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Why You Need a Contract in Business and its Relevance in Your Business?

Why You Need a Contract in Business and its Relevance in Your Business?

Starting work without a signed contract means that your position isn’t clear, or even worse –it’s weak.
 

It provides a solid and concise foundation that will help you navigate the law and make sure that you are on the right side of it. Along with aiding to minimise disputes and resolve any problems that may arise; a contract will communicate to a client, not only the amount that they are required to pay, but also invoice and payment dates. It also means that the contract is legally enforceable and will be able to support you if you decide to take legal action.

 

Written contracts set out the rights and obligations of each party, and reduce the risk of uncertainty. Many businesses are put off by the cost of having a contract as well as terms and conditions drafted by a professional – but it far outweighs the potential cost that doing business with them could threaten later.

 

1. Provides certainty- Although while getting into business transactions, there is no such thing as zero uncertainty. Contracts provide some sense of security and certainty to both parties. A well-drafted contract specifies each parties’ expectation and mentions in depth all the aspects of the transaction hence providing more clarity and certainty to both parties.

 

2. Outlines the scope of Agreement- Like mentioned above, a well- drafted contract defines all the aspects of the transaction. It states important information like what kind of work is to be performed, how it is to be performed, due dates, payments, etc. It also defines the obligations and remedies in case of any breach.
 
 
3. Procedure for dispute resolution- What happens when there is a disagreement between you and the client? While lawsuit seems like the obvious answer. However, it isn’t a very effective way of resolving disputes. A contract specifies alternative means of resolution like mediation, negotiation, and arbitration. Most parties prefer going for these methods as a lawsuit can be expensive and time-consuming.
 

4. Protects both parties- Having a written contract provides security to both parties as it put pressure on the other party to meet its obligation. Having a written contract also makes it enforceable in court.

 

5. Provides Confidentiality-No Entrepreneur would want its companies secret getting out. To ensure that does not happen, a contract includes an NDA (Nondisclosure agreement), which protects confidential information. According to an NDA, transactions involve a third party. In case of disclosure, the concerned party will be subjected to the agreed suffering.
 
6. Helps in ending relationships neatly – A contract contains a termination clause that defines the provision for ending the relationship or canceling the contract with the other party. Since the contract is an agreement and is made with the consent of both parties, having a termination clause lays down the steps if one has to get out of the agreement. This helps in ending the business relationship on good terms. For eg – When your supplier of raw material suddenly cancels the deal, it can cause many problems like a sudden halt in production. A contract will require your supplier to give you prior notice before canceling the deal hence providing you time to look for a new supplier
 
7. Helps in keeping a record of the business – A written contract acts as a record of the business also showing the mutual consent of both parties. It contains all the relevant details about the transaction and can be used for future reference for things like delivery dates, payment methods, etc
 
8. Addresses the Unforeseen – A contract usually has a clause called “Act of God” which addresses the events that are beyond our control like natural disasters which makes it impossible to fulfil the contractual obligation. With this clause, in case of any unforeseen event, the concerned party won’t be deemed guilty for breach even though it failed to fulfill the duty.
 
9. Ensures timely payments – If mentioned in the contract, it ensures timely and accurate payment. Since it is legally binding, it also puts pressure on the parties to make timely payments. The contract also specifies the mode of payment and EMI options in case of large payments.
 
The above-listed points show how beneficial contracts are to entrepreneurs and how they can assist them in their business. One cannot separate contracts from business as they go hand in hand. Not only do contracts help in safeguarding the interest of the entrepreneur, but they also safeguard the interest of the employees working for the organization. Drafting a contract can be a challenging and time-consuming process. Therefore, it is advised that you should seek the help of a legal attorney to guide you through the process. A written contract ensures that strict legal action is taken in case of any breach. This in turn ensures that people in the future adhere to the rules stated in the contract.

Relationship between Business Entities and Law has to be Harmonious for Growth

Relationship between Business Entities and Law has to be Harmonious for Growth

President Theodore Roosevelt once said, 
“Ours is a government of liberty, by, through and under the law. No man is above it, and no man is below it.” whether the relationship between “Business Entities and Recovery Laws” is really smooth enough for growth?

 
Today the world is commonly recognized with rapid growth that requires a number of conditions that are not always strictly towards social development but shifting towards economic factor. Business entities and law needs to go hand in hand but are they really effective? It is often believed that India’s regulatory problems are due to the lack of regulatory standards and poor compliance to process. Due to the legal absence of appropriate and enforced legal rules the entire business society has to face the burden as its effect would be seen from corporation sector, banking system to overall each and every large business entity.

 
The First Pillar should focus on legally binding rules. Such rules are not only known for theory. They are actually enforced by the State on all relevant parties, and are subject to modification pursuant only to previously known procedures.

 
The Second Pillar must be of appropriate processes through which such rules are made, and through which they are either enforced in practice or are deviated from when necessary. The appropriateness of such processes will obviously differ according to the circumstances of each country. Legal procedure might succeed; however, they did not be arbitrary, and are based on a system of consultation with the people affected by the rules.

 
The Third Pillar of the legal framework must consist of efficient public institutions that are occupied by trained and dedicated individuals, are transparent and accountable to citizens, are bound by and adhere to regulations, and apply such regulations without arbitrariness or corruption. An efficient and fair judicial system serves as the final arbiter of a functioning legal system.

 
There is a saying that “Justice Delayed is Justice Denied”, but this applies to each and every case. There is a complete lack of focus on judges and the system. Apart from the overall number of cases (more than 3 crore) the country seems to ignore the loss of time and economy an individual or a business firm is putting. Despite judges working extremely long hours, why is that there is no serious dent being made in the mountain of delays? How long do different types of cases remain in the system and why? How can we maximize judicial time? Answers to these questions are most important to bring about change. However, no systematic effort has been made until recently to collect data that will help obtain the answers to these questions. The dictum ‘Justice should be done’ is satisfied by mere observance of the principles of natural justice. However, the principle does not end here. It extends further. Justice should manifestly be seen to be done. If this is ignored, then the decision would be affected, especially in cases where an allegation of bias or interest or favor is noticed and affording proper hearing is not approaching from the decision.

 
In the outbreak of Novel Coronavirus, the impact of physical, mental and economic strain can be seen every defaulter or a complainant is facing problem with no proper functioning of court. It’s peculiar to see court’s behavior towards different individual or association; one is receiving preferential treatment like top projects, travel perks and frees time. Meanwhile, the other person discovers that his requests are denied without reasonable explanation. It is nowhere wrong to say that court is equally liable in harassing the complainant or defaulter. A Firm waiting for the judgment but the court keeps on delaying, by the time judgment is given, the Firm has no value in market.

 
We can see that if you file a case in the Karnataka High Court today, at the very least, you could expect to be in court until the beginning of 2023. In these two years and eight months (969 days), you can expect to go to court about 12-13 times, as the average time between hearings in the Karnataka High Court is 78 days. For instance, regular first appeals (RFAs) constitute seven per cent of the total cases in the Karnataka High Court. On average, RFAs are pending for four years and three months (1,553 days). On the other hand, company petitions, although constituting a mere one per cent of the total cases in the Karnataka High Court, are pending on an average for six years.

 
Law is a set of rules and regulations drafted for the smooth functioning of the country and if one fails to abide by the rules, one can expect the whole society to fall apart, such as the power of law. This rule book is a way of keeping our justice system fair and ensuring that everyone complies with the law. It not only allows people to understand what is expected of them in their capacities but also sets forth rules for businesses so that they, too, know what is expected of them in their dealings and transactions. The rule of law plays an important role in the business world when setting up a business. Laws determine what type of business it is to become, it sets up reasonable expectations on how the business should operate, it creates an honest environment where consumers and business owners’ interests can be protected and we have ways to solve any disputes that arise Law provides guidance and direction in every area of business. A crucial component in the relationship between businesses and the law is that it creates the regulatory environment within which the business should operate. This means that the law creates rules that govern the business and how it operates from how its relationships between it and its employees are regulated, it would regulate how much and when it should pay tax as well as to whom, as well as how it should promote, sell or advertise it’s goods/services. Government policy highly influences interest rates. Higher rates lead to decreased consumer spending. Lower interest rates attract investment as businesses increase production. Taxation policy is one of the government policies that affect businesses directly because taxation is based on the amount of money earned by all businesses.
 
 
The business environment in India has a number of problems that adversely impact business. Aside from persisting bureaucratization leading to delay in approvals and clearances for business and structural factors such as poor quality of infrastructure, there are some policy and legal constraints that affect business. One very important factor is the regulatory framework. The regulatory framework in India, has not been conducive for business, either at the entry stage or during operations. Among the major impediments to the improvement of the business environment are business regulations/legislations originally formulated under the command and control. A plethora of government authorities continue to exercise wide discretionary powers, nailing business from their inception for minor procedural lapses. To illustrate the consequences, on an average starting a business in India takes twice as long as that in the region and because of various rules and regulations, formalities and procedures. Enforcement of these regulations and associated licenses unnecessarily hampers the smooth operation of business, and thereby unnecessarily increases the transaction costs of doing business, thus putting India at competitive disadvantage.

 
As India is a federal State, taxes are levied and regulated by both Central and State governments. The new system of tax neutrality does not differentiate luxury goods and normal goods which makes it difficult for small businesses to sustain. Under GST implementation, all goods and services pay the same tax which will lead to the rich becoming richer and poor becoming poorer. It is not an ideal situation for small industries and businesses competing against large businesses. In GST Council meeting, it was decided by the ministry that those assessments having turnover of less than Rs 1.5 crores will be assessed by state government and existing Service Tax assessments, irrespective of turnover will be assessed by the Central government as there is lack of expertise with the State Government in relation to Service Tax matters. As a result of this, small traders dealing in both goods and services will have dual administrative control both by Centre and State.

 
A lawful framework that empowers financial choice, advances moral and sound commerce hones, cuts exchange costs and empowers solid commercial dealings through reasonable contracts is as basic as great framework and sound arrangements. Our standing within the ease of doing commerce rankings is still moo basically since of the delays in our legal framework. Tragically, in spite of the fact that this issue has been decaying for more than a century, the law doesn’t seem to change.

 
We often talk of getting to be a financial superpower and wish to create our economy reasonable and straightforward. When we know this big business entities are the backbone of economy, yet the functioning of our judiciary fails to build a smooth relationship between business entities and law. An essential prerequisite for accomplishing this is a proficient and straightforward legitimate framework.
 

 

“Justice denied anywhere diminishes justice everywhere” – By Martine Luther King Jr. 

 
 

“Sufferer”/ “Aggrieved Party” / “Non-Defaulter”: Be Ready to Run for Recovering Money

"Sufferer"/ "Aggrieved Party" / "Non-Defaulter": Be Ready to Run for Recovering Money

Courts and Legislative wants the “Sufferer”/”Aggrieved Party”/Non-Defaulter” to do all homework for Recovery and Long Lasting Process and Ensuring of giving peace to Accused
 
The Purpose of Law is to ensure Sufferer gets justice but it seems that in recovery of money, the Law and Courts are ensuring and assuring the Peace and Long Lasting Time to Defaulter to come to the Court as if IBC was not enough to take away the rights of Awards passed in MSME and or Arbitration and or Decree via Courts.
 
Section 138 of Negotiable Instrument Act provides for the compensation to the complainant, and it also allows for the parties to reach a compromise during the pendency of a complaint. It encourages parties to settle disputes through the ultimate closure of the case rather than protracted litigation.
 
Ingredient of offence- drawing the cheque:
• Presentation of the cheque to the bank,
• Returning the cheque unpaid by the drawee bank,
• Giving notice in writing to the drawer of the cheque demanding payment of cheque amount
• Failure of the drawer to make payment within 15 days of receipt of the notice.
 
Recently the IN THE SUPREME COURT OF INDIA, CRIMINAL APPELLATE JURISDICTION, CRIMINAL APPEAL NO(S). 1206 OF 2021 (Arising out of SLP(Criminal) No(s). 7573 of 2014) ASHUTOSH ASHOK PARASRAMPURIYA & ANR (APPELLANT(S)) Vs M/S. GHARRKUL INDUSTRIES PVT. LTD. & ORS …RESPONDENT(S) = CRIMINAL APPEAL NO(S). 1207 OF 2021 (Arising out of SLP(Criminal) No(s). 9520 of 2014) = By Rastogi, J. = NEW DELHI = OCTOBER 08, 2021 has passed the Order of stating that “Summons To Directors Justified If Complaint Avers That They Were In and Responsible of Business Of Company” and the brief of the case is as under:
 
The case is of the complaint of a Private Limited Company which is engaged in the business of production and sale of spices named M/s Gharkul Industries Pvt Ltd and its directors. The Applicants approached the respondents for financial assistance. The two being well-known by each other, respondents provided financial assistance. The parties involved executed a Memorandum of Understanding with consent of all applicants and it was decided that the amount that was received would be returned within 1 or 2 years. An amount of Rs 1,50,19,831 was received by the applicants. On August 18, 2010, a letter was issued to the concerned applicants demanding their balance-sheet. It showed that as on 31/3/2012, the outstanding balance of the company was Rs. 1,49,94,831/-.
 
According to the Respondents, the Directors of the company are responsible for the conduct of the business of the company. Hence, they should be held responsible for the affairs of the company. Further on 2/6/2012, the Company issued a cheque in favour of respondent No. 1 for encashment of the said amount. However, the said cheque was dishonoured due to funds not sufficient.
 
The Respondents filed a complaint against the applicants under Section 138 of the said Act. The learned Trial Court issued the summons in the name of the applicants for the offences punishable under Section 138 of the NIA.
 
The Applicants filed a criminal application before the High Court praying for quashing and setting aside the criminal complaint filed by Respondent No. 1 as well as the summons issued by the learned Trial Court in pursuance of the complaint. The High Court affirmed the decision of the Trial Court. The Respondent approached the Supreme Court.
 
Analysis
The Supreme Court held that a person who has issued a bounced cheque does not sufficiently become liable referring the ruling of SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Another.
 
The person can be held liable only when he’s been in charge of the actions of the company at the time of their alleged wrongdoing. The Court explained that in order for a process to be initiated against a director, it is necessary to aver that the directors were in charge of the company’s business at the time of the offence under Section 138 read with Section 141 of the NI Act.
 
The Court noted that averment is very important because it is the basic averment that persuades the Magistrate to issue process against a Director. In cases where the basic allegation of a case is missing, a Magistrate may be justified in not issuing a process order, the Bench noted.
 
The Court has also ruled that before a Director is summoned for trial in a case, the Court must be satisfied that there is no prima facie evidence that shows that the Director was not involved in the issuing of cheques. The court noted that even if the basic allegation is there, the court may come to the conclusion that no case has been made out against the accused Director.
 
The Supreme Court has held that the Directors of a company were not signatories to the company’s cheques. However, it is clear that the allegations are that at the time of the cheques being issued and dishonoured, the Directors were responsible for the company’s business, the court noted.
 
The context of this case is that now the Person who is filing the case under Section 138 has to ensure and is being presumed of assumption that the Complainant shall be aware of which Director signed the Cheque, who were taking care of the business and others and if not, then Section 138 cannot be filed. This is purely ridiculous for reasons that a business person has to do business and there is no way of such person being given the information as to who has signed and who is responsible and such in this case, the whole concept of Section 138 for Business is ZEROED. The Laws off late and Judgements has just been getting more technical and infact making the Aggrieved Party to run and chase Accused and there is no balance being made. For reasons, even after getting Order against Accused and Accused don’t pay, the only option is Decree and for that it takes a year or two years and then if done, then it is the duty of the Complainant to know the Property Details to get attached and to find out it is next to impossible. There is no way the Courts and Laws intent to make simpler way for recovery of money which is very sad and damn bad
 
The Law is with Accused/ Default Party- how fair is this?
The law is with accused and default party which means that the Constitution never denies any right to anyone be it accused or victim in other words laws are uniform to every citizen. Article 21 of the Indian Constitution states that. “No person shall be deprived of his life or personal liberty except according to procedures established by law.”
  
Yet the question arises is it fair?
How fair is the law when it comes to practicality? They say the framers of the constitution have framed laws which wouldn’t discriminate anyone with regards to gender, caste, religion, class etc. or even accused yet in the case of Ashutosh Ashok Parasrampuriya & ANR. V.s Ms. Gharrkul Industries Pvt. Ltd & Ors, the Supreme Court held that a person who has issued a bounced cheque does not sufficiently become liable referring the ruling of SMS Pharmaceuticals Ltd. v. Neeta Bhalla and Another.
   
The person can be held liable only when he’s been in charge of the actions of the company at the time of their alleged wrongdoing. The Court explained that in order for a process to be initiated against a director, it is necessary to aver that the directors were in charge of the company’s business at the time of the offence under Section 138 read with Section 141 of the NI Act.
  
Section 141 of Negotiable Instruments Act shows that person who is in charge or responsible to the company is by act liable and deemed to be guilty only if offence is committed with his consent or due to any neglect on his part. Similar is the case with any Director, Manager, Secretary or other officer of company. If such person shows that offence was committed without his knowledge or that he had exercised due diligence to prevent commission of such offence, he may be immune from prosecution.
  
Here the Director has a scope by manipulating the respondent by withdrawing his or her responsibility in company and getting away by the crime. The aggrieved party or the entrepreneur not only loses faith in company but towards law too.
  
Today Trial Court’s main aim is to ascertain truth to the victims, accused society in large. Every person has the right to be treated and dealt fairly. Denial of trial is denial of justice. Our constitution has enshrined the right to defend under Article 21 of Constitution of India. Our country follows the principal of every accused is presumed to be innocent until proved guilty. At the same time if accused is found threat to society is held in custody for the time being.
  
Today the right to a reasonable trial isn’t unused, but the quality and nature of the challenge. The number of individuals specifically included in criminal equity is developing as new cases are emerging every day. Countries develop faster mechanisms for imposing sanctions, usually without trial; “international war terrorism” and the erroneous political rhetoric of “re-aligning” criminal justice systems to make us safer have a negative impact; dictators and dictatorial regimes find new ways to use criminal justice as a tool of oppression; and human rights are facing new threats from increasing cross-border cooperation to fight crime.
  
We are working toward a worldwide objective. We can’t get there overnight, and we can’t do it for ourselves. But with each step we take towards our vision of a world where everybody is entitled to a reasonable trial, we ensure individuals from the manhandle of equity and make reasonable and compelling criminal equity frameworks that advantages all.
  
The existence of corporation in the commercial world is almost like a money hunger. Today MNC see nothing but profit so is the laws made in favour of them. Assume a Chief of a company being charged beneath section 141 of NI Act but court rules out the judgment in support of Chief by expressing that the offence was committed without Executive’s information or that he had worked out due perseverance to avoid commission of such offence, he may be safe from arraignment. In any case, how is that the executive of a company where each detail of company rotates around him/her isn’t dependable for the previously mentioned offence? For occurrence when a bargain is marked between a company and person, how can a person know which chief signed the cheques, how can one anticipate the person to be mindful of each individual of company. It’s the court function that ought to examine the reality. This tosses an impressive sum of address on the composers of the law, for making this law so one-sided which should be transformed for demonstrating its straightforwardness towards society.
 
 Hence, the saying law is with accused and default party may not be reasonable because it is obtrusively made a law which makes the accused free. What must be taken into consideration is the legitimate saying Audi Alteram Partem which suggests listen both the side but too make law which is uniform for both parties.
 
Law is Equal “as said by Courts and Parliament”, Let’s find out how and where for Business Entrepreneurs

Importance of Written Contracts in Business

Importance of Written Contracts in Business

Importance of Contract in business
 
An entrepreneur has 99 problems and a contract can help solve almost half of them. A well-drafted contract is a key to a good and healthy business. One cannot even imagine starting a business without getting into a contract: from signing purchasing raw material from a vendor to hiring an employee everything is bound by a well-drafted contract or a written agreement. A contract is a written or spoken agreement concerning employment, sales, and other aspects and is enforceable by law. Now imagine getting in a transaction in older times, where two parties agreed to trade in barter, both the parties honored their commitment and the transaction was complete. Now imagine doing the same in the 21 st century, where we are all aware of the history of frauds in the corporate world. This is where contracts come into the picture. It lays down the expectations for both the parties and also protects both the parties as it is legally binding.
 
Importance of Written Contract
In Roop Kumar v Mohan Thedani (AIR 2003 SC 2418), the Supreme Court outlined the significance and consequences of reducing a contract into writing. It observed: “The integration of the act consists in embodying it in a single utterance or memorial- commonly, of course, a written one. This process of integration may be required by law, or it may be adopted voluntarily by the actors either wholly or partially. Thus, the question in its usual form is whether the particular document was intended by the parties to cover certain subjects of transaction between them and, therefore, to deprive of legal effect all other (oral) utterances”. “The practical consequence of integration is that its scattered parts, in their former and inchoate shape, have no longer any jural effect; they are replaced by a single embodiment of the act. This rule is based upon an assumed intention on the part of the contracting parties, evidenced by the existence of the written contract, to place themselves above the uncertainties of oral evidence and on a disinclination of the courts to defeat this object. Written contracts presume deliberation on the part of the contracting parties and it is natural they should be treated with careful consideration by the courts and with a disinclination to disturb the conditions of matters as embodied in them by the act of the parties.”
 
For those of us involved in regular business transactions as a part of our professions, even a normal exchange of goods or services often makes us wish that we had had a contract in writing with the opposite party. This is usually because most of us believe that several kinds of transactions work well on trust, but when things are ambiguous or go awry, we realize that a written document should have been in place and regret avoiding one to begin with. Thus, while written contracts are usually circumvented in day-to-day business transactions to do away with complications or avoid “bad blood”, one usually ends up creating more by choosing not to have them!
 
Contracts form the foundation of all business relationships. But with a growing number of contracts, an increasing complexity and the ongoing need for amendments, it becomes challenging to manage the valuable information in the contracts. Contract management is the process that enables both parties to a contract to meet their obligations in order to deliver the objectives required from the contract. It is a Relationship Management. It also involves building a good working relationship between customer and provider. It continues throughout the life of a contract and involves managing proactively to anticipate future needs, as well as reacting to situations that arise. In other words, Contract management is the management of contracts made with customers, vendors, partners, or employees. Contract management includes negotiating the terms and conditions in contracts and ensuring compliance with the terms and conditions, as well as documenting and agreeing on any changes that may arise during its implementation or execution. It can be summarized as the process of systematically and efficiently managing contract creation, execution and analysis for the purpose of maximizing financial and operational performance and minimizing risk. Contract management contributes significantly to a company’s financial health and is viewed as a strategic weapon in optimizing contract performance and improving the return on investments.
 
A contract is a formal document, accepted by both parties, employer and employee, and is the base for any flourishing business. Contracts provide better visibility to meet the duties and achieve the objectives as agreed per the agreement. It serves as a great support for building a good rapport with the customer or the desired party.
 
Concerning this, Contract management is a strategy adapted to manage contracts legally signed with customers, partners, or employees. Contract management includes adjusting the terms and conditions in contracts and ensuring adherence to the rules as per contract. Contracts guarantee a standard business procedure, by giving clarity of your requirements. It helps to achieve the desired goals easily and serves as proof in case the expectations of one party is not fulfilled. It is viewed as breaching the contract and the person has to bear the loss for the service.
 
It is important to get your contract drafted and approved by a lawyer legally.
 
Why do you need a contract? The main reason that you need a contract is to protect your rights when you enter an agreement with another party. For example, if you agree to help someone complete a project in exchange for money, you might have trouble getting the person to pay you if you don’t have a valid contract in place.

Brief Note on Summary Suits and Summons

Brief Note on Summary Suits and Summons

A Summary suit procedure is provided under Order XXXVII of the Code of Civil Procedure, 1908. It is a procedure that takes place faster compared to the ordinary procedure because in this procedure the court has the right to pass judgments without hearing the defense of the defendant. Even though this may seem like a violation of the rule Audi Alteram Partem which means that the court shall hear the other side as well, this summary procedure is specific to only those cases where the defendant has no defense and applies to only limited subject matters. The main purpose of a summary suit is to ensure that the proceedings and the disposal of the suit are taken place expeditiously to prevent unreasonable delay and obstruction by the defendant who already has no defense.
 
These summary suits are only limited to cases in which the plaintiff seeks to recover a debt or liquidated demand in money payable by the defendant which may be with or without interest, or for the recovery of immovable property which may be with or without a claim for rent or mesne profits, by a landlord against a tenant whose term has expired or has been duly determined by notice to quit, or has become liable to forfeiture for non-payment of rent, or against persons claiming under such tenant; and also against documents such as a bill of exchange, hundies, and promissory notes.
 
Such a suit can be instituted in High Courts, City Civil Courts, Courts of Small Causes and any other court notified by the High Court. The high court has the power to vary, enlarge and even restrict the category of suits to be brought under this order. A bill of exchange is a written unconditional order by one party to another to pay a certain amount either immediately or on a fixed date in exchange for goods and services. While hundi is also an unconditional order, it is slightly different from a bill of exchange because here party no.1 directs party no.2 to pay a certain amount to party no.3. It is an order made in writing by party no.1 and given to party no.2. It is usually used for credit purposes. A promissory note is an unconditional written promise to pay a certain amount mentioned to any person presenting the note. A liquidated demand in money is demand for a fixed sum of money.
 
Rule 2 of Order XXXVII mentions the institution while Rue 3 lays down the procedure. Rule 2 specifies the nature of the suit as well as also mentions that The summons of the suit have to be in the way specified in form no. 4 appendix B and the defendant does not have the right to defend himself unless he has made an appearance in the court. The first and foremost procedure after institution of the summary suit is that the defendant is to be served with a copy of the summons and within 10 days of such service the defendant is supposed to make an appearance, either himself or through his advocate, and shall also file a notice of appearance in the court. Further to this step, the plaintiff shall serve the summons of judgment mentioned in Form no. 4A in appendix B along with an affidavit verifying the cause of action and the amount claimed and stating that in his belief there is no defense to the suit. Within 10 days of service of such summons of judgment, the defendant has to apply for leave to defend the suit. Leave to defend may be granted to him unconditionally or upon such terms as may appear to the Court or Judge to be just.
 
The defendant can be granted leave to defend unconditionally if he satisfies the court that he has a substantial defense, if he raises triable issues indicating that he has a fair or reasonable defense, he may be granted conditional leave if the trial judge doubts the defendant’s good faith or if the defendant raises a defense which is plausible but improbable and he will not be granted any leave at all if the defendant has no substantial defense and raises no genuine triable issue or if the amount claimed by the plaintiff is admitted and due by the defendant but has not yet been deposited in the court. And at the time of hearing of such summons for judgments, If the defendant has not applied for leave to defend, or if such an application has been made and refused, the plaintiff becomes entitled to the judgment forthwith. And If the conditions on which leave was granted are not complied with by the defendant then also the plaintiff becomes entitled to judgment forthwith. If the court deems fit, it can grant leave to the defendant and set aside the decree, the court may also ask for the bills, notes, hundis, etc to be deposited with the officer of the court. Further Sub-rule (7) of Order 37 provides that under this order the procedure in summary suits shall be the same as the procedure in suits instituted ordinarily.
 
Rule 17 of Order 5 of The Code Of Civil Procedure, 1908 lays down the procedure when the defendant or his agent refuses to sign the acknowledgment or accept service, or where the serving officer, after using all due and reasonable diligence, cannot find the defendant, who is absent from his residence and there is no other person present to accept service of the summons on his behalf, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business, and shall then return the original summons to the Court attaching a report stating that he has affixed the copy and mention the circumstances under which he did and also the name and address of the person by whom the house was identified and in whose presence the copy was affixed. Then the court shall examine the serving officer on oath, may make such further inquiry in the matter as it thinks fit; and shall either declare that the summons has been duly served or order such service up to his discretion. Rule 20 of order 5 speaks about Substituted service. Wherein if the Court is satisfied/believes that the defendant is intentionally avoiding service, or the summons issues cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy in some conspicuous place in the Court-house, and also upon some conspicuous part of the house (if any) in which the defendant is known to have last resided or carried on business or in such other manner as the Court thinks fit. If the Court orders service by an advertisement in a newspaper, the newspaper shall be a daily newspaper circulating in the locality in which the defendant is last known to have actually and voluntarily resided or carried on the business. Service which has been substituted shall be treated as if it had been made on the defendant personally. The court shall also fix a time for the appearance of the defendant as per its discretion. Under rule 21 of order 5 covers service of summons where the defendant resides within the jurisdiction of another Court in which summons may be sent by the Court whether the defendant resides within or without the State, either by one of its officers or by post or by such courier service as may be approved by the High Court or by fax message or by Electronic Mail service or by any other means as may be provided by the rules made by the High Court to any Court having jurisdiction in the place where the defendant resides. By rule 25 of order 5, summons can be sent if the defendant resides out of India and has no agent. The summons shall be addressed to the defendant at the place where he is residing. for example, if the defendant resides in Bangladesh or Pakistan, the summons, together with a copy may be sent to any Court in that country (not being the High Court) having jurisdiction in the place
where the defendant resides.
 
Order 37 of the Code of Civil Procedure, 1908, has elaborately laid down the mechanism for speedy litigation; it enables the plaintiff to recover his money where the defendant has admitted his liability. It makes sure that through this procedure there is no unreasonable delay on the part of the defendant as seen in actual practice that the only notice of the defendant is to prolong the case. The plaintiff is entitled to judgment unless the defendant has a solid reason to defend his case in these matters. In a summary suit, the plaintiff almost immediately receives relief on which he has prayed before the court. Thus, the issuance of summons twice in a summary suit defeats the whole purpose of an expeditious trial by the court.
 
It is very important that a person gets justice and on time. Indian legal mechanism is particularly infamous for this particular aspect of delay in providing justice which ultimately defeats if not fully, at least partially the purpose of the whole trial. If a summary suit trial is not made in a speedy manner, it cannot be deemed as fair. It is unimaginable how much loss our nation and the people are suffering, because of the delay in disposing of the cases. Innocent people are the worst affected, who depend on courts for getting justice, which he can never calculate as to when so-called justice is finally arriving. None can compute his worries and the frustrations. Such sufferings and hardships only conclude that Delayed Justice is Denied Justice. It is obvious to say that inordinate and unnecessary delay defeats the end of justice. Even though The Apex Court in its various landmark judgments held that “right to speedy trial is a fundamental right which is implicit under Art. 21 of the Constitution”, it is hard to see courts actually working for it. While delivering Summons, it is a process to compel the attendance of the defendant in the matter at point to appear and file his answer which generally people try to evade the process of summons just to buy some time. It delays the speedy trial. Even though the whole purpose of a summary suit is to expeditiously complete the process and provide justice, this process of issuing summons twice only delays the process which results in people not believing in our justice system anymore. While the ‘service of summons’ appears to be simple and straightforward in theory, it has in fact turned tedious in practice. The problem of delay and huge arrears stares us all and unless we can do something about it, the whole system would get crushed under its weight. We must guard against the system getting discredited and people losing faith in it and taking recourse to extra legal remedies with all the sinister potentialities. The Indian judiciary is the last hope for citizens of India. There is a need for the judiciary to bring back people’s faith in them, it still has time to make amends for the people of the nation.

Brief Note on MSME

Brief Note on MSME

The Micro, Small, and Medium Enterprises have become the backbone of the Indian economy and play a key role in supporting the manufacturing sector. It contributes substantially as an ancillary unit in the comprehensive development of large industries and the socio-economic development of the country. Both manufacturing enterprises and the service sector are classified under the provisions of MSME. The Micro, Small, and Medium Enterprises Development Act, 2006 is an act to facilitate the promotion and development and enhance the competitiveness of MSMEs’and for matters connected therewith or incidental thereto. A single comprehensive act for development and regulation of small enterprises had been a long outstanding demand of the sector to free it from a plethora of laws and regulations and visits of inspectors, which it had to face with limited awareness and resources. the need has been emphasized from time to time by stakeholders at different fora. in addition, recommendations to provide for a proper legal framework for the small sector to relieve it of the requirements to comply with multiple rules and regulations were made by the committees such as the abid Hussain committee (1997) and study group under Dr. S.P. Gupta (2000). While the small-scale industries continued to be important for the economy, in recent years the small-scale services have also emerged as a significant sector contributing substantially to the economy and employing millions of workers. Therefore, it became necessary, as is the practice worldwide, to address the concerns of both the small-scale industries and services together and recognize them as small enterprises. In a fast-growing economy like ours, the natural mobility of small enterprises to medium ones has to be facilitated through appropriate policy interventions and legal frameworks. With these objectives in view, the government came with exclusive legislation for micro, small and medium enterprises known as the Micro, Small, and Medium Enterprises Development Act, 2006.
 
The provisions of the MSME Act pertaining to payment of consideration and recovery of outstanding dues apply to a transaction for the sale of goods or supply of services between a ‘supplier’ and a ‘buyer’. The term ‘buyer’ is defined under section 2(b) of the MSME Act to mean whoever buys goods from a supplier for consideration. The term ‘supplier’ is defined under section 2(n) of the MEME Act to mean a micro or small enterprise that has filed the entrepreneurs’ memorandum/Udyog aadhar with the concerned authority. It should be noted the term ‘supplier’ does not include medium-scale enterprises within its scope for the MSME Act. Hence, medium-scale enterprises would not be eligible to claim benefits of the provisions of the MSME Act applicable to outstanding dues.
 
To recover your money under MSME the first step is to have proper documentation for all the supplies made by the seller to your buyers, the most important part is to have a written purchase order and an invoice to establish the fact that there is a business relationship between the buyer and the seller or else your ordeal doesn’t get converted into a case by the MSME Samadhan i.e., the application for the delayed payment gets rejected. In such a scenario establishing that the seller company has/had a business relationship with the buyer through presenting documents such as invoice alone or delivery challan or any other document as an alternative doesn’t work as an acceptable document for consideration of the case under MSME Samadhan. Further, it is also mandatory to mention the seller companies’ uan aadhar number and that the payment of money is mandatory within 45 days of delivery.
 
The listed process below shall be approached by MSME Entities before the MSME Samadhan body,:-
 
1. It is mandatory to have registration of company/LLP/partnership etc. as an MSME and obtain an MSME certificate. 
2. It is mandated to record all formal purchase orders from its clients and procure the delivery proofs for all such orders.
3. It is necessary to mention in each invoice, “your entity/establishment name and uan” described with a note that “delayed payments beyond 45 days attract a rate of interest at a current rate three times of the bank rate as per notified by rbi, compounded with a monthly interest”.
 
In case any clients delay your payments unreasonably beyond the specified time of 45 days, you are allowed to directly inform them that you shall be approaching the MSME Samadhan for such pending payments if they do not make the required days payment. And they still are incapable of responding or releasing the payment, you have the right to file a complaint at www.samadhan.MSME.gov.in. The liable client would receive a notice from the Micro and Small Enterprise Facilitation Council (MSEFC) asking them to respond with compliance in a specified period (usually 15~30 days).
 
In the MSME Act, section 15 provides that where any supplier supplies goods or renders services to any buyer, the buyer is obligated to make the payment for such supply on or before the following dates: –

1. Where the date of payment is not agreed between the parties – payment is required to be made within 15 days from
(i) the day of actual delivery of the goods, where no objection in writing is raised by the buyer or
(ii) where any objection is raised by the buyer in writing, then the day on which such objection is removed by the supplier

2. Where the date of payment is agreed in writing between the parties– on the agreed date provided such date shall not exceed 45 days from
(i) the day of actual delivery of the goods, where no objection in writing is raised by the buyer or
(ii) where any objection is raised by the buyer in writing, then the day on which such objection is removed by the supplier.
 
According to section 16 of the act, it is provided that where the buyer fails to make payment to the supplier within the period as stipulated under the provisions of section 15 of the MSME Act, then the buyer shall be liable to pay compound interest to the supplier on the dues, from the date of default. The prescribed rate of such compound interest is three times the bank rate notified by the Reserve Bank of India. The existing bank rate of interest can be checked on the RBI’s website under the policy rates.
According to section 17 of the act, it is provided that for the goods supplied, the buyer shall be liable to pay the amount with interest thereon.
 
Section 18 of the MSME Act provides that where the buyer fails to make the payment of the principal amount of dues or the interest arising thereon as per section 16 of the MSME Act, then the supplier can file its complaint with the micro and small enterprises facilitation council (‘MSEFC’). The government of India has launched the MSME Samadhan portal for ease of filing such complaints. In case of a dispute regarding any claim due as above, an approach shall be made to the Micro and Small Enterprises Facilitation Council (MSME-FC) constituted by the concerned state government. Every request made shall be decided within the 90 days’ time limit.
 
According to section 19, any request to uphold and set aside the arbitration award shall not be entertained and framed by the court of law until the applicant has deposited 75 % of the amount awarded by the MSME Samadhan council.
 
Penalty for non-disclosure in annual accounts or form MSME-1 under the MSME Samadhan council laws. The purchaser should mention the amount overdue for release payment to the MSMEs unit in its annual audited financial statements and shall also file details of such overdue in form MSME-1 for outstanding balances.
 
Any such violation to disclose such amounts shall further be charged a penalty, not less than Rs. 10,000 under the MSMEd act. In addition to the non-compliance penalty imposed by the ROC (MCA) under Section 405(4) of the Companies Act, in case the purchaser is a company.
 
Section 22 of the MSME Act provides that where the buyer is required to get his annual accounts audited under any law, then the buyer is required to furnish in its statement of annual accounts, the details of the principal amount and the interest due to any supplier as at the end of a financial year. Similarly, under the provisions companies act, the buyer (being a company) who has outstanding dues towards a supplier is required to submit form MSME-1, providing details of the outstanding dues and the reasons for the delay in payment of dues. Failure to file the form MSME -1 attracts penal consequences for the buyer.
 
According to section 23 of the act, it provides that the amount of interest payable or paid by a buyer to a supplier under section 16 of the MSME Act shall not be allowed as a deduction for computation of income under the provisions of the income tax act, 1961.
 
Under the act, the dispute resolution mechanism overrides the arbitration clause incorporated in any of the contracts between such MSME and its clients. This overriding effect originates from Section 24 of the act. As a first step, the MSEFC shall initiate conciliation proceedings to resolve the dispute between the buyer and supplier. where the conciliation proceedings fail and there is no settlement between the buyer and seller, then the arbitration proceedings are initiated for the resolution of the dispute. such arbitration proceedings are governed by the provisions of the arbitration and conciliation act, 1996.
 
The MSME department also examines applications filed by MSME units and if the application is complete in all respects then the department will issue directions to the buyer unit for payment of due amount along with interest as per the provisions under the MSMED Act 2006.

Arbitration

Arbitration

What is Arbitration?
 
‘Arbitration is a process in which disputing parties by agreement decide to peacefully resolve their dispute by referring to an arbitrator or the arbitral tribunal. By choosing this mode, one eliminates the traditional Court Procedure and has opted for a way to resolve their dispute alternatively. In this modern world, where time is our priority, Arbitration is the best way to go forward rather than wasting an indefinite amount of time in the courtrooms. Arbitration provides a fair trial to both the parties through mutual agreement without any delay in the process and at the same time without any unnecessary expense. There does prevail a huge misconception that arbitration has replaced the judicial mechanism of litigation but in my opinion, it co-exists with it, arbitration has enhanced and has provided viable options to the parties in an alternative way to settle their disputes out of the court speedily and cost-effectively. The main objective of arbitration is to provide an unprejudiced and impartial settlement of disputes without causing delay or huge expenditure, with the parties willing to agree upon the mode in which their conflicts should be resolved.
 
Types of Arbitration
 
Two forms of arbitration are recognized all over the world, Ad hoc arbitration and Institutional Arbitration and when spoken specifically about India, Ad hoc arbitration has received tremendous amounts of recognition when compared to institutional arbitration. Ad hoc arbitration is the process in which the parties have the liberty to make decisions about the number of arbitrators, how they are appointed, place and seat of the arbitration, clauses of the agreement, the procedure for conducting the arbitration, etc. under the Arbitration and Conciliation Act, 1996 and hence the question whether an association can have their own arbitration rules and also be legal in nature under the arbitration act is in affirmative as the act provides the parties with such power. 
 
All about Ad Hoc Arbitration 
 
The parties who have agreed in a contract to seek ad hoc arbitration after a dispute, have the option to negotiate a completely new set of rules, and procedures as per their requirement and discretion. They can amend provisions for the administration. The parties can adopt a whole set of rules from an arbitral institution, these rules have been drafted specifically for ad hoc arbitral proceedings in the “UNCITRAL Rules” or the “CPR rules” which can be used in domestic as well as international cases. They can adopt these rules without even referring their disputes to that institution. The biggest advantage to parties in ad hoc arbitral proceedings is that they can block dates for hearing as per their schedule, saving their time if going through the normal court proceedings where trials and hearings can go up to years.
 
Furthermore, In ad hoc arbitrations, the fees can be negotiated directly between the parties and the arbitrators giving them the option to negotiate. Fees are generally fixed according to the status of the Arbitral Tribunal. An ad hoc arbitration process does not even charge the administration fees whereas charges levied by an arbitral institution constitute a hue portion of the overall costs. Hence we can conclude that ad hoc arbitration is an easier, cheaper, and speedy process.
 
This procedure gives parties greater control over the arbitration process, the flexibility to decide the procedure provided the parties decide to cooperate, it also requires effort and expertise from the parties to determine the arbitration rules. The arbitral mechanism is structured specifically for a particular agreement or a dispute. If the parties cannot agree on such an arbitral agreement which is laid down by the arbitral tribunal once the arbitration has begun, it will be resolved by the law of the seat of arbitration. Therefore, It is preferable at least to specify the place or ‘seat’ of the arbitration as well since this will have a significant impact on several vital issues such as the procedural laws governing the arbitration and the enforceability of the award. The Commercial Courts Act has set up commercial courts at the district level and commercial divisions in High Courts having ordinary original civil jurisdiction. These commercial courts/divisions hear arbitration matters involving commercial disputes amongst other commercial matters. Parties also have the liberty to initiate court proceedings before, after, or during the arbitral proceedings and can even enforce it at the stage of arbitral awards. One of the many reasons that parties are hesitant to opt for the arbitration process is because of the high pendency of litigation before Indian courts. The major benefit to agreeing to arbitrate after the dispute is because arbitration can be conducted under rules tailored to the dispute rather than under what may have been a ‘one size fits all’ set of rules.
 
All about Institutional Arbitration
 
In an institutional arbitration, the arbitration agreement designates an arbitral institution to administer the arbitration. The parties then submit their disputes to the institution that intervenes and administers the arbitral process as provided by the rules of that institution. It is pertinent to note that these institutions do not arbitrate the dispute, it is the arbitrators who arbitrate and only the rules of the institution apply. And arbitral institutions do not provide the same services. Some institutions of high reputation simply offer a set of rules and guidelines, and no other arbitral services. One such illustration is the London Maritime Arbitrators Association. There are other institutions, which provide rules and a roster of qualified arbitrators but are not involved in the appointment of arbitrators; Certain groups of institutions supervise the whole arbitration process from the notification to the defending party of the claimant’s request for arbitration to, and including, the notification of the arbitral award to the parties. For instance the International Court of Arbitration of The International Chamber of Commerce.
 
In Institutional arbitration, a well-tried and tested set of arbitral rules are set out in a booklet. Parties who agree to submit any dispute to arbitration in accordance with the rules of a named institution effectively incorporate that institution’s book of rules into their arbitration agreement. Automatic incorporation of a book of rules is one of the principal advantages of institutional arbitration.
 
Institutional arbitration refers to settlement of disputes through established institutions where in its rules of procedure are well defined. In other words, an institutional arbitration is the one in which a specialized institution intervenes and takes on the responsibility of administering the arbitration process. Such institutions’ when they come into existence for arbitrating the disputes, help in quickening the process by providing support in the form of appointment of arbitrators, case management services including oversight of the arbitral process, venues for holding hearings etc. Each institution has its own set of rules which provide a framework for the arbitration, and its own form of administration to assist in the process. The institutional arbitration is based on the UNCITRAL model of law.
 
The advantages of institutional arbitration are as follows: Firstly, efficient administration is of paramount element involved in institutional arbitration. Institutions established for the purpose of arbitration consist of experts as well as trained staff. And for the administration of the arbitration process, the parties are allotted such experts who with their expertise and adequate knowledge resolve the disputes adhering to the predefined rules or procedure of the concerned institutional arbitration. It is the duty of the administrative staff to frame rules, ensure that the time limits are being complied to, and the process is going ahead as smoothly as possible. Secondly, the rules and procedure are pre-determined and are fixed by the institution itself. As these institutions have experience of arbitrating numerous matters and are well versed with the eventualities, if any. Hence ambiguity is less likely to occur as procedures are laid down considering all the possibilities of any kind of disagreement during the process of settlement. Thirdly, parties have an autonomy to select an arbitrator possessing necessary skills, expertise and experience to provide a quick and effective dispute resolution process. Moreover, arbitral institutions hire such experts, who specialize in wide areas of law and possess necessary competence. Big institutions like ICC have a network of national committees for appointment of arbitrators to ensure that there is no bias towards the country to which the parties belong. Fourthly, the fee charged by the arbitrators is another vital advantage of this mode of arbitration. The fees or remuneration of the arbitrators under institutional arbitration is already fixed. It avoids disputing parties to quibble with the arbitrators to decide the terms and amount of remuneration. Hence, the terms relating to arbitrators’ fees and related thereto is decided with the disputing parties in the beginning itself. It eases the process of settlement by saving parties time and effort of determining the arbitration procedure. Another merit of institutional arbitration is that the parties and the arbitrators can seek assistance and advice from the institutional staff, responsible for administrating international commercial arbitrations under the institutional rules. Thus, doubts can be clarified or a deadlock can be resolved without court intervention. Whereas in ad hoc arbitration, the parties would be compelled to approach the Court, in order to take the arbitration forward and consequently, the perceived cost advantage of ad hoc arbitration would be negated by the litigation expenses. Also, the institutional staff constantly monitors the arbitration to ensure that the arbitration is completed and an award is made within reasonable time and without undue delay. Further the draft clause is that it is revised periodically by the institution, drawing on experience in conducting arbitrations regularly and approved by arbitration experts, taking account of the latest developments in arbitration practice. This ensures that there is no ambiguity in relation to the arbitration process. On the other hand, ambiguous arbitration clauses in ad hoc arbitration compel parties to seek court intervention in order to commence or continue the arbitration.
 
Many incredible organizations, world-wide, have the capability and the know-how to deliver this service. Within the boundaries of India, to name a few, some of the prominent arbitral institutions are the Indian Council of Arbitration (“ICA”), the Delhi International Arbitration Centre (“DIAC”), the Mumbai Centre for International Arbitration (“MCIA”) and the ICADR. These institutions have their own sets of arbitral rules, panels of arbitrators and offer venues for conducting arbitral proceedings. They offer varying degrees of administrative support for arbitrations. And when talking about international commercial disputes, institutional arbitrations like these mentioned above are more suitable since it provides established and up to date arbitration rules, support, supervision and monitoring of the arbitration, review of the awards and strengthens the awards’ credibility.

Atrocities and POCSO

Atrocities and POCSO

 

 

 

PREVENTION OF ATROCITIES ACT, 1989
 

 

 

 

The Scheduled Castes And The Scheduled Tribes (Prevention Of Atrocities) Act, 1989, is a legislation created with the purpose of prevention of committing atrocities against the members of the Schedules Caste and Scheduled Tribes.

 

Atrocities is defined under Section 2(1)(a) as any offence punishable under section 3 of the Act. Section 3 lays down various acts which count as offences, which are committed by people who are not members of Scheduled Caste or a Scheduled Tribe, on members of Scheduled Caste and Scheduled Tribe.

 

 
PROTECTION OF CHILDREN FROM SEXUAL OFFENCES (POCSO) ACT, 2012
 

The POCSO Act, 2012 is a legislation made to protect children from various sexual offences, such as sexual assault and sexual harassment and pornography. This act also aims to ensure that interests of the children are safeguarding throughout the stages of the judicial process, by incorporating child friendly methods and mechanism in every step.

 

 

Both of these legislations have been created to protect the interests and facilitate safety towards different groups of people, one catering to the SC and ST group and another to children. However, sometimes there are acts which can fall simultaneously into both the groups. It is also no secret that someone accused under these acts suffer a severe damage.

 

 
RIGHTS OF THE ACCUSED
 
Right of the accused in criminal offences are commonly as follows, which have been enumerated mainly in the Criminal Procedure Code, 1973.
 
1. An accused is assumed to be innocent until proven guilty, as provided in the Evidence Act.
 
2. An accused has a right to defend himself and present evidence during a trial, and the right to be acquitted when there are no grounds.
 
3. An accused has the right to representation and free legal aid, when he does not have adequate means to represent himself
 
4. The accused also has the right to know the grounds of his arrest
 
5. The accused has a right to be granted bail.
 
6. The accused has the right to have the copy of the police report and other relevant documents
 

7. The accused has the rights provided under article 20 of the Indian Constitution, which includes double jeopardy and self incrimination, along with right to life and personal liberty under article 21.

 

 
PREVENTION OF ATROCITIES ACT, 1989
 

This legislation does not allow the accused to have anticipatory bail, which dilutes the right of bail of the accused. This has been stated in section 18, which states that the provisions of section 438 of the CrPC(which concerns with anticipatory bail), cannot be invoked for offences committed under the current act, however, there have been cases, making this provision slightly more flexible.

 

 
Prathvi Raj Chouhan v. Union of India, (2020) 4 SCC 727
 

The High Court can grant anticipatory bail in the capacity of section 482 of the CrPC in exceptional cases to prevent misuse of provisions on settled parameters.

 

 
Mohandas C. v. Sub Inspector of Police, 2020 SCC OnLine Ker 4783
 

Anticipatory bail can be granted for offences under the Act only in the event of no prima facie case being made out. The Supreme Court has alerted the courts to be cautious while exercising such power.

 

 
PROTECTION OF CHILDREN FROM SEXUAL OFFENCES (POCSO) ACT, 2012
 

POCSO Act, carries reverse burden for certain offences, which means that the burden of proof lies on the accused to prove that he is not guilty of committing offences enlisted under sections 3,5,7,9 of the act, which are the offences of penetrative sexual assault, aggravated penetrative sexual assault, sexual assault and sexual harassment. This reverse burden has been stated in section 29 of the Act. Adding to this, section 30 of the Act states that for the offences in the act that required a person to have “culpable mental state”, the Courts will assume that the person has culpable mental state to commit the offence unless he doesn’t prove otherwise.

 

 
SPECIAL COURTS – POCSO VS PREVENTION OF ATROCITIES ACT, 2012
 

Both these Acts establish “Special Courts”, which have the power and authority of for the disposing cases which arise from their respective Acts, and follow the respective procedures entailed in the Acts.

 

 
However, when there are the same set of facts constitute a offence in both the legislations, which is the procedure that should override the other? Both Acts contain non-obstinate clauses, which state that the provisions of the said act will prevail, when there exists a contradiction with other legislations.

 

The Courts have answered this questions in various cases, where the conclusions lies that the POCSO Act jurisdiction prevails over the Prevention of Atrocities Act.

 

 

It was stated in the case of Union of India v. Ranjit Kumar, that when there is a case of conflict between any two laws, the law which came in force later is ordinarily given effect, and due to this reasoning, there must be a presumption in favour of the POCSO Act’s provisions in cases of conflict with the Atrocities Act. This preference has also been given in the case of Pramod Yadav v. The State of Madhya Pradesh.

 

 
WHY IS THE POCSO GIVEN A PREFERENCE OVER THE ATROCITIES ACT?
 

1. Section 28(2) of the POCSO Act, allows the Special Courts to try offences which the accused can be tried under offences other than the ones given in the POCSO Act, however, such power has not been given in the Preventions of Atrocities Act.

 

 

2. Another reason that can be given, the POCSO Act, provides for more detailed procedures and several additional safeguards for the special care of children, which are not present in the Atrocities Act. The purpose of both Atrocities Act an the POSCO Act are to protect vulnerable classes of society, which are more prone to being victims of crime. If in these cases, the Atrocities Act is given preference over the POCSO Act, it will be depriving the children of the SC/ST groups, from getting the additional safeguards that are provided to children, which defeats the very purpose of the act.

 

 
PLIGHT OF THE ACCUSED
 
In the POCSO Act, it is clear that the burden of proving innocence is on the accused, and adding to that, according to section 22 of the POCSO Act, if a child makes a false complaint, they will not be penalised for the same, regardless of the fact that the accused had to face the burden of proving himself innocent.

 
 
While for the Atrocities Act, anticipatory bail is not allowed in most cases. Right of bail is an intrinsic right of an accused provided in the Criminal Procedure Code, 1973, and this is taken away partially, when anticipatory bail is not granted. Adding to this the act has been used multiple times to threaten people, and has been heavily misused.
 

Defamation Decoded

Defamation Decoded

The constitution of India has given every person the right to freedom of speech and expression, it is a fundamental right and hence highly valued but the constitution with all its power also puts some restrictions on it. One has the right to protect his reputation but cant tarnish someone else’s at the same time. This injury to a person’s reputation is called defamation. It is defined under Sec 499 of Indian penal code as Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person.
 
Explanation 1
Anything imputed or published against a deceased person shall be derogatory to him and also shall hurt the feelings of his family or other near relatives will amount to defamation
 
Explanation 2
Anything imputed, published against a company or an association or collection of persons as such may amount to defamation.
 
Explanation 3
An imputation in the form of an expression, a remark or a hint typically a disparaging one. If one can prove that even though the statement published does not appear defamatory prima facie but by the circumstances and nature of its publication is derogatory then the offence of defamation may be said to have taken place.
 
Explanation 4
Anything imputed or published which directly or indirectly, lowers the moral or intellectual character of that person, or lowers the character of that person in respect of his caste or of his calling, or his credit, or causes it to be believed that the body of that person is in a loathsome state, or in a state generally considered as disgrace­ful amounts to defamation.
 
Any false and unprivileged statement published or spoken deliberately, intentionally, knowingly to damage someone’s reputation is defamation. It is pertinent to note that defamation is not just a wrong done by a person to another’s reputation by words, written or spoken, but can also be done in signs, or other visible representation.
 
To prove a defamation case, there are three most essentials. The foremost thing is that the statement spoken, written, or intended has caused injury or lowered the other person’s reputation. Secondly, it must prove that the statement thus spoken or published is directed towards the plaintiff. And thirdly, the statement must be published. It must be read by a third party, for, it is the opinion held by the person defamed by others that matters; insults directed to the plaintiff himself do not in themselves constitute defamation, the tort is not primarily concerned with the plaintiff’s wounded feelings.
 
There are two types of defamation under English law, libel, and slander.
Slander is the statement made through some spoken words or some transitory form, whether visible or audible such as gestures, hissing, or such other things. It appears to be a civil wrong but the words made may be blasphemous, seditious or obscene and this is a criminal offence under Section 499 of IPC.
 
Libel is a representation made in some permanent form, for example writing, printing, or statute. In Indian law there is no distinction made between libel and slander; both are treated as criminal offenses under section 499 of IPC. It is a criminal offence as well as a civil wrong.
 
An aggrieved person can avail both the remedies civil and criminal. The party in no way is compelled to choose between the two remedies. And hence there are two types of defamation, civil defamation, and criminal defamation. Let’s go through them in detail.
 
In a Civil Defamation case, monetary compensation can be claimed, provided the statements made are false and without the consent of the alleged defamed person. Mere vague or general statements will not amount to defamation; the injury to one’s reputation should be visible from a common man’s eye. It must be exposed to a third party, either orally or published. And if any statement harming the person’s reputation is made in it, it will constitute defamation even if it was sent as a private letter, since the requirement of a third person is essential to prove a defamation case.
 
Under a Criminal Case, the intention to defame is necessary. There must be malicious intent to put down another person without any reasonable doubt. Section 499 of the Indian penal code defines defamation and also states down its exceptions. While Sec 499 defines Defamation, Section 500 on the other hand provides for the punishment to a person committing the offense. Section 500 of the Code punishes defamation with simple imprisonment which may extend to two years, or fine or both. The Indian Penal Code also punishes printing or engraving matter known to be defamatory or sale of such printed or engraved substance containing defamatory matter about any person in the same manner of punishing defamation. Defamation is a bailable, non-cognizable, and compoundable offence, which means no police can register a case and start an investigation without the court’s permission. If a person is found guilty under sections 499 and 500 of IPC, he could be sent to jail for 2 years. The main difference between criminal and civil defamation is that an accused person can be sentenced to jail under the provisions of criminal defamation but in civil defamation provisions a person can only claim damages from the accused person.
 
Now that we’ve understood what exactly defamation is, let us get an insight into a landmark judgment regarding the same. In the case of Ram Jethmalani v/s Subramaniam Swamy, the defendant i.e Subramaniam Swamy passed a comment which stated that Mr. Jethmalani has been receiving money from the LTTE which is being deposited in his son’s account in Citibank, for such a grave allegation a suit was filed by Mr. Jethmalani, stating that the defendant was guilty of vicious and gross libel. Plaintiff claimed that he has a good reputation in India and also outside, and these types of statements damage the personal, political and professional reputation for which he claimed exemplary damages. Even though the defendant claimed that his statement was not with malicious intent, he could not prove the truthness of it. The Judge declared that this is prima facie defamatory. The statement was irrelevant to the situation, actual malice on part of the defendant was well established which harmed the image of the plaintiff at large and such allegations destroyed the personal and political reputation. Compensation of 5 lacs was awarded.
 
Defamation to one’s reputation can destroy his career, and hence defamation laws have commenced so that these cases can be legally dealt with and one does not misuse his right of freedom of speech and expression. In the case mentioned above, Mr. Ram Jethmalani is a very reputed person in India, he has served as the Law Minister and also the minister of Urban Development, statements made against him are of grave importance and are always to be taken seriously. Remarks made by Subramaniam Swamy were a dagger to his reputation because LTTE is a banned organization and had been declared a terrorist group by many countries. and being associated in any way with a terrorist organization leads to the loss of one’s reputation, even though it is proven false. Hence, Mr. Jethmalani deserved to be rightly compensated. A person takes years of effort and hard work to make a reputation in the society that he lives in, and it is rightly said that a name is built over time but can be very easily damaged and due to this a Court has a huge responsibility to judge the person fairly. The court must watch the thin line between the right to freedom of speech and one’s reputation at harm because to one, his reputation is everything.
 
In another case, Balraj Khanna & Ors. Vs. Moti Ram, the Respondent (Moti Ram) filed a complaint against the Appellant (Balraj Khanna) under section 500 of IPC alleging that appellants made certain defamatory comments regarding his character and working in the government office and that caused the suspension of the respondent. Respondent during December of 1964 was working as the liaison officer in Municipal Corporation in Delhi, appellants were members of the standing committee at that time. Appellants and respondents were not on good terms with each other and appellants many times tried to cause harm to the respondent on many issues. Appellant Balraj Khanna was having major control over the standing committee at that time so he used his influence on the committee against the respondent, calling the committee to pass a resolution for the suspension of the respondent. Meeting held on December 10th of 1964 in which many officers, as well as media personals, were called and appellants made serious allegations against the respondent in front of all those present and passed the resolution for suspension, which decrement the value of the character of the respondent in front of people who were present. The supreme court in agreement with the reasoning of the High Court on this aspect held that the High Court has made a correct approach when it held that the evidence implicates all the members of the Standing Committee, including the appellants in the charge of making the statements alleged to be defamatory. And the question of the application of the Exceptions to Section 499 I. P. C. does not arise at the pretrial stage, it will have to be gone into during the process of trial of the complaint. The appeal failed and was dismissed.
 
Certain exceptions have been provided under Section 499 of the IPC, they are as follows:
 
1. Truth for Public Good
If a statement published or made is true concerning any person and it is for the public good then it would not amount to defamation however derogatory it is.
 
2. Fair Criticism of Public Servants
Every citizen has a legal right to make true and fair statements on the public servants in the interest of the public.
 
3. Fair Comment on Public Conduct of Public Men Other Than Public Servants
A fair, honest and true criticism of servants of the public other than government employees will not amount to defamation rather succeed the test of fair comment.
 
4. Publication of Report of Proceedings of Courts of Justice 
As the Judicial proceedings are a matter of public interest, It is essential that reports of these proceedings are made with utmost honesty, free from malafide, dishonest and incorrect information. It must contain all information precisely how they occurred. This would also not amount to defamation.
 
5. Comment on Cases
It would not amount to defamation if an opinion respecting the merits of any civil or criminal case decided by the court is expressed in good faith. This exception provides Protection to case comments of the decisions that have been adjudicated upon
 
6. Merits of Public Performance/Literary Criticism 
The society must have the opportunity to freely criticise the performances or literary work that is submitted to its judgement. A fair and honest opinion respecting the merits of any performance which the author himself has submitted will not amount to defamation.
 
Ingredients that need to be fulfilled for this exception:
a. An invitation from the author to express your opinions on his work is necessary.
b. The criticisms must be pertinent to the standard of the performance and not on the basis of capability to do the same or not.
c. The statement must be made in good faith.
 
7. Censure by One in Authority
It is not defamation if a person having authority over another, either conferred by law or arising out of a lawful contract, to pass in good faith any censure. Illustration A Judge censuring in good faith the conduct of a witness, a parent censuring in good faith a child in the presence of other children.
 
Ingredients that need to be fulfilled for this exception:
a. The person making the statement must be in a position of authority over whom the statement is made.
b. The statement needs to be made in good faith.
 
8. Complaint to Authority
It would not amount to defamation if a complaint in good faith is made to a person who is in authority to punish the other.
 
Ingredients that need to be fulfilled for this exception:
a. The statement must be made to a person in authority
b. The statement must be made in good faith.
 
9. Imputation for Protection of Interests
This exception is similar to the first exception which deals with the public good. The Supreme Court in the case of Harbhajan Singh v State of Punjab held that this exception has to be applied by keeping in mind the facts and circumstances of each case which includes, the alleged malice, due care and attention where defamation is alleged. It is not enough on the part of the accused that he believed the statement to be true. Under this exception, even if good faith has to be established, the imputation must be made for the protection of interest of the person making it.
 
10. Caution in Good Faith
Under this exception, it is necessary to prove that the imputations were a result of ‘good faith’ and were meant for ‘public good’. One is not supposed to prove the same beyond reasonable doubt and the mere probability that he did not commit the offence is sufficient.

Why do District Court Judgements never get reported Online?

Why do District Court Judgements never get reported Online?

In India, transparency has been upheld as crucial for a smooth functioning of the Government Machinery. Keeping this in mind, it was in the year 2005 Right to Information Act came into force that empowered the citizens, promoted transparency and accountability in the working of the Government, aimed to contain corruption, and make the democracy work for the people in a real sense. But when the topic comes to transparency in the workings of the judiciary, the talks go mum.
 
As far as Indian Judiciary goes only the Supreme Court and High Court judgements are reported. The District Court or Trial Court Judgements can be availed only the party to the case that too only through their Advocates. This one particular fact put forth a question that what might be the reason behind such analogy. The question was partially answered by the Hon’ble Supreme Court in 2020 through the judgement of Chief Information Commissioner Officer v. High Court of Gujarat and Others wherein the issue discussed was whether the copies of a particular case in a District Court of Gujarat be done by filing an RTI. It was held that
 
“when there is an effective machinery for having access to the information or obtaining certified copies which, in our view, is a very simple procedure i.e. filing of an application/affidavit with requisite court fee and stating the reasons for which the certified copies are required, we do not find any justification for invoking Section 11 of the RTI Act and adopt a cumbersome procedure. This would involve wastage of both time and fiscal resources which the preamble of the RTI Act itself intends to avoid.”
 
 
Through this judgement it was very clearly opined that there is no need for the Lower Court judgements to be available to public at large, without a proper intervention and process that mandates the involvement of the Court Staff.
 
A ray of light in this scenario can be the upcoming project of e-filings as started on 31.07.2020 that aims to reduce the dependency of courts on papers and promote the e-filing of not only the cases but also the related replies, affidavits, application and documents as submitted during the course of a case. The process has just begun and only being practiced in selective District Court of States like Delhi, Chhattisgarh. The e-filing portal not only allows the advocate to register themselves but also allows a common man to do the same. Once the registration is reviewed by the admin of the selected High Court/Court Establishment. With a proper set up of the e-filing being done, one can expect the judgements to get uploaded in the database of the District Courts. With just one step of making the database get accessed to all, like the Supreme Court on every District Court’s official website, every person will be able to read the judgements as being passed by any Court in India.
 
This task has been achieved in foreign nations too, like America follows the system of PACER- Public Access to Court Electronic Records. PACER provides the public of America, with instantaneous access to more than 1 billion documents filed at all federal courts. As far as costing goes, access to case information costs $0.10 per page.
 
In New Zealand the judgements of the District Court are also available with a simple research in its database. But to ensure the protection of the privacy of the parties in some specific cases, the real names of the parties are replaced with pseudonyms. This is a very unique approach towards ensuring transparency and privacy at the same time.
 
The reason behind asking for the judgements of the District Courts to be reported online is to help the general public get an easy access to the judiciary and to help the law students understand the process of a case. District Courts are the busiest courts of all because they are the first door to knock when seeking justice. For the general public, to know their case status only two ways are available, first approach the advocate and know the status of case proceedings or try and use the E-Court app themselves. For a novice E-court can get tricky as it requires some crucial details like the court complex and case number to find a case and then even after finding it, the only information available is the stage at which the case is. One cannot access the documents and drafts as submitted by both the parties. Secondly for the law students who are studying, trial courts are the practice areas from where they will be able to understand the actual procedure of civil and criminal cases, application of laws to facts and get an idea about the judicial proceedings. Had the judgements of the District Courts become available online, even this task would have been solved as the students would simply choose a case and follow its proceedings, thereby understanding the process, laws and their application all at the same time.