout the territory of India. Its main motive is to establish gender justice in India. Even though the state has not shown any efforts towards the enactment of uniform civil code but the judiciary considers it essential to lookout the necessity of the code in the country so as to establish gender justice. Also, the uniformity in the application of laws such as marriage laws, divorce and maintenance laws, etc.
Article 44 states that, “The state shall endeavor to secure for the citizens a uniform civil code throughout the India.”
The above article was looked upon by the historical judgment in Sarla Mudgal vs. Union of India[1]. The Court had directed the government through the Secretary of Ministry Law and Justice, to file an affidavit, and issue a Uniform Civil Law. There had been many cases witnessed that involved such incidents. In the cases, the husband of the plaintiff had converted his religion to Islam and married another woman. The problems were not confined to this but had a large scope, for instance in a case the man had married to a Muslim woman and later left her and converted to Hinduism again. By this, the grievance of the woman was that she could not claim and ask for any protection under the Muslim law as she continued to be a Muslim. In another case, the petitioner was threatened by her husband that he would embrace Islam and marry another woman. She had asked for a restraining order by the court for preventing her husband to marry another woman.
On the facts, the court held that a Hindu marriage continues to exist even after conversion to Islam. And the husband as declared by the court under the section 494 of IPC will be held liable under the practice of bigamy.
Uniform Civil Code seeks to replace personal laws that were based on the scriptures and holy books and customs of each specific religion and community in India by a common set of rules and law. As discussed before, the list of marriage, divorce and the maintenance comes under the list.
Recently, the Supreme Court considering the judgments held that:
The constitution in Article 44 requires the state to enact the common civil code throughout the but till date no action has been taken in this regard.
The Hindu personal laws have been modified but there has been no attempt to frame a uniform civil code for the citizens of the country.
Even after the conclusions made and the judgments delivered in the case of Shah Bane in 1985[2], there has nothing been done to enact a common law for all.
The Supreme Court has enshrined the state of Goa as a ‘Shining Example’ where Uniform Civil Code has been implemented for every religion while protecting certain limited rights.
“Goa as a shining example”
Goa has a common civil code for all which follows the Portuguese civil code 1867. It includes certain provisions:
A Muslim man residing in the state of Goa who has registered marriage in the state cannot practice polygamy.
If a married couple share property equally, in a pre-nuptial order the assets are divided equally between man and woman on divorce.
Personal laws
The laws that are applicabe to a certain class or group of people based on their religion, faith and culture are the personal laws. In a country like India, there are many religions and the people belong to different castes, having their own faith and belief. The set of laws prescribed for their religion is based on their belief. These laws were made considering the customs followed by the people and their religion. In India, people follow these laws since colonial period. Earlier the British had implemented these laws as they were a foreign Nation and it was an approach to prevent any kind of protests that they could have faced by imposing a common civil code for all.
The main subjects of personal law were marriage, divorce and maintenance. The Hindu law, initially had a lot of discrimination towards the women. But later, with the actions and voices raised against, they were largely modified and secularized by the statutory enactments. It was codified by the parliament in 1956 . It was applicable to Sikhs, Jains and the Buddhists too. The Hindu code bill has been split in four parts:
The Hindu Marriage Act, 1955
The Hindu Succession Act, 1956
The Hindu Minority and Guardianship Act, 1956
The Hindu Adoption and Maintenance Act, 1956
The Muslim personal laws are unmodified and has a traditional approach in their content and laws. They have not been changed considering the opposition. The Muslim laws are governed by the Shariah Law of 1937. There hasn’t been much change in those laws. There are only some enactments till the date. The law clearly states that in the matters of personal disputes, the state shall not interfere and a religious authority would pass a declaration on the basis of interpretation of the Quran and the Hadith.
The Christian and Jews apart from these have their own personal laws.
Are the personal laws Fault-less?
The Supreme Court has recently declared the act triple-talaaq as illegal which is a big step towards the gender equality and has raised a question on religion-based personal laws in the country.
Thirty-two years ago Shahnaaz Shaikh filed a public interest litigation (PIL) challenging the triple talaq provisions as she was given divorce by her husband at midnight, which acquired attention. The petition stated that Sharia law had given unequal rights to the Muslim women by imposing purdah, also allowing polygamy and the unilateral divorce and depriving the divorced Muslim women of maintenance rights.
The women activists had soon discovered that this kind of discrimination existed for all the personal laws,and all the religions. For instance, the hindu daughters were also deprived of the property rights. They were not entitled to their patriarchal property. After Lata Mittal filed a case in 1985 and won a 20-year legal battle in the Supreme Court was only that Hindu daughters were provided equal rights in the ancestral property.
Similarly, the Christian women were not allowed to divorce their husbands on the claim of adultery committed by their husbands. But on the other hand the Christian men could simply pronounce their wives as adulteress and issue a divorce. It was only a few years ago that the proposal to amend the Christian divorce act, 1869 was accepted.
With the COVID 19 pandemic surrounding the globe and in excess of 2 million active instances of the same, the caring administrations by the medical experts is the main redeeming quality going with the careful steps that are the duty of the considerable number of citizens. Be that as it may, the security of the residents is being taken consideration by the clinical organization yet what it involves for the clinical clique who is over and over being blamed for negligence in discharge of average duty. On one hand the medical practitioners are being hailed as ‘Corona warriors’ but on the other hand, with the increase in cases wouldn’t there be a increase in negligence?
India had only 111 Covid-19 testing centers to deal with a population of 1.35 billion people. This accounts to the medical negligence of the practitioners along with the hospital administrations especially at a time when every state is trying to reduce the number of cases. The number of beds available in the hospitals is comparatively less and as a result the citizens are dependent on understaffed and under-funded state run health facilities for COVID 19 diagnosis and treatment. This is a serious issue as people do not believe on the state authorities. A lady who was quarantined after her Spain visit states that there is a lack of basic amenities in the hospitals. People fear to come forward as they doubt the skills of the administration to treat their disease. Global health experts claimed that India does not have enough infrastructure and other facilities to face the pandemic. The claim nearly became evident with the increasing number of cases in India. Not only hospital authorities but the government has been lacking service, testing is another major concern. India has performed a little over 100,000 tests — a rate of nearly 47 tests per million people compared with 4,572 tests per million in the U.S., 2,753 tests per million in the U.K, and 8,800 per million in South Korea[1]. At present, India is not adequately testing to identify new cases, which might be hiding the true number of cases. An incident of severe medical negligence was noted when the Patna All India Institute of Medical Sciences (AIIMS-P) handed over the body of a COVID-19 positive patient to his family members.
In the midst of the vulnerability made by the COVID-19 pandemic, the judiciary remains the sole symbol of would like to review the worries of residents oppressed by the absence of satisfactory medical framework and the rising occasions of clinical negligence. There is trust that vital estimates will be taken by the Supreme Court, to safeguard the confidence and any expectation of the individuals.
VIEWS
Medical Negligence is, by and by, a hard issue to set up. On the off chance that negligence cases result from the current emergency, they will be tried comparable to target norms of care. The courts will think about the real factors and conditions of the case, including that the medicinal services staff were acting in an emergency. Considering past cases and the law’s methodology, the significance of clinical rules, conventions, staff preparing, ability appraisal, and enlistment expect a fundamental centrality, and all means should be completely reported. Documentation of steps taken in every one of these issues will demonstrate pivotal in safeguarding any cases brought. In any case, the COVID 19 is a phenomenal occasion and the relevance of the above laws in such conditions of most extreme criticality and affectability stays to be questionable. After the lockdown ends it would be unmistakable component of the lawful framework to observe such case emerging out of clinical carelessness in taking care of crown positive patients.
It isn’t expressed that specialists (doctors) are careless or reckless, however while carrying out a duty which requires a great deal of knowledge and care, regularly numerous experts fail to perform their duty towards the patient. Medication which is perhaps the noblest profession requires setting a domain which can profit the victims of different diseases. Numerous specialists even the expert in some cases dismisses little things to be dealt with while practicing which may bring about harms to the patients that could have been maintained with a permanent disability from that time or even the demise of the patients.
This type of negligence makes patients more prone to harm than to heal. And to avoid these sorts of accidents, prevention and careful behavior of doctors is important. The most prevalent way of doing this is relevant laws and statutes to ensure a patients well being. In a case where a US-based doctor who was Indian from origin lost his 29-year-old wife who was a child psychologist during their visit to India fifteen years ago. The Supreme Court asked the Kolkata-based hospital and three doctors to pay over Rs 11.41 crore[2]. “A bench of justices C K Prasad and V Gopala Gowda arrived at a figure of Rs 6.08 crore as compensation after considering aspects such as loss of consortium, pain and suffering and the cost of litigation.”
Another such case was noted where the Apex Court awarded a compensation of 1.8 crores to a women who had lost her eyes in 1996.[3] Cases like this are evidence of the medical malpractice in India. The government requires making strict rules to prevent the same, so that the justice prevails. People of India should be provided with adequate medical facilities, hygiene and sanitation. Laws should be strict for not only medicine but for all such professions to maintain a certain standard of care and prevent breach of duty.
The unlawful use of force or violence against persons or property to indimate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.
India has already been ranked among the top ten terrorism affected countries including states such as Jammu and Kashmir, Punjab, Tripura, Assam, Nagaland and Manipur. • There are other states also which have been victims of Naxalite terrorism.
CAUSES OF TERRORISM IN INDIA
• In India ,terrorism can be classified in 3 distinct parts: . Cross border terrorism in Jammu and Kashmir. . Terrorism in the hinterland. . Extreme violence and terrorism as an integral part of the ongoing insurgencies.
• In a richly diverse society, politics of communalism and criminalisation, fanatic religious movements and irresponsible statements by political leaders, marginalised minority communities, high levels of youth unemployment, poverty, illiteracy etc. Provide an ideal fertile ground for terrorism to take root and thrive in India. India also remains highly vulnerable to terrorism by foreign terrorists, due to porous borders with all its neighbours and a long coast line.
• As a result, the terrorists and insurgents continue to receive material support and funds from a number of sources.
• India has experienced all kinds of terrorist attacks like hijacking and blowing up of aircrafts, the assassination of 2 of its prime ministers etc.
• Political cause: primary source of terrorism in India. For example, this ia primarily seen in Tripura and Assam. The political factors that resulted in terrorism included the failure of the government to control and manage large scale immigrants from Bangladesh.
• Economic cause: Madhya Pradesh, Bihar, Orissa and Andhra Pradesh are prime examples. The economic factors include rural unemployment, exploitation of landless labourers by those who own land. These economic perceptions and grievances of gross social injustice have led to the rise of ideological groups of terrorists.
• Religious causes: these are also primary sources of terrorism. In Punjab, some elements of Sikh belonging to different organisations shifted to terrorism to the development of an independent state known as Khalistan for Sikhs.
• State-sponsored terrorism: which consists of terrorist acts on a state or government by a state or a government.
• Dissent-terrorism: which are terrorist groups that dissent against their government.
• Terrorists and the left and the right: which are the groups rooted in political ideologies.
• Religious terrorism: terrorists groups that are extremely religiously motivated.
• Criminal terrorism: terrorists acts used to aid in crime and criminal profit.
Terrorism can undermine political moderation in a democracy, paving the way for more extreme elements to gain footholds. The death toll of a terrorist attack ,often inflicted in a spectacular way that draws media attention and leads to political criticism, can undermine faith in government. The secular, pluralistic, ethnically diverse, and vibrant democracy that India has nurtured ever since its independence on 1947 has become the envy of many radical and extremist ideologies.
IMPACT OF TERRORISM
Firstly, it creates a state of panic amongst the citizens. The bomb blasts or firing impacts the mental health of the people. Terrorist attacks create a sense of doubt in the foreign investors of India. This causes a huge blow to the business of India depending upon them. Thus, it damages the economy. As terrorist attacks cause loss of life and property, the replenishment takes up a lot of capital. There are political effects of terrorism in India. The killing of ex prime ministers of India, Mrs. Indira Gandhi and Mr. Rajiv Gandhi, by terrorists ,effected Indian politics and economy at large. Due to 26/11 Mumbai attack , Home minister Mr. Shivraj Patil, chief minister Vilasrao Deshmukh had to resign. This unstabilized the Indian industry. The financial markets have been directly and indirectly the victims of terrorist attacks. In the aftermath of attacks, the financial markets were not only confronted with major activity disruptions caused by the massive damage to property and communication systems, but also with rising levels of uncertainty and market volatility.
STRATEGIES ADOPTED BY INDIAN AGENCIES FIGHTING TERROR.
NIA : A central government investigative agency to probe terror attacks in the country ,created by an act of the parliament of India on December 31,2008, following the Mumbai terror attack of November 2008. Full form is National Investigation Agency.
• Intelligence agencies: There are a set of agencies responsible for fighting terrorism in India. A major agency utilized for gathering cross border information is the Research and Analysis wing(RAW)- the external intelligence agency. The Intelligence Bureau(IB), a division of the home affairs ministry is responsible for collecting intelligence information inside India
. • NATGRID: National Intelligence Grid is an intelligence grid interconnecting certain agencies of the government of India to collect and share intelligence that could be used by the intelligence agencies of various departments.
• CAPF: Centre Armed Police Forces are used extensively in Maoist areas , Kashmir and North-east.
Terrorism in India poses a significant threat to the people of India. Ideologies and brain drain are among one of the important thing to keep in mind as causes of this crime. Terrorist attacks leave deterrent effects on society, political instability for the government and loss to the economy, in form of national and international business. Terrorism is very dangerous as it not only kills the human life but also the infrastructure, industry, ultimately damages its overall growth
The Code was enacted in 2016 following decades of recommendations suggesting improvements to the previous insolvency regime, which was fragmented, fraught with delays and resulted in poor recoveries for creditors. [1]
The insolvency resolution process in India has in the past involved the simultaneous operation of several statutory instruments.
These include the Sick Industrial Companies Act, 1985, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Recovery of Debt Due to Banks and Financial Institutions Act, 1993, and the Companies Act, 2013.[2]
Broadly, these statutes provided for a disparate process of debt restructuring, and asset seizure and realization in order to facilitate the satisfaction of outstanding debts. [3]
As is evident, a plethora of legislation dealing with insolvency and liquidation led to immense confusion in the legal system, and there was a grave necessity to overhaul the insolvency regime.
All of these multiple legal avenues, and a hamstrung court system led to India witnessing a huge piling up of non-performing assets, and creditors waiting for years at end to recover their money. [5]
The Bankruptcy Code is an effort at a comprehensive reform of the fragmented regime of corporate insolvency framework, in order to allow credit to flow more freely in India and instill faith in investors for speedy disposal of their claims. [4]
The Code consolidates existing laws relating to insolvency of corporate entities and individuals into a single legislation.
The Code has unified the law relating to enforcement of statutory rights of creditors and streamlined the manner in which a debtor company can be revived to sustain its debt without extinguishing the rights of creditors[5]:-
1) The scheme of the Code marked a sea change from the previous regime. In respect of corporate entities, the Code introduced a creditor-in-control regime (with a focus on empowering financial creditors), a time-bound resolution process and reduced scope for judicial intervention, and established institutions such as the Insolvency and Bankruptcy Board of India, insolvency professionals and information utilities.[6]
Since the implementation of this new regime, the constitutional validity of various provisions of the Code has been challenged before various High Courts, and the Supreme Court.
Applicability
The Code provides creditors with a mechanism to initiate an insolvency resolution process in the event a debtor is unable to pay its debts. The Code makes a distinction between Operational Creditors and Financial Creditors. [7]
A Financial Creditor is one whose relationship with the debtor is a pure financial contract, where an amount has been provided to the debtor against the consideration of time value of money (“Financial Creditor”).
Recent reforms have sought to address the concerns of homebuyers by treating them as ‘financial creditors’ for the purposes of the Code. [7]
By a recently promulgated ordinance, the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (“the Ordinance”), the amount raised from allottees under a real estate project (a buyer of an under-construction residential or commercial property) is to be treated as a ‘financial debt’ as such amount has the commercial effect of a borrowing.[7]
The Ordinance does not clarify whether allottees are secured or unsecured financial creditors. Such classification will be subject to the agreement entered into between the homebuyers and the corporate debtor.
In the absence of allottees having a clear status, there may be uncertainty about their priority when receiving dues from the insolvency proceedings. [7]
An Operational Creditor is a creditor who has provided goods or services to the debtor, including employees, central or state governments (“Operational Creditor”). A debtor company may also, by itself, take recourse to the Code if it wants to avail of the mechanism of revival or liquidation. [7]
In the event of inability to pay creditors, a company may choose to go for voluntary insolvency resolution process – a measure by which the company can itself approach the NCLT for the purpose of revival or liquidation. [7]
What was the judicial approach to the Insolvency and Bankruptcy Code?
SERIES OF JUDICIAL PRONOUNCEMENT
With almost more than two years since the introduction of the Code, there have been various challenges in the effective implementation of the Code. However, constructive interpretation by the judiciary coupled with effective amendments to the Code has helped in eradicating most of these teething issues. [8]
Some of the key judicial pronouncements are discussed below:
The Insolvency and Bankruptcy Board of India which is the regulatory and supervisory body in charge of the IBC, has done a commendable job in proactively spreading awareness and regulating the space. [9]
Many important judgments were pronounced throughout the year, including certain landmark cases, where in the Supreme Court has tried to ensure that the spirit of the Code is given primacy over procedural requirements. [9]
Suspended Board of Directors of Corporate Debtor Entity are entitled to access the resolution plan and other related documents:-
In a significant judgments delivered on January 31, 2019, the Hon’ble Supreme Court of India decided on an important aspect with respect to the rights of the suspended board of directors of the Corporate Debtor Entity to receive and access the resolution plan and other related documents, whose case has been admitted by the Adjudicating Authority under the relevant provisions of the Code. [10]
Facts of the Case:
In respect of Mr. Vijay Kumar Jain, Director of Corporate Debtor (‘Appellant’) vs. Standard Chartered Bank and Ors. (As ‘Financial Creditors’), the NCLT had approved the appointment of Resolution Professional (‘RP’) to conduct Corporate Insolvency Resolution Process of Corporate Debtor Company i.e. Ruchi Soya Industries Limited (‘RSIL’). [10]
The appellant, being a member of the suspended board of RSIL, was given notice and agenda for the first meeting of Committee of Creditors (‘CoC’) and was permitted to attend the meeting of CoC. The appellant alleged that he was not granted permission to participate in subsequent meetings of CoC. [10]
As a result, the appellant filed a miscellaneous application before the NCLT to allow his participation in the subsequent meetings of CoC. The appellant also executed a Non-Disclosure Agreement (‘NDA’) to keep information received through participation in the CoC meeting strictly confidential and even undertook to indemnify RP. [10]
However, NCLT vide its order dated August 1, 2018 dismissed the said application of appellant with liberty to the appellant to attend the COC meetings, but not to insist upon the CoC or RP to provide information which is considered as confidential by the CoC or RP. [11]
Against the said order of NCLT, the appellant filed an appeal before the Appellate Tribunal, which recognized the right of appellant to attend and participate on the CoC meetings but Appellate Tribunal vide its order dated August 9, 2018 [12] denied the prayer of the appellant to have access to certain documents including sensitive resolution plan.
The appellant aggrieved by the order of the NCLAT, filed an appeal before the Hon’ble Supreme Court of India. [13]
Apex Court Observations and Findings:
On advertising relevant provisions of the Code and arguments of parties to the dispute, the Supreme Court opined that notice of each meeting of the CoC will have to be given to the suspended board of directors of the corporate debtor entity. [14]
The Supreme Court further noted that the statutory scheme of IBC makes it clear that though the suspended board are not members of the CoC, yet, they have a right to participate in each and every meeting held by the CoC and also have a right to discuss along with members of the CoC, resolution plan that are presented at such meeting. [14]
The Supreme Court further observed that Section 31(1) of the Code make it clear once the resolution plan is passed by the Adjudicating Authority, it shall be binding on the corporate debtor together with guarantors and other stakeholders. [14]
This being the case, it is clear that the erstwhile board of directors, which consists of persons who may have given personal guarantees for the debts owed by the corporate debtor, will be bound by the resolution plan, and therefore, have a vital stake in what ultimately gets passed by the CoC’s.[14]
The Supreme Court also made it clear that so far as confidential information is concerned, RP can take an undertaking in the form of NDA from suspended board of directors of the corporate debtor entity with an objective to maintain strict confidentiality in regard to resolution plan and other related documents. [14]
Further, according to Regulation 39(5) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the RP shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and resolution applicant. The term ‘Participants’ includes members of the erstwhile Board of Directors of Corporate Debtor. [14]
Thus in view of the above, the Supreme Court allowed the appeal and set aside the impugned order of the Appellate Tribunal. [14]
What was the result of Insolvency and Bankruptcy Code in the present scenario? Also cite relevant case laws.
IBC came into being repealing SICA (Sick Industrial Companies Act), SICA was repealed with effect from 1 December 2016. [15]
To know the background of IBC, it is important to know more about SICA and why it failed to prevail as a law. [15]
This is the exact rationale for the existence of The Insolvency and Bankruptcy Code in India which has been into effect since 2016. [15]
To know the background of IBC, it is important to know more about SICA and why it failed to prevail as a law. [15]
The journey from SICA to IBC
The SICA, 1985:-
The name SICA, itself connotes the reason for its actuality. India witnessed an atmosphere of rampant industrial sickness in the 1980s in furtherance of which the Government of India came up with key legislation i.e. the Sick Industrial Companies Act to combat the issue. [15]
Widespread industrial sickness affects the economy in a number of ways, thus The Act came into being to spot the sick or potentially sick companies owning industrial undertakings and take speedy remedial measures for their revival or in a scenario where there is no such measure, close such units. [15]
This was an action to get the locked up investment in such industrial units released and use them in a more productive manner. SICA was repealed and replaced by the Sick Industrial Companies (Special Provisions) Act of 2003, which diluted certain provisions of SICA and filled certain gaps. [15]
One of the main changes to the new law was that, in addition to combating occupational diseases, it also aimed to reduce the growing incidence by ensuring that companies do not use a medical certificate simply to evade legal obligations and access concessions granted to financial institutions to receive. [15]
The comprehensive performance of the Act did not live up to the expected results and thus, IBC was notified as on 28th May 2016 and the repeal of SICA came into full effect from December 1, 2016. [15]
IBC Kicks In
Mistakes of the past were taken in view and The Insolvency and Bankruptcy code came into being with a wider scope and aiming to resolve the issues via more effective provisions and implementation. It is an act to consolidate and amend the laws having reorganization and insolvency resolution issues as the subject-matter. [15]
The provisions of the Act shall apply to the following in case of insolvency, liquidation, voluntary liquidation or bankruptcy; [15]
“An Act to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.
Whether the expression “and” occurring in section 8(2)(a) may be read as “or”?
The Court held that the expression “and” occurring in section 8(2)(a) may be read as “or” in order to further the object of the statute and/ or to avoid an anomalous situation – once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility – So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application – A “dispute” is said to exist, so long as there is a real dispute as to payment between the parties that would fall within the inclusive definition contained in Section 5(6). [16]
2) Surendra Trading Company Vs. Juggilal Kamlapat Jute Mills Company Ltd. & Others- Supreme Court:
The time limit prescribed in IBC, 2016 for admitting or rejecting a petition or initiation of CIRP under proviso to sub-sec. (5) of Sec. 9, is directory. [17]
The question before the NCLAT was to whether time of fourteen days under section 9(5) given to the adjudicating authority for ascertaining the existence of default and admitting or rejecting the application is mandatory or directory. [17]
NCLAT hold that the mandate of sub-section (5) of section 7 or sub-section (5) of section 9 or sub-section (4) of section 10 is procedural in nature, a tool of aid in expeditious dispensation of justice and is directory. [17]
Further question (with which supreme Court is concerned) was as to whether the period of seven days for rectifying the defects under proviso to sub-section (5) of Section 9 is mandatory or directory. The aforesaid provision of removing the defects within seven days is directory and not mandatory in nature. [17]
3) Essar Steel India Ltd. Vs. Reserve Bank of India-
RBI is authorized to direct any banking company to initiate insolvency resolution process- Gujarat High Court. [18]
A long-drawn legal battle for Essar Steel ends with this Supreme Court judgment. In one of the most discussed cases under IBC i.e. the case of Essar Steel Limited, the Supreme Court delivered its judgment which would probably be the final judgment of the case. Key highlights of the Essar Steel Supreme Court judgment are as follows: [19]
The requirement of completing the corporate insolvency resolution process within 330 days from the insolvency commencement date as introduced by the 2019 Amendment Act was held as non-mandatory. [19]
CoC can delegate its administrative powers or power of negotiation with the resolution applicants to a smaller committee (sub-committee) since such acts would be ultimately required to be approved and ratified by the CoC. [19]
Prospective resolution applicant has a right to receive complete information as to the CD, debts owed by it, and its activities as a going concern and as such it cannot suddenly be faced with “undecided” claims after the resolution plan submitted by it has been accepted. [19]
To put an end to uncertainty, parameters were laid down for limiting the scope of interference of Adjudicating Authority and Appellate Authority with the commercial decision taken by the requisite majority of CoC. [19]
The Supreme Court has re-emphasized the primacy of the commercial wisdom of the CoC in relation to resolution of the corporate debtor as well as difference in treatment of unequally placed creditors based on its earlier decisions in Swiss Ribbons and K. Sashidhar cases. [19]
Why are the judgments of the Insolvency and Bankruptcy cases pending with court?
The judgments of the cases are pending with the Court due to the Causes for the delays which range from frivolous challenges by operational creditors and promoters to basic issues like shortage of judges. [20]
There is no stipulated time-line for operational creditors to challenge the rejection of their claim, shortage of members at the bench, allowing intervention by promoters at the admission stage and long gaps between conclusion of hearing and passing of written orders are all causing delays,” said Sapan Gupta, national head banking and finance practice at Shardul Amarchand and Mangaldas. [20]
To be fair, delays are not a peculiarly Indian phenomenon. Many advanced countries struggle to provide quick, high-quality justice to citizens. But in India the scale of the problem is unprecedented. Focusing on capacity alone won’t reduce delays. [21]
A pervasive reason for the delays is adjournments. Many advanced countries struggle to provide quick, high-quality justice to citizens. But in India the scale of the problem is unprecedented.[21]
Conclusion
In conclusion, the Insolvency and Bankruptcy Code, 2016, is a progressive legislation that is intended to improve the efficiency of insolvency and bankruptcy proceedings in India. The new legislation provides for the early detection of financial distress and a time bound process for resolution. [22]
However, many details on the IBC’s implementation need to be worked out in the regulations, and its success will depend to a large extent on how quickly a high quality cadre of insolvency resolution professionals will emerge and on whether the time bound process for insolvency resolution will be adhered to in practice. [22]
The IBC has taken its first steps to regularize the insolvency process in India. It has amended over 11 legislations in India, bringing about one of the most significant changes to commercial laws in India in recent times. However, the 22 months of this nascent legislation have been ridden with controversies and speedy resolutions. [23]
It has also become a very important tool for banks to regularize multitudes of non-performing assets plaguing the country’s economy. Within 7 months of the enactment of the IBC, the Reserve Bank of India released a list of 12 companies which held about 25% of the gross non-performing assets of the country.[23]
With more than 11% of all loans in India being terms as bad loans, the IBC has become the need of the hour. The IBC has brought a plethora of changes to insolvency laws in India and aims to reduce the amount of bad loans that has saddled the economy over the last few years. [23]
We are beginning to see this through various companies successfully concluding their insolvency process. The first successful case of a CIRP was that of Bhushan Steel wherein TATA Steel agreed to purchase Bhushan Steel for Rupees Thirty-Two Thousand Five Hundred Crores. [23]
With many more insolvency resolution processes in the pipeline, only time will tell if the IBC will prove to be a successful tool with its objective of streamlining the insolvency process in India. [23]
1) Bankruptcy Law Reforms Committee, The Interim Report of the Bankruptcy Law Reforms Committee (2015).
2) Rule 2.1.1. of RBI Master Circular – Prudential Norms on Income Recognition, Asset Classification and Provisioning – Pertaining to Advances defines an NPA as ‘An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank. A ‘non-performing asset’ (NPA) was defined as a credit facility in respect of which the interest and/ or installment of principal has remained ‘past due’ for a specified period of time.
3) It must be noted that creditors having outstanding debts continue to have the right to approach an appropriate forum like civil courts or arbitral tribunals for recovery of debts which would be a contractual right of recovery.
4) As cited in the “Abstract” of “Emerging Jurisprudence on Corporate Insolvency” by Shipra Sayal Institute of Law, Nirma University, Ahmedabad, Gujarat, India.
5) As cited in the “Introduction” Para of “A Primer on the Insolvency and Bankruptcy Code, 2016” by Nishith Desai Associates:- The Legal and Tax Counseling Worldwide.
6) As cited in the “Introduction” para of “Understanding the Insolvency and Bankruptcy Code, 2016:- Analysing the developments in jurisprudence” by “Vidhi Bankruptcy Research Programme” at the Vidhi Centre for Legal Policy and the Legal Division of the Insolvency and Bankruptcy Board of India.
7) As cited in the “Applicability” Para of “A Primer on the Insolvency and Bankruptcy Code, 2016” by Nishith Desai Associates:- The Legal and Tax Counseling Worldwide.
8) As cited in the “4th Para ,viz, Series of Judicial Pronouncement” of “Series of Judicial Pronouncement – Insolvency and Bankruptcy Code, 2016” written by Rushabh Ajmera on TaxGuru.
9) As cited in the “Introduction” Para of “Insolvency and Bankruptcy Hotline:- ANALYSING 2018 THROUGH THE LENS OF THE INSOLVENCY CODE” written on January 17, 2019 by Nishith Desai Associates.
10) As cited in the “4th Para” viz, Series of Judicial Pronouncement” of “Series of Judicial Pronouncement – Insolvency and Bankruptcy Code, 2016” written by Rushabh Ajmera on TaxGuru Website India 11 months ago.
11) As cited in “NCLT pronounced order on August1, 2018”.
13) As cited in “Facts of the Case Para” of “Series of Judicial Pronouncement – Insolvency and Bankruptcy Code, 2016” by Rushabh Ajmera 11 Months ago on TaxGuru India Website.
14) As cited in ” Apex Court Observations and Findings Para” in “Series of Judicial Pronouncement – Insolvency and Bankruptcy Code, 2016” by Rushabh Ajmera 11 Months ago on TaxGuru India Website.
15) As cited in “IBC (Insolvency and Bankruptcy Code, 2016) – The Bankruptcy Law of India” written by Vidushi Trehan, LL.M from Symbiosis Law School, Pune , Intern at Khurana & Khurana, Advocates and IP Attorneys.
16) As cited in “Brief about decision para” in ” “and” occurring in section 8(2)(a) may be read as “or”- Mobilox Innovations (P) Ltd. Vs. Kirusa Software (P) Ltd.- Supreme Court” written by IBC LAWSon September 21, 2017.
17) As cited in “Case Name: M/S. Surendra Trading Company Vs. M/S. Juggilal Kamlapat Jute Mills Company Limited and Others” written by IBC LAWS on September 18, 2017
18) As cited in “RBI is authorised to direct any banking company to initiate insolvency resolution process- Essar Steel India Ltd. Vs. RBI- Gujarat High Court” written on July 17, 2017 by IBC LAWS.
19) As cited in “The Insolvency And Bankruptcy Code In 2019 : Recent Amendments And Key Judgments” written by Mayur Shetty and Chintan Gandhi of Rajani Associates on 12th March 2020.
20) As cited in “Delay becomes the norm in insolvency & bankruptcy cases” by Joel Rebello & Saikat Das, ET Bureau on Aug 15, 2019 at 11:25pm.
21) As cited in “Hidden factors that slow our courts and delay justice” written by Arghya Sengupta.
22) As cited in “Insolvency And Bankruptcy Code” written on 12 September 2017 by Samvad Partners.
23) As cited in “2016: Overview Of The Insolvency And Bankruptcy Code, 2016” written by Namrata Bhagwatula , Senior Associate on 20 September, 2018.
As the world battles the COVID-19 pandemic, countries are moving to stringent measures like lockdowns and curfews. With markets crashing, the global economy is staring at a deep distress.
Entire world is fighting against epidemic COVID 19 outbreak and Hon’ble Prime Minister of India Sh. Narendra Damodardas Modi has taken much need precautionary step of complete lockdown from midnight 12’o clock of 24th March, 2020 onwards for next 21 days and again extended to 3rd May, 2020 for another 19 days.
In this difficult environment, each regulatory body is releasing relief measures and guidelines for easing out the impact of COVID 19. On the financial and compliance front, announcements have been flowing from the Government authorities in the form of deferment of statutory due dates or relaxation in payment terms to overcome the financial crisis being faced due to lock-down.
Similar to several countries, the Government of India has begun working on an economic package to deal with the impact of the pandemic. Realising the hardships faced by its citizens, the Union Finance & Corporate Affairs Minister Smt. Niramla Sitharaman has announced several important relief measures on tax and regulatory aspects.
The Finance Minister also announced that necessary legal circulars and legislative amendments for giving effect to these relief measures will be issued by the concerned Authority.
Following is the summarised form of the key announcements made by the Finance Minister here below:
Direct Taxes
1. Extension of tax return filing deadline
The deadline for the following types of tax return have been extended from 31 March 2020 to 30 June 2020
Belated income-tax return for tax year 2018-19
Revised income-tax return for tax year 2018-19
2. The timeline for linking Aadhaar with PAN has been extended to 30 June 2020
3. Relief with regards to delay in payment of taxes
Interest at the reduced rate of 9% (i.e. 0.75% per month instead of 1/1.5 percent per month) will be charged on delay in respect of following payments made between 20 March 2020 and 30 June 2020:
Advanced tax
Self-assessment tax
Regular tax
Taxes withheld or collected at source
Equalization levy
Securities Transaction Tax and
Commodities Transaction Tax
Penalty and late fees in relation to the above mentioned payments are to be waived off
4. Extension of compliance due dates
In respect of the following, where the due dates fall between 20 March 2020 and 29 June 2020, the revised due dates shall be 30 June 2020:
Issue of notice
Intimation
Notification
Approval order
Sanction order
Filing of appeal
Furnishing of return, statements, applications, reports, any other documents
Completion of proceedings by the authority and
Any compliance by the taxpayer including investment in saving instruments or investments for roll over benefit of capital gains
5. The Direct Tax Vivad se Vishwas Act, 2020:
The timeline for payment of disputed arrears without attracting additional 10% amount under the Vivad se Vishwas Scheme extended from 31 March 2020 to 30 June 2020.
Indirect Taxes
1. Extension of GST return filing deadlines:
The last date for filing the forms GSTR-3B due in months of March, April and May 2020 (i.e. returns of February, March and April 2020) will be extended till 30 June 2020 (in staggered manner)
Date for filing GST annual returns of FY 18-19, which is due on 31 March 2020 is extended till the last week of June 2020
2. Relief in respect of payment of taxes
For those having aggregate annual turnover less than INR 50mn, no interest, late fee, and penalty will be charged for the period
However, for those having an aggregate annual turnover of more than INR 50mn, a reduced rate of interest @ 9% per annum will be charged from 15 days after due date (current interest rate is 18 % per annum) for the delayed payment between 20 March 2020 and 30 June 2020, but no late fee and penalty will be charged if complied before 30 June 2020
Last date for making payments by the Composition dealers for the quarter ending 31 March 2020 will be extended till the last week of June 2020
Payment under Sabka Vishwas Scheme shall be made without interest till 30 June 2020
3. Extension of compliances due dates
In respect of the following under GST law, where the due date falls between 20 March 2020 and 29 June 2020, shall be extended to 30 June 2020:
Issue of notice
Notification
Approval order
Sanction order
Filing of appeal and
Furnishing of return, statements, applications, reports, any other documents
4. Date for opting for composition scheme for the F.Y. 2020-2021 is extended till 30 June 2020
5. 24X7 Custom clearance till end of 30 June 2020
Corporate Laws
1. CARO 2020
Applicability of Companies (Auditor’s Report) Order, 2020 will be effective from FY 2020-2021
2. Board meeting
The mandatory requirement of holding Board meetings within prescribed interval provided by the Companies Act, 2013 (120 days) shall be extended by a period of 60 days till next two quarters i.e. till 30 September
3. Meeting of Independence Directors
For FY 2019-20, if mandatory one meeting of independent directors is not held, the same will not be treated as non-compliance
4. Form INC-20A- Declaration of commencement of Business
New Companies being given 6 more months for filing declaration of commencement of business
5. Debenture
Time line to invest 15% of debentures maturing in a particular year has been extended from 30 April 2020 to 30 June 2020
6. Deposit Reserve
Requirement of creating a Deposit Reserve (equal to 20%) of deposits maturing during FY 20-21, extended to 30 June 2020 instead of 30 April 2020
7. Minimum residency
Non-compliances with 182 days residency in India by Director will not treated as non-compliance
8. No Additional Fees
Moratorium period from 1 April 2020 to 30 September 2020, during which no additional fee would be charged in respect of any filing, irrespective of its due date
9. Insolvency and Bankruptcy Code 2016 (IBC)
Minimum amount of default required to initiate insolvency and liquidation on corporate debtors raised from INR 1 lakh to INR 1 crore, effective immediately, in order to prevent admission of MSMEs defaulting due to economic conditions in lieu of COVID-19
Proposed Suspension of new initiations of Corporate Insolvency Resolution Process under Sections 7, 9 and 10 of IBC for 6 months, contingent upon scenario beyond 30 April 2020 as a safeguard companies from defaults attributable to financial downturn pursuant to the COVID-19 pandemic
Among the measures announced late on Tuesday, the government extended the e-way bill validity for the second time since the lockdown was imposed. The e-way bill generated on or before March 24 and expiring during the March 20-April 15 period would now be valid till May 31. This is likely to help trucks stuck en route to reach their destinations.
Further, the notification extended by three months the deadline for furnishing the annual return and GST audit for financial year 2018-19 to September 30. Additionally, a taxpayer can now furnish monthly return GSTR-3B showing nil sales through SMS using the registered mobile number. This return would be verified by a registered mobile number based one-time password (OTP) facility, the notification said.
The Indian economy is one of the most robust economies in the World and one of the key components which constitutes it significantly is known as Job work. So what’s the definition of Job Work?
Definition
As per Section 2(68) of the CGST Act, 2017 Job Work is defined as ‘any treatment or process undertaken by a person on goods belonging to another registered person’.
Meaning
Job-work means it is the processing of goods supplied by principal. The job worker is required to carry out the process specified and it includes outsourced activities that may or may not culminate into manufacture.
The one who does the said job would be termed as ‘job worker’. The ownership of the goods does not transfer to the job worker but it rests with the principal.
About the Concept
The concept of job work is stated and explained in the Central Excise. It is a concept wherein a principal manufacturer can send an input or semi-finished good to a job worker for further processing.
Many facilities and procedural concessions have been given to the job workers as well as the principal supplier who sends goods for job work.
The whole idea behind this is that the principal must be made responsible for meeting the compliances on behalf of the job worker on the goods processed by the worker.
One must also consider the fact that typically the job-workers are small persons who are unable to comply with the discrete provisions of the law.
The most relevant and pertinent point is what are the Procedural aspects that have to be dealt with in regards to the Job Work?
Certain facilities with the specific conditions are offered in relation to job work some of which are as under:
a) A registered person (Principal) can send inputs/capital goods under intimation and subject to the certain conditions without payment of tax to a job worker and from there to another job worker and after completion of job work bring back such goods without payment of tax.
The principal is not required to reverse the ITC availed on inputs or capital goods dispatched to job worker.
b) Principal can send inputs or capital goods directly to the job worker without bringing them to his premises, still the principal can avail the credit of tax paid on such inputs or capital goods.
c) However, inputs and/or capital goods sent to a job worker are required to be returned to the principal within 1 year and 3 years,respectively, from the date of sending such goods to the job worker.
d) After processing of goods, the job worker may clear the goods to-
(i) Another job worker for further processing;
(ii) Dispatch the goods to any of the place of business of the principal without payment of
(iii) Remove the goods on payment of tax within tax;
(iv) India or without payment of tax for export outside India on fulfilment of conditions.
The facility of supply of goods by principal to the third party directly from the premises of the job worker on payment of tax in India likewise with or without payment of tax for export may be availed by the principal on declaring premise of the job worker as his additional place of business in registration. In case the job worker is a registered person under GST, even declaring the premises of the job worker as additional place of business is not required.
Before supply of goods to job worker, principal would be required to intimate the Jurisdictional Officer containing the details of description of inputs intended to be sent by the principal and the nature of processing to be carried out by the job worker.
The said intimation shall also contain the details of another job worker, if any. The inputs or capital goods shall be sent to the job worker under the cover of a challan issued by the principal.
The challan shall be issued even for the inputs or capital goods sent directly to the job worker. The challan shall contain the details specified in Rule 10 of the Invoice Rules.
The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the principal.
Input Tax credit on goods supplied to job worker under Section 19 of the CGST Act, 2017 provides that the principal (a person supplying taxable goods to the job worker) shall be entitled to take the credit of input tax paid on inputs sent to the job- worker for the job work.
Further, the proviso also provides that the principal can take the credit even when the goods have been directly supplied to the job worker without bringing into the premise of the principal.
The principal need not wait till the inputs are first brought to his place of business.
Time Limits for return of processed goods
As per section 19 of the CGST Act, 2017, inputs and capital goods after processing shall be returned back to principal within one year or three years respectively of their being sent out.
Extended meaning of input
As per the explanation provided in section 143 of the CGST Act, 2017, where certain process is carried out on the input before removal of the same to the job worker, such product after carrying out the process to be referred as the intermediate product.
Waste clearing provisions
Pursuant to section 143 (5) of the CGST Act, 2017, waste generated at the premises of the job worker may be supplied directly by the registered job worker from his place of business on payment of tax or s such waste
may be cleared by the principal, in case the job worker is not registered.
Transitional provisions
Inputs or partially processed inputs which are sent to a job worker prior to introduction of GST under the provisions of existing law [Central Excise] and if such goods are returned within 6 months from the appointed day i.e. 1st July, 2017 no tax would be payable.
If such goods are not returned within prescribed time, the input tax credit availed on such goods will be liable to be recovered.
If manufactured goods are removed, prior to the appointed day, without payment of duty for testing or any other process which does not amount to manufacture, and such goods are returned within 6 months from the appointed day, then no tax will be payable.
For the purpose of these provisions during the transitional period, the manufacturer and the job worker are required to declare the details of such goods sent/received for job work in prescribed format GST TRAN-1, within 90 days of the introduction of the GST.
Conclusion
The tax treatment of job work under GST remains largely similar to the current regime. An important point to note is that the period within which inputs should be brought back or supplied from the job worker’s place is now 1 year instead of 180 days earlier.
Similarly, the period within which capital goods should be brought back or supplied is now 3 years instead of 1 year earlier. Also, GST will now be levied on processing charges charged by the job worker.
For the manufacturing industry, these provisions are positive and in line with the Government’s all-out support for the sector.
The Consumers can now cheer as the Consumer Protection Act, 2019 has recently replaced the three decade old Consumer Protection Act, 1986. The Consumer Protection Act, 2019 which came into effect on Monday (July 20) has replaced the earlier Consumer Protection Act, 1986.
The new Act as per the Experts say that “it gives more power to the consumers”. It seeks to revamp the process of administration and settlement of consumer disputes, with strict penalties, including jail term for adulteration and misleading ads by firms.
On July 20, 2020 certain provisions of the Consumer Protection Act, 2019 came into force as notified by the Central Government. Following the the key features of the relevant provisions:-
Key features of the Consumer Protection Act, 2019 which came into effect on July 20, 2020:-
1) Consumers can now institute a complaint from where they reside or work for gain.
2) The original pecuniary jurisdiction of the District Commissions has increased upto ₹1 crore from ₹20 lakh earlier.
3) The Pecuniary jurisdiction of State Commissions has been increased from ₹1 crore to Rs. 10 crore.
4) The National Commission can hear cases above ₹10 crore when compared to above ₹1 crore earlier.
5) While the provisions relating to e-commerce are not yet notified, a section relating to electronic service provider (covering software services, electronic payments) is notified.
6) The opposite party needs to deposit 50% of the amount ordered by the District Commission before filing an appeal before the State Commission. Earlier, the ceiling was a maximum of ₹25,000, which has been removed.
7) The limitation period for filing of appeals to the State Commission has been increased from 30 days to 45 days.
8) The Parties can be allowed to settle the disputes through mediation.
Following are the Sections which came into force:
Above mentioned provisions pertain to the Consumer Protection Councils, Consumer Disputes Redressal Forum, Mediation, Product Liability, punishment for manufacturing, selling, distributing etc spurious good or products which contain adulterant.
As per the rules, the e-commerce players will have to display the total ‘price’ of goods and services offered for sale along with break-up of other charges. Only a few certain miscellaneous provisions with regards and respect to the powers of the Central and State Government to make the rules and regulations have also been enforced.
On misleading advertisements there is provision for jail term and fine for manufacturers. There is no provision for jail for celebrities but they could be banned for endorsing products if it is found to be misleading.
For the first time there will be an exclusive law dealing with Product Liability. A manufacturer or product service provider or product seller will now be responsible to compensate for an injury or damage caused by the defective product or deficiency in services.
The Act has also defined an “e-commerce” as the buying or selling of goods or services including the digital products over digital or electronic networks. The existing definition of e-commerce has been adopted from India’s FDI Guidelines on e-commerce.
The definition of ‘e-commerce Entity’ as provided under the FDI Guidelines includes inventory and market place models.
There is also a provision for class action law suit for ensuring that rights of consumers are not infringed upon. The authority will have power to impose a penalty on a manufacturer or an endorser of up to 10 lakh rupees and imprisonment for up to two years for a false or misleading advertisement.
COMPANY COMPLIANCES DURING THE COVID-19 ERA: AN INTRODUCTION
The global outbreak of the novel coronavirus has taken the world by storm. While the issue pertaining to the public health is the talk of the town, the impact of COVID-19 on businesses and corporates seems to be least talked about.
Day to day business of the corporates is being affected due to decreased inflow of the human resource and a decrease in the workflow. While technologies have provided a relief to the human resource for physical attendances and conferences, there seemed to be unsettled trouble regarding legal compliances that required various filings and physical meetings.
Pursuant to the ongoing global COVID-19 pandemic and the Finance Minister, Ms. Nirmala Sitharaman’s announcements on March 24, 2020, the Ministry of Corporate Affairs (“MCA”) has issued various circulars to provide relief to companies from certain compliances under the Companies Act, 2013 (“Act”) and associated rules. This has been done as a measure to reduce the compliance burden on entities during the unprecedented health and economic situation caused by COVID-19. Following are the measures:-
1. Company Affirmation of Readiness towards COVID-19
Social distancing has gained its importance as a way to contain the spread, morbidity, and mortality of COVID-19. Government of India (“GOI”), responsible for the public welfare at large, has realised that social distancing can be achieved in its true sense only if the employers of the Indian public make the same application in their respective premises.
Considering that major employers of the nation belong to the companies or limited liability partnership (“LLP”) type entity, GOI as part of disaster management have advised all companies/LLPs to put in place an immediate plan to implement the “work from home” policy as a temporary measure up till March 31, 2020.
Further, in case of a requirement of physical visits of the essential staff to such offices by the employers, staggered timings may be followed in order to minimize physical interactions of all kinds.
A simple webform for companies/LLP shall be deployed by MCA on March 23, 2020, in order to confirm the readiness of the employers to deal with COVID-19 threat. The webform shall be called CAR (Company Affirmation of Readiness towards COVID-19) and would be required to be signed and submitted by the authorised signatory of the company/LLP.
Therefore, it shall be expected by each company/LLP to ensure reporting of the compliance through CAR instantly from the date of its deployment.
2. Companies Fresh Start Scheme 2020
The MCA issued a circular on March 30, 2020, introducing the Companies Fresh Start Scheme, 2020 which, inter alia, grants a one-time opportunity to defaulting companies to complete all belated filings, including, without limitation, annual filings and filings required under IEPFA (Accounting, Audit, Transfer and Refund) Rules, 2016 in relation to transfer of money remaining unpaid or unclaimed for a period of seven years under Section 124(5) of the Act and transfer of relevant shares in the name of the ‘Investor Education and Protection Fund’ under Section 124(6) of the Act, with the MCA21 registry, without incurring additional fees on account of any delay.
This scheme came into force on April 1, 2020, and is valid till September 30, 2020. The application for seeking immunity for belated filings under this scheme should be made within a period of six months from September 30, 2020, through Form CFSS-2020. Thereafter, an immunity certificate will be provided by the designated authority on the basis of the declarations made in such form.
However, no immunity shall be provided under the scheme in a matter where (i) an appeal or management dispute is pending before any court or tribunal, or (ii) a court has ordered a conviction, or the adjudicating authority under the Act has imposed a penalty, and in respect of such orders, no appeal has been filed prior to the scheme coming into force.
Further, the scheme shall not apply: (i) where an application has been filed or an action for final notice for striking off the name of the company has already been initiated; (ii) where the company has been amalgamated; (iii) when application of obtaining dormant status has been filed; (iv) to vanishing companies; and/or (v) where charge related documents or an increase in authorised capital is involved.
3. CSR Spending
The MCA has by way of circular dated March 23, 2020 and the office memorandum dated March 28, 2020, clarified that the spending of CSR funds by companies in relation to COVID-19, including by way of contribution to the PM CARES Fund, is an eligible CSR expenditure under the Act.
The MCA has further clarified by way of FAQs dated April 10, 2020 that contributions made to the State Disaster Management Authority will also be eligible CSR activity, but contributions towards (a) ‘Chief Minister’s Relief Fund’ or ‘State Relief Fund for COVID-19’; and (b) payment of salary/ wages to employees and workers (including contract labour/ temporary/ casual/ daily wage workers) during the lockdown period will not be considered as eligible CSR expenditure.
However, ex-gratia payment over and above the disbursement of wages to temporary/ casual workers/ daily wage workers, specifically for the purpose of fighting COVID-19, will be admissible towards CSR expenditure, provided there is an explicit declaration to that effect by the board of the company, which is duly certified by the statutory auditor.
4. Meetings of Board and the Shareholders
The Companies (Meetings of Board and its Powers) Rules, 2014 were amended by a notification dated March 19, 2020, to enable companies to hold board meetings on the following matters (which earlier had to be necessarily held at a physical meeting) through video-conferencing or other audio-visual means (collectively “VCC”) till June 30, 2020: (i) approval of annual financial statements and board’s report; (ii) approval of prospectus; (iii) audit committee meetings for consideration of financial statements; and (iv) approval of amalgamation, merger, demerger, acquisition and takeover.
MCA has, by way of a general circular dated April 8, 2020, requested companies to pass all decisions of an urgent nature requiring shareholder approval, other than those of ordinary business or business where any person has right to be heard, through postal ballot/ e-voting in accordance with the relevant statutory provisions without holding a physical general meeting. However, in cases where holding an extraordinary general meeting (“EEGM”) is unavoidable, these have now been permitted to be held through VC until June 30, 2020. The circular further lays down certain conditions to be met for conducting an EGM through VC and the key conditions, inter alia, include: (i) attendance of at least one independent director (where a company is required to appoint one) and auditor (or his authorised representative who is qualified to be the auditor); (ii) maintenance of recorded transcripts of the EGM and, in case of a public company, such transcripts to be uploaded on the company website (if any); and (iii) e-voting facility being available. All other provisions relating to general meetings under the Act (and relevant rules) will continue to apply.
Due to difficulties faced by various stakeholders in serving and receiving notices/responses by post on account of COVID-19, the MCA, on April 13, 2020, provided that notice of EGMs to be held through VC (and for passing shareholder resolutions through postal ballot/ e-voting) may now be given to shareholders only through email addresses of the shareholders registered with the company or with the depository participant/ depository. This circular also specifies various conditions which companies must comply with while sending email notices to shareholders.
CONCLUSION
Business entities in India are requested and expected to keep an eye on the major government websites to ensure timely compliance with all such immediate requirements and mandates issued by GOI as need of the hour from time to time.
WEBSITES REFERRED:-
1) MCA General Circular No. 10/20 dated March 23, 2020 on Clarification on spending of CSR for COVID-19.
2) MCA General Circular No. 12/20 dated March 30, 2020 on Companies Fresh Start Scheme, 2020
3) MCA Notification dated March 19, 2020 on Companies (Meetings of Board and its Powers) Amendment Rules, 2020
4) MCA General Circular No. 14/2020 dated April 8, 2020 on Clarification on passing of ordinary or special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of threat posed by Covid-19.
5) MCA General Circular No. 17/20 dated April 13, 2020 on clarification on passing ordinary and special resolutions by companies under the Companies Act, 2013 and rules made thereunder on account of threat posed by COVID-19.
Biomedical Waste Management & Handling Rules, 1998 (“1998 Rules”) in India govern the handling, disposal and management of bio-medical waste (“BM Waste”)in India have been notified by the Central Government in the exercise of the powers conferred by Section 6,8 & 25 of the Environmental Protection Act, 1986. These rules provide for the framework of the management and Handling of disposal and scientific management of BM Waste
In wake of the COVID-19 pandemic, the Centre Pollution Control Board (“CPCB”) recently issued guidelines dated March 27, 2020 for handling, treatment and safe disposal of BM Waste generated during treatment, diagnosis and quarantine of patients confirmed or suspected to have COVID-19 (“Guidelines”).
The Guidelines have been necessitated due to the super infectious nature of the Novel corona virus and provide for a mechanism for the segregation, packaging, transportation, storage and disposal of BM Waste in order to avoid further spread of the virus through BM Waste.
So what do you mean by the BM Waste and what are the categories of BM Waste that the hospitals generate?
The Bio-Medical Waste Management Rules 2016[1] (“2016 Rules”) define the BM Waste as any waste, which is generated during the diagnosis, treatment or immunisation of human beings or animals or research activities pertaining thereto or in the production or testing of biological or in health camps, including the categories mentioned in Schedule I the 2016 Rules.
The 2016 Rules apply to all persons who generate, collect, receive, store, transport, treat, dispose, or handle bio medical waste in any form. The next imminent question that comes to our minds is what are the categories of BM Waste that the hospitals generate?
BM Waste generated from a hospital could be human anatomical waste, animal waste- microbiology & biotechnology, waste sharps, discarded medicines and cytotoxic drugs, solid & liquid waste.
Now that we know what’s the meaning and various categories of BM Waste, the most pertinent question arises that how is it supposed to be treated and disposed of by the hospitals in India during the ongoing COVID-19 pandemic?
While the hospitals in their usual course deal with the segregation, management and storage of BM Waste, the situation in times of COVID-19 is extraordinary the reason being the highly contagious nature of the virus and also it’s transmission cycle and multiplicity rate.
As the hospitals are being flooded with the suspected and confirmed cases, the Ministry of Health and family welfare (“MoHFW”) and the CPCB have issued various guidelines for the handling and management of waste generated from the COVID-19 facilities.
Under the 2016 Rules, while the hospitals are required to ensure that there is a secured location within its premises for a spill/pilferage free storage of segregated BM Waste in labelled/coloured bags or containers, the duty to transport the stored BM Waste from the hospital premises onwards to the common BM Waste treatment and disposal facility is of an ‘operator’ as defined in the Rules.
Specifically, in wake of COVID-19, the CPCB has issued Revision 1 to the Guidelines dated March 25, 2020 for Handling, Treatment and Disposal of Waste Generated during Treatment/Diagnosis/ Quarantine of COVID-19 Patients (“CPCB Guidelines”).
[2] The said CPCB Guidelines inter-alia, state that hospitals are required to depute separate BM Waste sanitation workers to COVID-19 isolation wards and maintain records of all waste generated in such isolation wards and ensure that the BWM generated is collected and separately stored in separate leakproof color-coded double layered bags or bins /containers labelled as “COVID-19 waste” as per the 1998 Rules and the Guidelines.
In fact the Bombay High Court in a recent pending public interest litigation has, while issuing notices to local municipal corporations and the State Pollution Control Board, also directed the Maharashtra government to clarify whether it was ensuring that all COVID-19 related biomedical waste generated in the state was being disposed of in a safe manner[3].
Now that we have a thorough understanding of how the BM Waste is supposed to be treated and disposed of the most important and the widely discussed about topic is that what are the measures that a hospital is required to take for the safety of its employees doctors, nurses and other support staff who are known as the (“healthcare personnel”) from the dangerous diseases like COVID-19?
In order to answer this pertinent question which is often there in the limelight, one must keep in mind that the Healthcare personnel who are the Frontline workers have a high risk of contracting the COVID-19.
While the hospitals are taking precautions and measures to control any spread of infection within the premises, it is particularly difficult given the highly super-infectious nature and hyper-speed feature of the virus. Due to this feature it spreads widely and it becomes a bit difficult to contain it in an over-crowded environment but it’s not impossible to achieve that as we all have been deterrent enough to contain it’s spread but still there is always scope for improvement.
The first steps towards controlling the spread of a virus is personal protective equipment also known as PPE which should preferably be a two-layered fluid-resistant apron and basic items like N-95 masks, face shield, full cover gowns and sanitisers but the same are rendered ineffective against the COVID-19 if the quality of these equipments is not up to the standard as required.
Greater emphasis is also to be laid upon the proper training and awareness of healthcare personnel towards proper use and disposal of the equipment. The spread of the COVID-19 virus is also particularly fast due to the heavy load of asymptomatic patients coming into the hospital and hence a greater need for the formulation of national COVID-19 protocol.
The MoHFW has vide its revised guidelines for clinical management of COVID-19 dated March 31, 2020[4] (“Clinical Management Guidelines”) impressed upon strict compliance of Infection prevention control (IPC) protocol for Hospitals and a consequent effect of the same is prevention and management of COVID-19 in the hospital staff.
This protocol inter-alia, standard precautions such as hand hygiene, use of PPE to avoid direct contact with patients’ blood, body fluids, secretions (including respiratory secretions) and non-intact skin, prevention of needle-stick or sharps injury, safe waste management, cleaning and disinfection of equipment and cleaning of the environment around a COVID-19 patient.
The 2016 Rules also provide as follows that in order to and for ensuring the safety of the healthcare workers and others involved in the segregation and pre-treatment of BM Waste, the hospital is required to train to all its healthcare workers, immunise them for protection against diseases which likely to be transmitted by handling of BM Waste, in the manner as prescribed in the National Immunisation Policy[5].
Also, hospitals are required to ensure occupational safety of all its health care workers and others involved in handling of BM Waste by providing appropriate and adequate PPE and also they must conduct health check ups at the time of induction and at least once in a year maintain the records for the same.
Now due to the pandemic if one is an employee ie the Healthcare personnel of the hospital one must understand the Legal aspect and angle also and the most important aspect of all is that what is the Legal obligations of the hospital, if and when an employee of the hospital tests positive for COVID-19.
Let’s answer this as it’s the most crucial and critical aspect. The present COVID-19 pandemic is an unprecedented event and is unlike any other infectious disease known to mankind and the medical world which is yet to fully decipher its modus operandi of infecting humans.
In a hypothetical situation wherein a hospital employee contracts COVID-19, it will be imperative for the employee in such a situation to establish that his possible exposure to COVID-19 was in the Hospital itself not in the community after considering that the employee is spending time outside as well apart from the hospital premises.
While in an ideal case, if it is proved that a hospital staff has contracted it ,i.e., it shall amount to ‘a hospital acquired infection’, then the hospital would be ordinarily liable. However, in the case of COVID-19 since it is seemingly impossible to trace down the exact source of the infection, in absence of such evidence and in light of utmost safety measures and precautions taken by the hospitals as per the guidelines, fastening of any liability on the hospital would be peculiarly difficult.
The defence available to the hospital may be culpability and negligence of the employee and proving that the hospital itself took all possible measures to avoid any mass spread of the infection.
The next relevant point to be analysed and answered is that when a Non COVID-19 patient contracts the virus during his term of being admitted in the hospital what are the Legal obligations of the hospital when this happens?
The National Consumer Dispute Redressal Commission in the matter of Apollo Emergency Hospital vs Dr. Bommakanti Sai Krishna & Anr.[6] observed that “As already observed, the infection occurred during the stay of the Complainant at the hospital. On the other hand, there is nothing to show that the source of infection lay outside the hospital. Thus, there is preponderance of possibilities of the infection having been acquired in the hospital itself. We therefore, do not accept the contention that it was necessary for the Complainant to produce expert evidence to prove negligence on the part of the concerned doctors in the hospital.”
The afore-stated judgement implies a presumption of liability on the hospital that in cases where the probability of acquiring the infection is much higher inside the hospital than from other sources. However, the same may not apply in COVID cases in light of the peculiar difficulty of tracing the source of acquiring the COVID-19 infection. Therefore, the presumption rendered by the aforesaid judgement will not be ipso facto applicable to cases of COVID patients.
As we have discussed the various pertinent relevant questions another one is that what are the legal obligations of the hospital, if and when a patient is misdiagnosed positive or negative for COVID-19 by the hospital due to a fault in the COVID-19 rapid testing kit (“testing kits”)?
The liability of a hospital in cases of misdiagnosis depends on the methodology of procuring of testing kits. A hospital may procure testing kit either from third party manufacturer or may manufacture them internally i.e. by itself or its subsidiary.
In cases where the misdiagnosis is on account of faulty testing kit procured externally, the hospital cannot be held directly liable as the liability may be shifted upon the manufacturer.
In cases where the misdiagnosis is on account of faulty testing kit is due to testing kits produced internally the hospital may be liable subject to it being proved that the misdiagnosed patient was indeed positive. However, factors such as the success rate of any testing kit not being 100% may have an interplay in determining the liability.
We have to be aware of what are the Legal liability of a hospital in a situation where the hospital discharges a mild/very mild/pre-symptomatic COVID patient to ramp up the capacity for serious COVID-19 patients.
A hospital will not be held liable for a systematic discharge of a mild/very mild/pre-symptomatic/moderate COVID-19 patient as the same is directed by the Central Government. On May 8, 2020, the MoHFW released its revised policy for the discharge of COVID-19 patients.[7] This revised policy provides that hospitals can discharge mild/very mild/pre-symptomatic in accordance with the protocols given therein.
In the earlier advisory[8], COVID-19 patients could be discharged only after chest radiograph clearance, viral clearance in respiratory samples, and if two of the patient’s specimens were negative within a period of 24 hours. The discharged patient would then have to home quarantine themselves in accordance with the revised policy.
So what is the protocol to be followed by a Hospital while disposing of the dead bodies of the COVID-19 patients?
The corpses are a source of infection for healthcare personnel/ other patients and cannot be disposed of by usual methods of disposal and therefore, the MHFW issued guidelines dated March 15, 2020 on dead body management in COVID-19.[9] The guidelines provide inter-alia, the protocol to be followed at the time of removal from the isolation room or area, put in bio-hazard bag and disinfection. Further, all surfaces of the isolation area (floors, bed, railings, side tables, IV stand etc.) should be wiped with 1% Sodium Hypochlorite solution and then it should allow a contact time of 30 minutes, and allow it to air dry as well.
While treating patients infected with the COVID-19 virus, what is the protocol for the treatment?
The All India Institute of Medical Sciences (AIIMS) has issued clinical protocol dated April 21, 2020 for treatment of Covid-19 patients and states such as Madhya Pradesh and Delhi have directed Hospitals and health centres dedicated to treating COVID-19 patients to follow the said clinical protocol.[10]
Treatment must be affordable for all. One must know whether or not there is a standardisation of costs of treatment of a COVID-19 for private hospitals?
Government hospitals are reaching their intake capacities and for that reason COVID-19 patients have been resorting to treatment in private hospitals. While some private hospitals are charging exorbitant amounts as costs of treatment, the same is worrying not just for the patients but also to the insurers.[11]
In a first, the State government of Maharashtra has capped treatment costs in private hospitals for people without medical insurance and for other patients, the capped prices will come into effect once they exhaust their medical insurance cover.[12]
The Hon’ble Gujarat High Court has vide its order dated May 22, 2020 directed the state government to issue a notification making it mandatory for all multi-speciality hospitals private/ corporate hospitals in Ahmedabad and on its outskirts to reserve 50% of their beds (or such other capacity as maybe specified by the state government) for COVID-19 patients.
In view of the same, the Government of Gujarat may come up with similar caps on costs as Maharashtra.[13] The Hon’ble Gujarat High Court also observed that the certain private hospitals authorised by the government to treat COVID-19 patients in Ahmedabad are charging exorbitant fees which is unaffordable for a massive section of the society and directed the state government to ensure that private hospitals do not charge exorbitant fees. [14]
Also in light of the same The Hon’ble Bombay High Court recently directed a charitable hospital to make court deposit of monies in a case pertaining to levy of exorbitant charges for treatment of COVID-19 patients belonging to poor strata of the society despite reserving 20% of its beds for poor and the needy.[15]
The COVID-19 pandemic is a major public health crisis which has affected the entire Economy and it’s stakeholders especially from the macro economy angle. Due to the novel coronavirus which spread widely the entire supply chain has been badly hit, not only has it disrupted and cut-off the Indian Economy but this has resulted in widespread economic losses across all the economies of the world.
It has caused widespread damages, hinderances and inconvenience especially in regards to the interruptions of people’s movement which has in turn halted and jolted the entire production line and activities which also poses as a serious risk to the macro economy.
Apart from having devastating and damaging effects on human lives, it has claimed over 543,605 lives and infected over 11 million people all around the world. The novel coronavirus (COVID- 19) has significantly knocked down not just the Chinese economy from where it emerged but also the global economy.
Kristalina Georgieva, Managing Director of the International Monetary Fund has officially confirmed that we have entered into a recession as bad as or even worse than that of 2009.
In order to revive the economy by 2021 we first must contain the virus at the earliest by hook or by crook. In Italy the number of confirmed cases are increasing and depicting a spiking up trend with over 1.8 million in the United States and also the number of deaths increasing in Italy and the UK which was under a 6 months long lockdown, this seems like a far blown possibility.
FACTORS REQUIRED TO DETERMINE THE EFFECTS OF COVID–19
There are 3 factors which is to be analysed and discussed in order to get a clear understanding about the plausible damages caused due to this pandemic, they are as follows:-
1) Demand
2) Supply
3) Finance.
On the demand side declining income, fear of contagion, reduced working hours, possible layoffs, absence of vaccine has detrimental effect especially in the service sector.
On the supply chain as the manufacturing line took a bad hit and almost came to a standstill, the manufacturing activities in the most affected regions were badly affected and this resulted in bottlenecks in the global value chain
China is reopening its factories but due to the COVID-19 pandemic the manufacturing companies abroad are finding it exceedingly difficult to purchase products in and ship them out of China.
The Covid-19 is posing an unprecedented Global Public Health Emergency and this has resulted in also creating financial distress in the form of drying up of liquidity, providing credit and meeting contractual obligations.
As a matter of fact, demand, supply or financial disruptions, might not directly affect but they do have a profound indirect effect on the legal field.
IMPLICATIONS OF COVID-19 PANDEMIC ON THE LEGAL FRATERNITY
The last two decades have seen an exponential growth in the legal field. As per the Bar Council of India( apex body of Indian Legal Professionals) the Indian legal profession consists of approximately 1.2 million registered advocates, around 950 law schools and approximately 400-500 thousand law students across the country and high numbers are seen across the world. This data is as per the Vision Statement of the year 2011-2013.
While the supply side of the legal education remains almost the same year after year, barring minor changes, this recession will surely contract the manufacturing and service sector. Thus, the demand for the new entrants in the legal industry might observe a sharp fall.
As the economy is in a recession due to COVID-19 pandemic, the legal industry will be affected by it, but How? In order to predict the future the past must be examined. In 2008 Global economic crises the event’s that took place need to be analysed and only then we will know how brave the 2020 recession shall be as the contours of legal landscape look more or less the same.
The impact of an economic recession on the legal profession has been disastrous as this has resulted in mass layoffs, hire freezing and salary decreases and this has in turn rendered an overwhelming amount of law graduates unemployed.
The legal field in the last decade witnessed methodical changes, remoulding and a tremendous shift of power from the hands of providers to the hands of consumers.
Also new skillsets have been developed, multi-disciplinary problem solving as well and technological adoption all of those has resulted in the rise of data and digital transformation.
The law firm dominance and an emerging global legal community in order to Analyze the industry trends it is easy to predict and also which category of lawyers will fare better or worse during this COVID-19 scenario is a must due to the consequent economic downturn.
VARIOUS NEW AVENUES AND AREAS OF OPPORTUNITIES OF LAW THE COVID-19 PANDEMIC HAS CREATED
People/Businesses will always require trained legal professionals in the long run. Certain areas of law will be in great demand in comparison to others.
With increasing health crisis all over the globe, there will be a great requirement for health care lawyers. High value mergers and acquisition areas of corporate law may dry up. A
Attention will turn towards restructuring, insolvency, bankruptcy and litigation work. Firms with varied practice areas are more likely to perform better during recession. Policy lawyers will be in favour as new companies will aggressively invest on policy lawyers to move far ahead from traditional industries.
With business downsizing, decline in job market and hire freezing there will be a lot of scope for Public Interest Litigation/Class Action, Labour and Employment lawyers. Global Environmental Catastrophe is not far away and Environment will be a highly litigated issue. Thereby creating a need for efficient Environmental and Animal Right Lawyers.
As part of Alternative Dispute Resolution, Conciliation, Mediation and Arbitration are effective ways of resolving a dispute. Parties to the dispute will lack the means viz., time and money to pursue litigation post the covid-19 pandemic and will prefer arbitration, mediation and negotiation.
International Arbitration is facing challenges during the COVID-19 pandemic due to the travel restrictions in place but, even with inhibiting factors of the currently available technology the post covid phase will see tremendous growth in usage of technological methods for dispute resolution i.e., online dispute resolution; video conferencing; chats; teleconferencing etc.
Lease disputes will burst at the seams, tenants are already serving notices invoking Force Majeure clause. Hence, Property Law will have scope for development.
SUPPLY CHAINS MOVING OUT OF CHINA
Due to existing trade war between USA and CHINA and thepending legal suit against China for the spread of COVID-19, hedging the risks of MNC’s corporations are mulling, moving their production out of China. The ongoing pandemic has only worked as a catalyst to this process.
Japanese, South Korean and Taiwanese multinational companies have already started moving their Chinese production facilities to countries with favourable business policy regime and friendlier International relations viz.Vietnam and other South East Asian Countries.
The warm ties between India and the USA pegs India as a potential production hub. In case of such an eventuality Asian transactional lawyers will benefit tremendously.
TECHNOLOGICAL ADVANCES
Providers that have embraced technological advances have a sure shot success through the recession period.
The Supreme Court of India has started hearing urgent matters via video conferencing. E-filings make the courts productive as it saves time from lengthy paperwork. Such circumstances will give young techno savvy lawyers an edge over the established lawyers.
JOBS
The Post Covid-19 phase will open the doors for a lot of young and aspiring lawyers as well as experienced lawyers who are open to the idea of juggling between different practice areas.
Senior Advocates who are otherwise experts in their respective fields but not adept at using technology will now be forced to employ younger and technologically savvy lawyers in their traditional offices.
The legal process analyst will have the job of analyzing a piece of legal work, subdividing the assignment into meaningful and manageable chunks, and identifying the most appropriate supplier of services for each. This task requires deep legal insight and experience. This individual will often be employed within an in-house legal department, rather than at a law firm.
Legal Risk Managers will emerge who will have to anticipate a problem and propose solutions.
AI/Algorithm/Blockchain Dispute Resolution will emerge to deal with matters related to Motor Accidents or Consumer Compensation etc.
Virtual law libraries will emerge and the experience of Senior Advocates or Lawyers will be necessary for writing monographs and book reviews.
Online Legal Services will throw open an array of a lot more new practice areas for lawyers, who were till now, practicing their skills using traditional methods.
CONCLUSION
We are living in an era of revolutionary changes and technological advancements and we must consider how vast and far stretched the paradigm shifts in information technology have taken place which is a boon for the entire legal fraternity.
Even biomedical research, genetic discoveries, biotechnological advances and nanotechnology have changed our world.
One must observe how deeply the LPG has influenced the exchanges of legal and other professional services. This has led to the homogenization of cultural trends and consumption patterns across the world.
What more, even the viruses of both biological as well as software kinds have become all pervasive. This has resulted in the reduction of the mortality rates across the country, as a by-product of which we are experiencing a massive population growth.
Due to the Global climate change and acute scarcity of resources which has resulted in mass migration of the humanity in search of better pastures, it has resulted in the shifts of each day which generates the fundamental questions and answers which shall alter the shape of the human experience.
It is certain that lawyers will play an indispensable role in tackling it with the help of these developments and harnessing the opportunities to secure an orderly change and which will in turn enhance the human welfare in the much larger context.
The period of Economic Downturn is critical for every field. It has a huge impact on global healthcare facilities and legal professionals around the world. Though, the legal profession is more resilient to the recession than many others but it hops in the economic downturn.
The law firms and individual practitioners who widen their horizons by welcoming the opportunities will adapt to and triumph the current situation.
The legal profession should take advantage of the ongoing paradigm shift to develop liberalized business structures that allow the firms to build and develop a sustainable and competitive practices so that it will result in the evolution of the market for legal services.
Till date no panacea exists for the situation at hand unless there is an immediate containment of the disease and invention of the vaccine, the world as we know it will never be the same again.
This will not only require targeted and active macroeconomic measures but a series of medical policies as well. Until a permanent solution is found, the legal fraternity has to proactively explore the fields of law for upcoming opportunities and sow seeds of progression, which will bear fruits for the generations to come. “
‘Intellect’ refers to the creations of the mind. Intellectual Property is a type of intangible property and includes inventions, literary and artistic works, symbols, names and paintings.
Intellectual Property Rights (IPRs) are the Rights granted to the creators of Intellectual Property (IP) by the Government. The nature of IPR is territorial. In any country an IP has to seek protection separately under the relevant laws.
Mechanisms which are Special in nature have been kept in place for various territories in order to provide protection to different types of IPRs. It confers an exclusive right to the inventor/ creator or assignee to fully utilize the invention/ creation for a given period of time.
It’s been established that the intellectual labor associated with the innovation should be given due importance so that public good emanates from it.
This is a strong tool, to protect investments, time, money, effort invested by the inventor/creator of an IP, since it grants the inventor/creator an exclusive right for a certain period of time for use of his invention/creation.
Hence it aids in the economic development of a country by promoting healthy competition and encouraging industrial development which shall also aid in the growth of the economy.
WHAT IS AN INTELLECTUAL PROPERTY?
Intellectual Property(IP) refers to creations of the mind; inventions; literary and artistic works; and symbols, names and images used in commerce.
IP is divided into two categories: 1) Industrial Property:- includes patents for inventions,trademarks, industrial designs and geographical indications. 2) Copyright:- covers literary works (such as novels,poems and plays), films, music, artistic works (e.g., drawings, paintings, photographs and sculptures) and architectural design.
In Intellectual property(IP), there are Rights which relates to the rights of performing artists in their performances, producers of phonograms in their recordings, and broadcasters in their radio and television programs are included.
WHAT ARE INTELLECTUAL PROPERTY RIGHTS?
So what do you mean by intellectual property rights? IP rights like any other property right allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation.
These rights are outlined in Article 27 of the UDHR which provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.
The importance of intellectual property was first recognized in the Paris Convention for the Protection of Industrial Property (1883) and the Berne Convention for the Protection of Literary and Artistic Works (1886). Both treaties are administered by the World Intellectual Property Organization (WIPO).
There are various pros which are more compelling than the cons.
1) The progress and well-being of humanity rest on its capacity to create and invent new works in the areas of technology and culture.
2) The legal protection of new creations and this encourages the commitment of additional resources for further innovation.
And Lastly the third pros is that the 3) Promotion and protection of intellectual property spurs economic growth, creates new jobs and industries, and enhances the quality and enjoyment of life.
An efficient and equitable intellectual property system can help all countries to realize intellectual property’s potential as a catalyst for economic development and social and cultural well-being. The intellectual property system helps strike a balance between the interests of innovators and the public interest, providing an environment in which creativity and invention can flourish.
INTELLECTUAL PROPERTY HOLDERS IN A QUANDARY DUE TO COVID-19 PANDEMIC
While experts are in a combat mode and the race is on to discover the cure for COVID-19, the claim of intellectual property rights for exclusive use of the cure poses a dilemma as it is not considered the most rational thing to do at the moment.
Carlos Correa addressed to organizations like WHO, WTO and WIPO via an open letter to seek support for WTO countries that invoke the ‘security exception’ contained in Article 73 of the Agreement on Trade Related Intellectual Property Rights (TRIPS) Agreement, to take ‘actions it considers necessary for the protection of its essential ‘security interests’ in the wake of COVID-19 threat.
It has been suggested that invocation of exception under Article 73 will be warranted to procure medical products and devices or to use the technologies to manufacture them as necessary to take cue of the present public health emergency.
By suspending the enforcement of any Intellectual Property right as given under Article 73(b) of TRIPS Agreement, an obstacle for the procurement or local manufacturing of the medical equipments shall be necessary in order to protect the population of the world will be outlasted.
The question which is raised due to the above is regarding IP rights which are aimed to aid the public by promoting technological advancement in return of providing the inventor an exclusive right over the invention, though for a limited time. Though the IP rights are at a standstill due to the outbreak the IP Registry offices all over have limited their functioning.
TYPES OF INTELLECTUAL PROPERTY
Trade Mark: –
A trademark is used in order to identify a business entity and it also differentiates the goods made or services offered by a company or an individual. Names, Words, Logos, Colors, Packaging, Sounds (audible), Signs (visual) or any combination thereof are considered and can be filed as trademarks.
A trademark must be Unique and Distinctive in nature and must also avoid adjectives for eg efficient and Names of person or places (E.g. India). Even Obscene words, Religious or Government words or symbols (E.g. OM) and Common Shapes (Square) should be avoided.
The Trade mark means a mark used in relation to goods for the purpose of indicating a connection in the course of trade between the goods and some person having the right as proprietor to use that mark.
The function of a trade mark is to give an indication to the purchaser or a possible purchaser as to the manufacture or quality of the goods, to give an indication to the trade source from which the goods come or the trade hands through which they pass on their way to the market.
The Trade Marks Act, 1999 is an act which provides for the registration and better protection of trademarks for goods and services and for the prevention of the use of fraudulent marks. A trade mark is valid for a period of 10 years.
Case Name: The Coca-Cola Company v. Bisleri International Pvt. Ltd Case Citation: Manu/DE/2698/2009
Copyright: –
Copyright is an exclusive legal right granted to the creators of an intellectual work. The owner of a Copyright has rights to reproduce, translate, adapt, perform, distribute and must be publicly allowed to display the work, etc.
Registration is not mandatory since copyright comes into existence as soon as the intellectual work is created but it is recommended to register a copyright for better enforceability, since registered copyrights have more evidentiary value in court.
(a) Types of Works covered under Copyright:-
(1) Literary including Software – Books, Essay, Compilations, Computer Programs.
(2) Artistic – Drawing, Painting, Logo, Map, Chart, Plan, Photographs, Work of Architecture.
(3) Dramatic – Screenplay, Drama.
(4) Musical – Musical Notations.
(5) Sound Recording – Compact Disc.
(6) Cinematograph Films – Visual Recording which includes sound recording.
(b) Duration of Copyright:-
(1) Literary, Dramatic, Musical or Artistic Works – Lifetime of the author + 60 years from the death of the author.
(2) Anonymous & Pseudonymous Works – 60 years from the year the work was first published.
(3) Works of Public Undertakings & Government Works – 60 years from the year the work was first published.
(4) Works of International Organizations – 60 years from the year the work was first published.
(5) Sound Recording – 60 years from the year in which the recording was published.
(6) Cinematograph Films – 60 years from the year in which the film was published.
Case Name:- Indian Performing Rights Society Ltd. v. Eastern India Motion Picture Association Case Citation: – 1977 SCR (3) 206
Designs: – The Design Act, 2000 states that it protects the aesthetic and ornamental features of an object. As per the Act a 2D or 3D pattern of a handicraft, a product, or even an industrial commodity.
The Unique Selling Point (USP), protects the looks and feels of the product and it prevents the duplication of the product. An industrial design helps in drawing a customer’s attention and helps in increasing the commercial value of an article.
Case Name:-Cello Household Products v. M/S Modware India and anr Case Citation:- Notice of Motion (L) No. 209/2017 in Suit (L) No. 48/2017
Patents On the 4th December, 2018, The Ministry of Commerce and Industry released the draft (rules amendment) for Patents Act 1970. These rules are mainly amended with respect to international applications, patent opposition and a few form related extensions. The Central Government proposes to make these amendments in exercise of the powers conferred by section 159 of the Patents Act, 1970.In order to align with TRIPS, inventions which are not patentable have been included even, wider rights of patentee is incorporated. Uniform period of protection is 20years. Case Name: Bajaj Auto Limited v.TVS Motor Company Limited. Case Citation: JT 2009 (12) SC 103
5. Integrated Circuits
Semiconductor Integrated Circuits Layout Design (SICLD) Act 2000 states the meaning of Semi conductor Integrated Circuit as, a product having transistors and other circuitry elements designed to perform an electronic circuitry function. There are 2 types of designs as per the act:-
(i) Layout Design – A layout of transistors and other circuitry elements including lead wires which connects semiconductor integrated circuits.
(ii) Layout-Design Registry (SICLDR) is the office where the applications on Layout-Designs of integrated circuits are filed for registration. The jurisdiction of this Registry is whole of India. The Registry, as per the guidelines laid down in the Semiconductor Integrated Circuits Layout Design (SICLD) Act 2000 and the Semiconductor Integrated Circuits Layout-Design (SICLD) Rules 2001, examines the layout-designs of the Integrated Circuits and issues the Registration Certificate to the original layout-designs of the Semiconductor Integrated Circuits.
Case Name: Sunil Alag v. Union of India and Others Case Citation: W.P. (C) 8152/2013
6. Biological Diversity
The Biological Diversity Act 2002 was enacted to realize the objectives enshrined in the United Nations Convention on Biological Diversity (CBD) 1992 which was passed by the Lok Sabha on 2nd December 2002 and by the Rajya Sabha on 11th December 2002.
It recognizes the sovereign rights of states to use their own Biological Resources due to the scarcity and also to conserve it. The Act provides for a mechanism for equal sharing of benefits arising out of the use of traditional biological resources and knowledge. It is a federal legislation enacted by the Parliament of India for preservation of biological diversity in India.
Case Name: Environment Support Group vs National Biodiversity Authority Case Citation: W.P. No.41532 / 2012
7. Plant Varieties and Farmers
Protection of Plant Varieties and Farmer’s Rights Act of 2001(PPV & FR Act, 2001) confers right to breeders, researchers and farmers over their plant varieties. Reaching legislation with regards to establishing rights for farmers to save, use, exchange and sell farm saved seed.
The Act establishes nine rights for farmers of which the most important in this regard are the right to “seed” and the right to “compensation” for crop failure (Art. 39). Not only does the 2001 Act protect the rights of framers to save, use, exchange and sell farm- saved seed, it also seeks to ensure that these seeds are of good quality, or at least that farmers are adequately informed about the quality of seed they buy.
In addition, safeguards are provided against innocent infringement by farmers. Farmers who unknowingly violate the rights of a breeder are not to be punished if they can prove that they were not aware of the existence of such a breeder’s right (Art 42).
Case Name:- Monsanto Technology LLC & Ors Vs. Nuziveedu Seeds Ltd & OrsHigh Court of Delhi Case Citation: CS (Comm) 132/2016
The Geographical Indication of Goods:- The Geographical Indications of Goods (Registration and Protection) Act, 1999 states Geographical Indication as it is primarily an agricultural or food product, natural or a manufactured product (handicrafts, Handloom textiles or industrial goods) originating from a definite geographical territory. A product is considered to be manufactured in a territory if any one of the activities of either the production or of processing or preparation of the goods takes place there. It promotes the producers prosperity of goods which have been produced in the geographical territory.
It helps the producer community to differentiate its products from other competing products that are present in the market and generate goodwill around its products. Hence, it acts as a signaling device by helping consumers to identify genuine quality products.
Case Name:- Tea Board Vs ITC Limited on 20 April, 2011 Case Citation:- GA No. 3137 of 2010 CS No. 250 of 2010
It has been suggested that invocation of exception under Article 73 will be warranted to procure medical products and devices or to use the technologies to manufacture them as necessary to take cue of the present public health emergency.
CONCUSION
The above overview clearly depicts that India has adopted and adhered to the latest IPR Regime and it has forayed into the global trade competition with a double edged sword.
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