tag:blogger.com,1999:blog-49094078756329810482023-06-20T21:32:06.871-07:00Perspectives on LawPreeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-4909407875632981048.post-60519851243179222362017-08-11T10:01:00.000-07:002017-08-12T10:02:49.281-07:00Should India have an Appeal on Points of Law from an Arbitral Award?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">International
instruments on arbitration are typically designed to minimize the role of the
judiciary. The UNCITRAL Model Law relegates national courts to a role merely ‘supportive’
in character and ‘corrective’ within the confines of Article 34. The Indian
Arbitration and Conciliation Act, 1996 (“the Indian Act”) incorporates the Model
Law and in particular, replicates Article 34 even for domestic arbitrations
unlike some other common law countries. However, the Indian judiciary has
arrogated to itself a far wider jurisdiction to review arbitral awards than was
intended by Parliament.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn1" name="_ftnref1" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[1]</span></span><!--[endif]--></span></a>
The Indian position today is that, an award can be challenged if it is patently
against a ‘settled position of law,’ but
not if an alternative view of law is possible.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn2" name="_ftnref2" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[2]</span></span><!--[endif]--></span></a>
This position is not harmonious with the spirit of the Model Law, neither is it
in keeping with common law jurisdictions like England, Canada, or Singapore.
Unlike the Model Law, these jurisdictions do allow judicial supervision through
appeal on points of law in domestic arbitrations.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn3" name="_ftnref3" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[3]</span></span><!--[endif]--></span></a> In my opinion, presently, India ought to lean
more towards the common law approach than towards the strict hands-off policy
of the Model Law. I firmly believe that India requires a specific provision for
appeals to courts on points of law arising out of an arbitral award.<i><o:p></o:p></i></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">A
characteristic feature of the Indian legal system, like any other common law
system, is that judicial decisions are a source of law and are considered
binding. Judicial precedent has played an important role in the development of commercial
law in India, through clarifying codified law and developing uncodified common
law. With parties increasingly resorting to settlement of disputes through arbitration
and judicial scrutiny of awards precluded, how will the commercial law in India
develop? The single-minded focus on limiting judicial supervision in India has
not given adequate weight to the role of courts in developing commercial law. <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">This is
not to say that such an appellate provision has been immune to criticism.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn4" name="_ftnref4" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[4]</span></span><!--[endif]--></span></a>
Notably, in the context of the English Arbitration Act it has even been said
that “<i>matter of appeals on questions of
law should be confined to the dustbin of history</i>.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn5" name="_ftnref5" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[5]</span></span><!--[endif]--></span></a>
I respectfully disagree with such extreme views. </span><span style="font-family: "garamond" , serif; font-size: 12pt;">The principal
argument against introducing appellate supervision of courts over arbitral
awards is that of ‘party autonomy’. Undoubtedly, the objectives with which
parties choose arbitration are finality; saving costs and timely resolution of
disputes. It has been argued therefore, that when parties agree to arbitrate,
they accept the limitations of the process (for better or for worse)</span><a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn6" name="_ftnref6" style="font-family: Garamond, serif; font-size: 12pt;" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[6]</span></span></span></a><span style="font-family: "garamond" , serif; font-size: 12pt;">
and thereby trade the expanded judicial review in court proceedings for the
perceived simplicity, informality and expedition of arbitration.</span><span class="MsoFootnoteReference" style="font-family: "garamond" , serif; font-size: 12pt;"><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn7" name="_ftnref7" style="font-family: Garamond, serif; font-size: 12pt;" title="">[7]</a></span></span></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">This
argument may not be fully accurate in an Indian context. Parties choose
arbitration as a default mode for dispute resolution because trials in India
take a significantly long time to conclude<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn8" name="_ftnref8" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[8]</span></span><!--[endif]--></span></a>
and not necessarily because they want to exclude judicial review. Furthermore, are
parties really willing to assume the risk of an unfavorable outcome where the
position of law is unclear? The reality is that, when parties are faced with
such a situation, they resort to backdoor options such as challenging the award
on grounds of ‘public policy’ violation. <a href="https://indiankanoon.org/doc/919241/" target="_blank">ONGCv. Saw Pipes </a>was a classic example, which led to expansion in the scope of ‘public
policy’ to include ‘patent illegality’.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn9" name="_ftnref9" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[9]</span></span><!--[endif]--></span></a>
Recently, in the Madras High Court, a party successfully challenged the award
on this ground on the basis that the tribunal precluded pre-contract
negotiations in aid of interpretation of the contract.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn10" name="_ftnref10" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[10]</span></span><!--[endif]--></span></a> A complete preclusion of appeal on point of
law is bound to encourage parties to construe open-ended grounds more widely,
the consequences of which are obviously more damaging. In my view, therefore, party
autonomy itself favours a right to appeal on a point of law provided of course,
that, parties are free to exclude it. <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">Secondly,
development of law is not isolated from or inconsistent with the interest of
the parties. Judicial precedent promotes certainty and consistency. At the same
time, it allows a set of rules to adapt to the needs of a changing society. Businessmen arrange their affairs on the basis
of a reasonable degree of predictability in legal thinking.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn11" name="_ftnref11" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[11]</span></span><!--[endif]--></span></a> Parties conduct themselves under a contract
based on their understanding of the law, which often stems from the judicial
precedent on similar contractual relationships. Where arbitrations have become
a default mode of dispute resolution, absence of an avenue for determination of
the law by a court, for situations not previously addressed by codified law,
cannot possibly be conducive to commerce. For example, most infrastructure
contracts in India are with the government or government-owned entities in
standard form providing for dispute resolution by arbitration. The absence of
precedent in disputes arising from such contracts most certainly affects the
entire industry. In contrast, the shipping industry in England for example has
benefited deeply from point of law appeals.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn12" name="_ftnref12" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[12]</span></span><!--[endif]--></span></a> <o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">Thirdly,
the aversion to judicial scrutiny stems from fear of parties resorting to
dilatory tactics. This however, is a complaint against the abuse of law and not
the law itself. There is also the fear of judicial indiscipline resulting in
re-opening of arbitrations on insignificant differences in interpretations. These
concerns in my view can be allayed by clearly defining the contours within
which an appeal on a point of law shall lie.<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn13" name="_ftnref13" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">[13]</span></span><!--[endif]--></span></a>
Besides, the current pro-arbitration trend in the Indian judiciary gives hope
that courts will use such appellate power scrupulously.<span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn14" title="">[14]</a></span></span><a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftn14" title=""><!--[endif]--></a></span>
<o:p></o:p></span></div>
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<span lang="EN-US" style="font-family: "garamond" , serif; font-size: 12.0pt; line-height: 115%;">The State’s
interest in development of law and party autonomy are not necessarily
antithetical. I believe that providing a non-mandatory provision for appeal on
points of law through appropriate legislation would, in the Indian context,
achieve the correct balance and harmonize the two. <o:p></o:p></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref1" name="_ftn1" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[1]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See <i><a href="https://indiankanoon.org/doc/110552/" target="_blank">Bhatia International v. Bulk Trading S.A. andanother</a>,</i> </span><span lang="EN-US"><span style="font-family: "garamond" , serif;">(2002) 4 SCC 105</span>;</span><span lang="EN-US" style="font-family: "garamond" , serif;"> <i><a href="https://indiankanoon.org/doc/867675/" target="_blank">Venture Global Engineering v.Satyam Computer Services Limited and Another, </a></i></span><span lang="EN-US"><i><span style="font-family: "garamond" , serif; mso-bidi-font-weight: bold;"> </span></i><span style="font-family: "garamond" , serif; mso-bidi-font-weight: bold;">(2008) 4 SCC 190</span></span><span lang="EN-IN" style="font-family: "garamond" , serif; mso-ansi-language: EN-IN; mso-bidi-font-weight: bold;">; See also </span><i><span lang="EN-US" style="font-family: "garamond" , serif; mso-bidi-font-weight: bold;">Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd.,</span></i><span lang="EN-US" style="font-family: "garamond" , serif; mso-bidi-font-weight: bold;"> </span><span lang="EN-US"><span style="font-family: "garamond" , serif; mso-bidi-font-weight: bold;">(2003) 5 SCC 705.
</span></span><span lang="EN-US" style="font-family: "garamond" , serif;"><o:p></o:p></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref2" name="_ftn2" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[2]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See <i><a href="https://indiankanoon.org/doc/908591/" target="_blank">Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd</a>.</i> (2007) 8 SCC
466; <i><a href="https://indiankanoon.org/doc/1738256/" target="_blank">Kwaility Manufacturing Corporation v. Central Warehousing Corporation,</a> </i>(2009) 5 SCC 142<i>; Oil and Natural Gas Corporation Limited v. Astra Construction Private
Limited, </i>2013 (2) GauLR 464.<o:p></o:p></span></div>
</div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref3" name="_ftn3" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[3]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> For example, Section 69 of the
English Arbitration Act, 1996 or Section 49 of the Singapore Arbitration Act,
2001 or Section 31 of the British Columbia Arbitration Act, 1996 (Canada).<o:p></o:p></span></div>
</div>
<div id="ftn4">
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref4" name="_ftn4" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[4]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See Saville L.J. <i>The Arbitration Act 1996 and its Effect on
International Arbitration in England</i> (1997) 63 Arbitration<i> </i>104 at 108.<o:p></o:p></span></div>
</div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref5" name="_ftn5" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[5]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> Michael J. Needham, <i>Appeal on Point of Law arising out of an
Award</i>, (1999) Arbitration 65(3),
205-211.<o:p></o:p></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref6" name="_ftn6" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[6]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> <i>Pioneer Shipping Ltd v. BTP
Tioxide Ltd (The Nema),</i>
[1982] AC 724; <i>Hayes Forest Services
Limited v. Weyerhaeuser Company Limited,</i></span><span lang="EN-US" style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 115%;"> </span><span lang="EN-US" style="font-family: "garamond" , serif; mso-bidi-font-style: italic; mso-bidi-font-weight: bold;">2008 BCCA 31.</span><span lang="EN-US" style="font-family: "garamond" , serif;"><o:p></o:p></span></div>
</div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref7" name="_ftn7" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[7]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See Stephen L. Hayford, <i>Law in Disarray: Judicial Standards for
Vacatur of Commercial Arbitration Awards,</i> 30 Ga.L.Rev. 731, at 747-48
(1996).<o:p></o:p></span></div>
</div>
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<div class="MsoFootnoteText" style="line-height: 115%; text-align: justify;">
<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref8" name="_ftn8" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[8]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> <a href="http://lawcommissionofindia.nic.in/reports/report246.pdf" target="_blank">Law Commission of India,Report No.246, Amendments to Arbitration and Conciliation Act, 1996</a> (August
2014).<o:p></o:p></span></div>
</div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref9" name="_ftn9" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[9]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See Supra n. 1; See also, <i><a href="https://indiankanoon.org/doc/91703841/" target="_blank">SteelAuthority of India Limited (Sail) v. Dampskibaselsbaket Norden</a>, </i>2014 (211) DLT 324; <i><a href="https://indiankanoon.org/doc/119428738/" target="_blank">R.M. Cylinders Private Limited, Hyderabad v. Hindustan Petroleum CorporationLimited, Mumbai</a>,</i> 2013 (4)
Bom.C.R. 71. <o:p></o:p></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref10" name="_ftn10" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[10]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> <a href="https://indiankanoon.org/doc/17449875/" target="_blank">Board of Trustees of Chennai Port Trust, Chennai v. Chennai ContainerTerminal Private Limited, Mumbai and others, (</a>2) MLJ 132.<i><o:p></o:p></i></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref11" name="_ftn11" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[11]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> R.M Goode, <i>Commercial Law in the Next Millenium,</i>
The Hamlyn Lectures (London: Sweet & Maxwell, 1998).<o:p></o:p></span></div>
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<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref12" name="_ftn12" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[12]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See Robert Finch, <i>London: still the cornerstone of
international commercial arbitration and commercial law?,</i> (2004) Arbitration
70(4), 256-266<i>; </i>See also<i> Isabella Shipping v. Shagang Shipping (The
Aquafaith) </i>[2012] EWHC 1077 (Comm<i>)</i>.
See also <i>Transfield v. Mercator (The
Achilleas) </i>[2008] UKHL 48<i>.</i><o:p></o:p></span></div>
</div>
<div id="ftn13">
<div class="MsoFootnoteText" style="line-height: 115%; text-align: justify;">
<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref13" name="_ftn13" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[13]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> For example, Section 69 of the
English Arbitration Act, 1996 or Section 49 of the Singapore Arbitration Act, 2001
or Section 31 of the British Columbia Arbitration Act, 1996 (Canada).<o:p></o:p></span></div>
</div>
<div id="ftn14">
<div class="MsoFootnoteText" style="line-height: 115%; text-align: justify;">
<a href="file:///C:/Users/Preeti%20Sukthanker/Dropbox/personal/Harvard%20Personal%20Statement%2015112014.docx#_ftnref14" name="_ftn14" title=""><span class="MsoFootnoteReference"><span lang="EN-US" style="font-family: "garamond" , serif;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size: 10pt; line-height: 115%;">[14]</span></span><!--[endif]--></span></span></a><span lang="EN-US" style="font-family: "garamond" , serif;"> See <i>B<a href="https://indiankanoon.org/doc/173015163/" target="_blank">harat Aluminum Co. v. Kaiser Aluminium Technical Services</a>, Inc.</i>,
(2012) 9 SCC 552; See also, <i><a href="http://judis.nic.in/supremecourt/imgs1.aspx?filename=40512" target="_blank">Shri Lal Mahal Ltd. v. Progetto Grano Spa, </a></i>2013
(4) CTC 636. <i><o:p></o:p></i></span></div>
</div>
</div>
</div>
Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-44515338937188751412011-05-23T23:22:00.000-07:002011-05-23T23:22:47.611-07:00Vdafone: Assessee's case<div dir="ltr" style="text-align: left;" trbidi="on"><div style="text-align: justify;"></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In this post I consider the assessee’s arguments (on chargeability) in Vodafone; and in the next post, I will consider the Department’s view accepted by the High Court. </span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">1 The company law point:</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">It is a well established principle in the law of property that one cannot pass a better title than one possesses. Further, ever since the decision in Salomon v. Salomon, it is well accepted that a company is a legal person and has an existence independent of its shareholders. A shareholder has no interest in the property of the company. In Guzdar v. CIT, the Supreme Court of India has held that there is nothing in Indian law that provides any basis whatsoever for the assumption that a shareholder who holds shares, holds any interest in the property of the company. Also, a person holding by himself or through nominees all the shares of a company cannot be regarded as having become owner of the company’s business or assets.</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In the Vodafone case, the Department essentially tried to lift the veil over the intermediary foreign company, therefore holding that the transfer of the shares of that intermediary company in fact amounted to the transfer of a capital asset situated in India. Indian law recognizes that the doctrine of lifting the corporate veil is only an exception to the principle of separate legal personality, it is not the rule. None of the requirements for this exception to come onto operation were fulfilled in the facts of Vodafone. In fact, a similar situation had already been considered by the Delhi High Court in Carrasco Investments v. Special Director, Enforcement Directorate. In that case, the Court refused to categorize the sale of the shares of a parent company outside India as a sale of shares of the subsidiary company within India. Arguments to lift the corporate veil must all fail in similar fact situations.</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">First, simply because a set of companies function as a group, it cannot be said that the corporate veil between them is to be lifted (Adams v. Cape Industries). The fact that a parent holds 100% of the shares of the subsidiary is no ground for lifting the corporate veil between the parent and the subsidiary. This is particularly important in cases where non-residents have Indian subsidiaries – the legal form of the separate existence of the two cannot just be wished away. </span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">2 The substance-over-form point:</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">One can now turn to the issues surrounding motive to avoid tax. The question of motive is the one which goes to the heart of the substance-over-form debate. Where exactly is the line to be drawn between tax avoidance and planning and tax evasion? The Supreme Court has categorically held that the fact that an otherwise legal action is taken because of a tax-saving motive, is in itself not sufficient to lift the corporate veil and ignore the intermediate entity said to have been created for a tax-saving purpose. A corporation otherwise qualified should not be disregarded as a façade merely because it was purposely created and operated to gain tax benefits.</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">In CIT v. Raman & Co., the Supreme Court stated that avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited. Thus, the form in which a transaction is entered into cannot be ignored. The decision in McDowell v. CTO does not change this legal position; particularly given the interpretation placed on McDowell by the Supreme Court in Azadi Bachao Andolan. The fact that a particular course adopted by an assessee is a device to avoid tax is irrelevant. The fact that motive for a transaction is to avoid tax is not sufficient to invalidate a transaction unless a particular enactment so provides. Unless that device is itself illegal, it cannot be disregarded. The decision of the Supreme Court in McDowell cannot be interpreted as meaning that every attempt at tax planning is illegitimate. This has been made explicitly clear by the in Azadi Bachao Andolan v. Union of India, while clarifying the decision of the Constitution Bench in McDowell v. CTO, it was held, “The highest authorities have always recognised that the subject is entitled so to arrange his affairs as not to attract taxes imposed… In doing so, he neither comes under liability nor incurs blame.” Once a transaction has been entered into by the parties, it is not open to the revenue authorities to rewrite the agreement under the guise of looking at the substance thereof. Particularly in the context of capital gains tax, capital gains is based on legal concepts of property and contract and is, in essence, a matter of legal form rather than economic substance. Thus, conceptually, applying “substance over form” doctrines such that the form is altogether ignored is inconsistent with the nature of tax on capital gains. </span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">It is the true legal relation arising from the transaction alone that determines the taxability of a receipt arising from a transaction. The doctrine of looking at the substance and not the form of the transaction applies when there is a colourable or illegal transaction which has to be ignored. In the instant case, the transaction in question was perfectly legal. When the transaction itself is plain and admits of no ambiguity, there is no case for looking at the substance of the form ignoring the transaction. The Bombay High Court itself in an earlier case had stated that to look at the substance while completely ignoring the form is to substitute the “uncertain and crooked cord of discretion” for the “golden and straight mete wand of the law.” (Provident Fund Investment Co. v. CIT) </span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">Due to these reasons, the form of the transaction – that the transaction was of the shares of a company, by a company, and to a company; all outside India – cannot be ignored. Therefore, in Vodafone, it was not open to the Department to contend that the substance of the transaction involved the transfer of a capital asset situated in India, while ignoring that the transfer was in legal form merely of the shares of a foreign company. </span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;">(The Department’s arguments and the Bombay High Court’s discussion of this issue will be seen in the next post)</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><br />
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</span></div><div style="text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"></span></div></div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4909407875632981048.post-21536394105614243382010-07-16T07:42:00.000-07:002010-07-16T07:42:47.332-07:00Vodafone Controversy: An Introduction<div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">One of the most controversial areas in taxation under the Indian Income Tax Act, 1961 (“the Act”) in recent days has been the Vodafone tax controversy. Several important questions of law in the area of taxation of non-residents – pertaining to both chargeability and machinery provisions – are at issue in the Vodafone controversy. The Bombay High Court in its recent judgment in <i>Vodafone</i>has commented on the merits of some of these issues (please see <span>Vodafone International</span><span>Holdings BV</span><span> v. </span><span>Union</span><span> of </span><span>India</span><span>, WP No. 2550 of 2007 (Bombay High Court)</span>. The case provides a useful backdrop for anchoring the theoretical arguments on the taxation of non-residents. For a detailed discussion of the theoretical arguments, reference may be made to <span>Geoffrey Loomer, ‘The Vodafone Essar Dispute’ (2009) 21 (1) </span><span>National</span><span> </span><span>Law</span><span> </span><span>School</span><span> of India Review 89.</span> In the following couple of posts, I will look at the various arguments on both sides of the debate. In this introductory post, I will only briefly outline the factual position.</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">A non-resident company, Hutchinson International, held 67% shares in an Indian company named Hutchinson-Essar. This Indian company was a joint venture between Hutchinson International and Essar. The 67% shareholding in the Indian company was not a direct shareholding. Hutchinson held 100% shares of a foreign company, which in turn held 67% shares in the Indian company. Hutchinson transferred this shareholding of the foreign company to Vodafone. Thus, indirectly, the interest in the 67% shareholding was also transferred to Vodafone. The question which arose was, whether the income accruing to Hutchinson as a result of the transaction could be deemed to accrue or arise in India by virtue of section 9 of the Act. Under Section 9, income received through the transfer of a capital asset ‘situate in India’ is taxable in India. The shares of a Mauritius company are situate in the Mauritius, not in India. Hence, the Revenue’s argument is that the transaction is not a sale of shares <i>simpliciter</i>, but is (in substance) the sale of a capital asset situate in India. The two main justifications advanced by the Revenue are based on lifting of the corporate veil over the Mauritius company on principles of corporate law; and over the application of general substance-over-form doctrines used in taxation.</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">On the face of it, the transaction was simply for the sale of shares in a foreign company. The Indian Income Tax Department issued a show cause notice to Vodafone asking it to show cause as to why action should not be taken against it for failing to deduct tax at source under Section 195 of the Act while making payment of the consideration to Hutch. This show cause notice was challenged by Vodafone in a writ petition before the Bombay High Court under Article 226 of the Constitution of India. The issues which arose were, inter alia:</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">(a) Whether the transfer of the shares of a foreign company by a non-resident to a non-resident results in income being deemed to accrue or arise in India under Section 9 by virtue of the fact that the foreign company in turn held shares in an Indian company effectively resulting in controlling interest in an Indian company being transferred?</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">(b) Whether, assuming that the income could be said to have deemed to accrue or arise in India, there was any liability on Vodafone – the buyer/payer – to deduct tax at source? In other words, does Section 195 have an extra-territorial application so as to cast an obligation on Vodafone to deduct tax at source?</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">The Bombay High Court held in a detailed judgment (per Radhakrishnan and Nirgude JJ.) that the writ petition challenging the show cause notice was premature, as the petitioner had an effective alternate remedy available; and that prior to the facts being established, the High Court could not conclusively determine the issue. Nonetheless, the Court went on to make observations on the merits based on the facts available on the record. It answered all the issues against Vodafone.</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">The decision was sought to be appealed by way of special leave before the Supreme Court of India. Interestingly, although Vodafone’s appeal was not admitted by the Court, the observations in the order dismissing the Special Leave Petition brought some relief to Vodafone (see <span>Vodafone International </span><span>Holdings BV</span><span> v. Union of India, SLP (Civil) No. 464/2009 (Supreme Court of India)</span>. The Court held (per Sinha and Sharma JJ.) relying on a previous decision, that ordinarily in Income Tax jurisprudence, it is not open to the High Court to venture into questions of fact. Further the agreement between Vodafone and Hutchinson was not before the High Court. Therefore, it was ordered by the Supreme Court that the question in relation to the “jurisdictional issue” must be re-agitated before the Assessing Officer, and can be challenged before the High Court. The question of law was, to that extent, kept open. Thus, the Supreme Court seems to have clarified that the High Court’s decision should not be read as deciding on the merits of the case, but must be confined to the issue of maintainability. In these circumstances, the controversy provides a good opportunity to examine the law relating to the taxation of non-residents.</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">The jurisdictional authority to whom the matter was remanded decided the case against Vodafone, and Vodafone has challenged this decision – in terms of the Supreme Court order – before the High Court. Thus, the ball is once again in the court of the Bombay High Court; and the matter is scheduled for hearing on 2<sup>nd</sup> August.</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;"><br />
</div><div class="MsoNormal" style="border-collapse: collapse; font-family: arial, sans-serif; font-size: 13px; line-height: 19px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: justify;">In the next post, I will describe the Department’s arguments in the matter; and subsequently, will turn to Vodafone’s possible arguments.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-33319270574025485082010-06-03T07:00:00.000-07:002010-06-03T07:05:31.925-07:00All India Bar ExamsThe Bar Council of India has announced that an all India Bar exam will be conducted from now onwards for law graduates who intend to practice in courts and this includes graduates of 2009-2010. The examination will have 100 multiple choice questions from the syllabus prescribed for 3 and 5 year LLB courses and the duration of the exam will be 3 hours 30 minutes. The Bar Council will provide necessary reading material to the applicants and the applicants are allowed to refer to books, notes etc. during the examination.The first exam is going to be conducted on 5th December 2010. The results of this examination will be released on 31st December 2010. The results will only announce if the advocate has passed or failed i.e. it will only inform the person whether he/she is eligible to practice in courts or not and marks or ranks will not be disclosed. <br />
<br />
Details of the examination, application procudure and schedule (relevant dates) for the graduates of 2009-2010 is available at the <a href="http://www.barcouncilofindia.org/about/first-all-india-bar-examination/details-of-the-all-india-bar-examination/">Bar Council Website</a>.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-37199267433589335462010-05-24T09:07:00.000-07:002017-08-11T20:42:27.806-07:00NOMINEE v/s LEGAL HEIRS contd..<div dir="ltr" style="text-align: left;" trbidi="on">
In my earlier <a href="http://perspectivesonlaw.blogspot.com/2010/05/nominee-vs-legal-heirs.html">post</a> I discussed the recent judgment of the Bombay High Court, <em>Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Limited & Others </em>that gave an elevated status to a nominee u/s. 109A Companies Act. <br />
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I will now examine provisions in respect of nomination found in laws, such as Insurance, Banking, Co-operative Societies, etc. Though the provisions in respect of nomination, in each statute may be worded differently, the legal position of a nominee has always been accepted to be that of a trustee and nomination is not considered to be a kind of testamentary succession. <br />
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Since the function of a nominee in respect of a certain property, springs into operation on the death of the person nominating, enormous disputes have arisen between the legal heirs of the deceased on one hand and the nominee on the other, in respect of such property. <br />
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Let us see the provisions in respect of nomination in areas other than Company Law. <br />
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INSURANCE:<br />
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The first of these disputes arose in respect of the nomination provision under section 39 of the Insurance Act. The question was settled by the Supreme Court in the case of <em>Sarbati Devi v. Usha Devi</em>. However, prior to this decision, divergent views had been expressed by various High Courts, in respect of the position of a nominee. For example the Allahabad High Court in <em><a href="http://indiankanoon.org/doc/1285014/">Kesari Devi v. Dharma Devi</a></em>, did not accept the view that that the policy money that is paid to a nominee under Section 39(6) of the Insurance Act is held by him as a trustee for the legal representative of the assured. This view was also ascribed by the Tamil Nadu High Court in <em>Karuppa Gounder v. Palaniammal.</em> Similarly, the Delhi High Court in <em>S. Fauja Singh v. Kuldip Singh </em>and <em><a href="http://indiankanoon.org/doc/153442/">Uma Sehgal v. Dwarkadas Sehgal</a></em> held that, <strong><em>“the nominee takes the money by way of statutory testamentary disposition. He is not a trustee for or an agent of the heirs or successors of the assured…”</em></strong><br />
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On the other hand, a full bench of the Kerala High Court, in <em><a href="http://indiankanoon.org/doc/768795/">Sarojini Amma v. Neelakanta Pillai</a></em>, a division bench of Tamnil Nadu High Court in <em><a href="http://www.indiankanoon.org/doc/1211259/">D. Mohanvelu Mudaliar v. Indian Insurance and Banking Corporation Ltd., Salem</a></em>, Calcutta High Court in <em>Ramballav Dhandania v.Gangadhar Nathmall</em>, and Gujarath High Court in <em>Atmaram Mohanlal Panchal v. Gunavantiben</em> took a contrary view and held that a nominee is merely a receiver of the policy amount and does not get any title to the policy amount. <br />
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In <em>Sarbati Devi v. Usha Devi,</em> the Apex court held that a nominee cannot receive the policy amount to the exclusion of other legal heirs primarily because:<br />
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1) Nothing in Section 39 indicates that it will operate as a third kind of succession and<br />
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2) The section provides that “the money shall be payable to the nominee” and not that it shall belong to the nominee. <br />
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COOPERATIVE SOCIETIES:<br />
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Post <em>Sarbati Devi</em>, when any dispute arose between a nominee and legal heirs of the nominating deceased under any legislation, the Courts have relied on the ruling in <em>Sarbati Devi</em> and given their decision in favour of legal heirs. For Example:<br />
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IN <em>Ramdas Shivram Sattur v. Rameshchandra @ Ram Chandra Popatlal Shah and Or</em>, 2009(3) BomCR 705, the Bombay High Court while interpreting section 30 of the Maharashtra Co-operative Societies Act which provides - “On the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules or, if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member.” [Section 30(1)] … “All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.” [Section 30(4)], held that, <strong><em>“Purpose of nomination is to make certain the person with whom the society has to deal and not to create interest in the nominee to the exclusion of those who in law are entitled to the estate of a deceased member.”</em></strong><br />
<br />
BANKING :<br />
<br />
a) Banking Regulation Act, 1949<br />
<br />
In <em><a href="http://indiankanoon.org/doc/951629/">Arnab Kumar Sarkar v. Smt. Reba Mukherjee and Ors</a>.</em>, AIR 2007 Cal 79, the Calcutta High Court held, <strong><em>“just as section 39 of the Insurance Act, 1938, the purpose of Section 45Z of the Banking Regulation Act, 1949 is to provide for the discharge of the Bank’s obligation.”</em></strong><br />
<br />
Similarly, see <em><strong>Divya Vasant Desai v. State Bank of India,</strong></em> (2009) 1GLR 495 on nomination under section 45ZA of Banking Regulations Act. <br />
<br />
b) The Government Savings Banks Act, 1783<br />
<br />
Section 4 of the said Act provides for nomination by a depositor in respect of his deposits and Section 5 provides: <br />
<br />
“<strong>Payment to be a discharge</strong> - Any payment made in accordance with the foregoing provisions of this Act shall be a full discharge from all further liability in respect of the money so paid:<br />
<br />
<strong>Saving of right of executor</strong>.- But nothing herein contained precludes any executor or administrator, or other representative of the deceased, from recovering from the person receiving the same the amount remaining in his hands after deducting the amount of all debts or other demands lawfully paid or discharged by him in due course of administration…”<br />
<br />
Thus, it may be seen that the language used in each statute varies and the consequences intended wherefrom will also accordingly vary. However, most of these statutes indicate clearly that the purpose of nomination is to provide a valid discharge to the co-operative society or bank or as the case may be and that it does not preclude the legal heirs of the deceased from asserting their claim in the property. <br />
<br />
The provisions u/s, 109A of the Companies Act certainly differ from the provisions aforementioned and the decision of the Bombay High Court in recognizing the same is laudable.</div>
Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com1tag:blogger.com,1999:blog-4909407875632981048.post-38246643115186021172010-05-11T01:56:00.000-07:002017-08-11T20:42:54.959-07:00NOMINEE v/s LEGAL HEIRS<div dir="ltr" style="text-align: left;" trbidi="on">
The Hon'ble Bombay High Court in its very recent decision, <em><a href="http://www.nishithdesai.com/New_Hotline/CorpSec/Harsha%20Nitin%20Kokate%20Vs.%20The%20Saraswat%20Co-op.%20Bank%20Limited%20&%20Others.pdf">Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Limited & Others</a></em>, held that position of a nominee under section 109A of the Companies Act is not merely that of a trustee for the estate of the deceased, and it further held that, " <strong><em>on the death of the share holder, the nominee would become entitled to all rights in the shares to the exclusion of all other persons</em></strong>." This means that, the nominee will be made the beneficial owner thereof and all the rights incidental to ownership of shares would follow i.e. the right to transfer, pledge or hold the shares.<br />
<br />
The court based its decision on the express provisions of the section which provide as follows:<br />
<br />
<strong>S. 109A. Nomination of shares</strong> – (1) Every holder of shares in, or holder of debentures of a company may, at any time, nominate, in the prescribed manner, a person to whom his shares in or debentures of, the company shall vest in the event of his death.<br />
(2) ...........<br />
(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such shares in, or debentures of, the company, where a <br />
nomination made in the prescribed manner purports to confer on any person the right to vest the shares in, or debentures of, the company, the nominee shall, on the death of the shareholder or holder of debentures <br />
of the company or, as the case may be, on the death of the joint holders <strong>become entitled to all the rights in the shares or debentures of the company</strong> or, as the case may be, all the joint holders, in relation to such shares in, or debentures of the company <strong>to the exclusion of all other persons</strong>, unless the nomination is varied or cancelled in the prescribed manner.<br />
(4)......... <br />
<br />
<br />
<br />
This Judgment has been criticized by some legal authors ( a view expressed by Mr. Somasekhar Sundaresan in Business Standard may be accessed <a href="http://www.business-standard.com/india/storypage.php?autono=394274">here</a>) because until now the settled law, as laid down by the Supreme Court in <em><a href="http://indiankanoon.org/doc/1308094/">Sarbati Devi v. Usha Devi</a></em> in respect of nomination under Section 39 of the Insurance Act is that a nominee is merely a trustee for the estate of the deceased and nomination does not operate as succession. This principle has been followed in areas other than insurance as well. <br />
<br />
For example<br />
<a name='more'></a> in <a href="http://www.blogger.com/goog_284125641"><em>Ramdas Shivram Sattur v. Rameshchandra</em> </a><em><a href="http://www.indiankanoon.org/doc/1794785/">Popatlal Shah</a>,</em> the Bombay High Court, relying on Sarbati Devi, held that "<strong><em>the purpose of nomination under Section 30 of the Maharashtra Cooperative Societies Act, 1960 is essentially to provide for the discharge of the societies’ obligation and that a nomination does not lay down any special rule of succession of properties of a deceased member overriding the general rules of inheritance prescribed by the personal law of the member of a cooperative society</em></strong>." <br />
<br />
Similarly, in <em><a href="http://indiankanoon.org/doc/951629/">Arnab Kumar Sarkar v. Smt. Reba Mukherjee and Ors</a></em>., the Calcutta High Court in respect of nomination u.s 45Z of the Banking Regulation Act held, <em><strong>“just as section 39 of the Insurance Act, 1938 is for discharge of insurer's obligations, the purpose of Section 45Z of the Banking Regulation Act, 1949 is to provide for the discharge of the Bank’s obligation.” </strong></em><br />
<br />
Distinguishing two important judgments ( <em>Sarbati Devi v. Usha Devi,</em> AIR 1984 SC 346 and <em>Ramdas Shivram Sattur v. Rameshchandra Popatlal Shah,</em> 2009(3) BomCR 705) , the Hon'ble High Court in <em>Harsha Nitin Kokate Vs. The Saraswat Co-op. Bank Limited & Others</em>, held as follows<br />
<br />
<em><strong>"A reading of Section 109A of the Companies Act and 9.11 of the Depositories Act makes it abundantly clear that the intent of the nomination is to vest the property in the shares which includes the ownership rights thereunder in the nominee</strong> upon nomination validly made as per the procedure prescribed,, as has been done in this case. <strong>These Sections are completely different from Section 39 of the Insurance Act</strong> which require a nomination merely for the payment of the amount under the Life Insurance Policy without confirming any ownership rights in the nominee <strong>or under Section 30 of the Maharashtra Cooperative Societies Act </strong>which allows the Society to transfer the shares of the member which would be valid against any demand made by any other person upon the Society. Hence these provisions are made merely to give a valid discharge to the Insurance Company or the Cooperative Society without vesting the ownership rights in the Insurance Policy or the membership ights in the Society upon such nominee<strong>..." </strong></em><br />
<br />
In my opinion, though the judgment of the Bombay High Court in <em>Harsha Nitin Kokate v. The Saraswat Co-op. Bank Limited & Others</em>, has been crticized for departing from a settle position in law, it has correctly restricted the application of <em>Sarbati Devi v. Usha Devi</em> and other similar judgments by distinguishing them on the wordings of the respective statutes and given due regard to the express provisions of Section 109A of the Companies Act. <br />
<br />
I will disucss in greater depth the dispute on the legal status of a nominee in subsequent <a href="http://perspectivesonlaw.blogspot.com/2010/05/nominee-vs-legal-heirs_24.html">posts</a>.</div>
Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com4tag:blogger.com,1999:blog-4909407875632981048.post-91786235677017958032010-03-29T00:27:00.000-07:002017-08-11T20:43:48.821-07:00Appointment of Arbitrator by CJ - judicial or administrative order? Analysis Contd.<div dir="ltr" style="text-align: left;" trbidi="on">
Access earlies posts on this dicussion <a href="http://perspectivesonlaw.blogspot.com/2010/03/appointment-of-arbitrator-by-cj.html">here </a>and <a href="http://perspectivesonlaw.blogspot.com/2010/01/appointment-of-arbitrator-by-cj.html">here</a>. <br />
<br />
<strong>Argument 3: Comparison to UNCITRAL Model Law</strong><br />
<br />
The arbitration act has adopted the UNCITRAL Model Law on International Commercial Arbitration. However, the Arbitration and Conciliation Act, 1996, has made some departures from the Model Law. One such departure, relevant to the present dispute is the use of term "Chief Justice" instead of "Court" in Sec. 11.<br />
<br />
Article 11 of the Model Law which is the corresponding provision to Section 11 of the Act, reads as follows:<br />
<br />
<em>“…2. The parties are free to agree on a procedure of appointing the arbitrator or arbitrators, subject to the provisions of paragraphs (4) and (5) of this article.</em> <br />
<em>3. Failing such agreement, </em><em><br />
</em><br />
<em>(a) in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator; if a party fails to appoint the arbitrator within thirty days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of their appointment, the appointment shall be made, upon request of a party, <strong>by the court or other authority specified in article 6</strong>; </em><br />
<em>(b) in an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, he shall be appointed, upon request of a party,<strong> by the court or other authority specified in article 6</strong>. </em><em><br />
</em><br />
<em>4. Where, under an appointment procedure agreed upon by the parties, </em><em><br />
</em><br />
<em>(a) a party fails to act as required under such procedure, or </em><br />
<em>(b) the parties, or two arbitrators, are unable to reach an agreement expected of them under such procedure, or </em><br />
<em>(c) a third party, including an institution, fails to perform any function entrusted to it under such procedure, <strong>any party may request the court or other authority specified in article 6</strong> to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.</em> <br />
<em>5. A decision on a matter entrusted by paragraph (3) and (4) of this article to the court or other authority specified in article 6 shall be subject to no appeal…”</em><br />
<br />
In <em>Konkan Railway Corporation Ltd. v. Mehul Construction Co</em>., it was held that the Legislature had consciously chosen to confer the power on the 'Chief Justice' and not on the 'Court'. The order passed by the Chief Justice or his nominee therefore is an administrative order, otherwise, if it were intended to be judicial, the legislature would have used the expression "court" or "judicial authority".<br />
<br />
On the other hand, in <em>Patel Engineering</em>, this departure was explained as follows:<br />
<a name='more'></a><br />
<br />
<br />
“<em>the fact that instead of the court, the powers are conferred on the Chief Justice, has to be appreciated in the context of the statute. 'Court' is defined in the Act to be the principal civil court of original jurisdiction of the district and includes the High Court in exercise of its ordinary original civil jurisdiction. The principal civil court of original jurisdiction is normally the District Court. The High Courts in India exercising ordinary original civil jurisdiction are not too many. So in most of the States the concerned court would be the District Court. Obviously, the Parliament did not want to confer the power on the District Court, to entertain a request for appointing an arbitrator or for constituting an arbitral tribunal under Section 11 of the Act. It has to be noted that under Section 9 of the Act, the District Court or the High Court exercising original jurisdiction, has the power to make interim orders prior to, during or even post arbitration. It has also the power to entertain a challenge to the award that may ultimately be made. The framers of the statute must certainly be taken to have been conscious of the definition of 'court' in the Act. It is easily possible to contemplate that they did not want the power under Section 11 to be conferred on the District Court or the High Court exercising original jurisdiction. The intention apparently was to confer the power on the highest judicial authority in the State and in the country, on Chief Justices of High Courts and on the Chief Justice of India</em>.”<br />
<br />
Thus according to the majority in Patel Engineering, the use of the term Chief Justice instead of the term court has no bearing on the nature of the function to be exercised. The function is still adjudicatory and therefore the order is judicial.</div>
Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-10782539344289070652010-03-06T00:00:00.000-08:002017-08-11T20:44:18.837-07:00Appointment of Arbitrator by CJ - judicial or administrative order? Analysis<div dir="ltr" style="text-align: left;" trbidi="on">
I write this post in continuation to an earlier post which introduces the question - whether the decision of the Chief Justice in appointing an arbitrator is a judicial or administrative order? The earlier post may be accessed <a href="http://perspectivesonlaw.blogspot.com/2010/01/appointment-of-arbitrator-by-cj.html">here.</a> <br />
<br />
Unlike other issues, where I discuss arguments from one side completely and then the other, for this issue, I would address each argument and its counter argument at the same time. <br />
<br />
<strong>Argument 1: Purpose of Highest Judicial Authority.</strong> <br />
<br />
<br />
The major thrust by the majority in the <em>Patel Engineering Case</em>, was that, when a statute confers a power or imposes a duty on the highest judicial authority in the State or in the country, and has made its decision final on matters its decides, then that decision cannot be purely administrative and that the authority has to act judicially. <br />
<br />
<br />
Honb'le <a href="http://www.supremecourtofindia.nic.in/judges/bio/sitting/ckthakkar.htm">C.K Thakker J.</a> gave a dissenting opinion on this argument, and explained that the purpose of selecting the Chief Justice and in conferring upon him the power to appoint an arbitrator is to ensure complete independence, total impartiality and highest degree of credibility in arbitral process, as the office occupied by them would infuse greater confidence in the procedure in appointing an arbitrator. But that does not mean that the Chief Justice is exercising judicial or quasi-judicial power. Thus the intention of the legislature is selecting an authority like the Chief Justice was to bring credibility in arbitral process and nothing more. <br />
<br />
Both arguments appear equally convincing and this question – "Why would the legislature choose to confer power to appoint an arbitral tribunal on the highest judicial authority in the state/country? " remains intriguing. <br />
<br />
<strong>Argument 2: Impact of the Principle of "<em>Kompetenz - Kompetenz</em>"</strong><br />
<br />
Section 16(1) of the Arbitration and Conciliation Act, 1996 which provides that the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement incorporates the principle popularly know as <em>Kompetenz – Kompetenz</em>.<br />
<br />
The majority in <em><a href="http://www.indiankanoon.org/doc/1641452/">Patel Engineering</a></em> held that Section 16(1) doesn’t mean that only the Arbitral Tribunal can decide the question of existence and validity of the arbitration agreement. It does not preclude the Chief Justice from deciding that question if it arises before him under a Section 11 application. It further held that, it would be incongruous to say that after the Chief Justice had appointed an arbitral tribunal, the arbitral tribunal can turn round and say that the Chief Justice had no jurisdiction or authority to appoint the tribunal, and that is why his decision is given finality under Section 11(7). <br />
<br />
On the other hand, Honb'le <a href="http://www.supremecourtofindia.nic.in/judges/bio/sitting/ckthakkar.htm">C.K Thakker J</a>. opined that, <br />
<a name='more'></a> <strong><em>first</em></strong>, finality of the order has nothing to do with the nature of function to be performed by the Chief Justice. Statutory finality has been given to prevent appeal, review or revision against the decision. <em><strong>Secondly</strong></em>, the function of the Chief Justice under Section 11 is to be performed on a prima facie satisfaction. <strong><em>Thirdly</em></strong>, he explains, that, the principle of <em>Kompetenz- Kompetenz</em> is a rule of "chronological priority" and not that the arbitrator is the sole judge to decide upon his jurisdiction. This means that, it is the rule whereby arbitrators must have the first opportunity to hear challenges relating to their jurisdiction. Their decision however remains subject to subsequent review by the courts, which in the Indian context is provided for under Section 34 of the Act. <br />
<br />
On reading Honb'le Justice Thakker’s opinion, it may be said that, while appointing an arbitral tribunal under Section 11, the only function of Chief Justice is to take into consideration the qualifications of the arbitrator as required by the agreement, and to see that an impartial arbitrator is appointed (which is mandatory under section 11). The Chief Justice can at most satisfy himself on a prima facie basis, whether an arbitration agreement exists but cannot decide the contentious issues between the parties. Going by this interpretation, a situation where the arbitral tribunal under Section 16(1), can turn round and say that the Chief Justice had no jurisdiction or authority to appoint the tribunal, (as feared by the majority), will not arise. Also, therefore, there will be no conflict between Section 11(7) and Section 16(1) of the Act.<br />
<br />
<br />
I will consider some more arguments on this issue in subsequent posts.</div>
Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com1tag:blogger.com,1999:blog-4909407875632981048.post-34124899592451589392010-03-04T07:16:00.000-08:002010-03-04T07:16:57.813-08:00Retrospective Operation of the PWDV Act contd..In my <a href="http://perspectivesonlaw.blogspot.com/2010/02/retrospective-operation-of-pwdv-act.html">earlier post</a>, I proposed an argument that, being a remedial statute, the PWDV Act may be applied retrospectively. In this post, I propose an argument based on the wordings/language of the PWDV Act. <br />
<br />
Though the inhibition against retrospective construction has been applied with less insistence in case of remedial statutes, there is no such rule that all benevolent measures are retrospective. ( G.P Singh, <em>Interpretation of Statutes</em>.) Thus, I present another argument in favour of the retrospective application of the Act. <br />
<br />
The Supreme Court made an interesting observation in <em>T.K. Lakshmana v. State of Madras</em>, AIR 1968 SC 1489. It held that Section 44-B (2)(a)(i) Madras Hindu Religious Endowments Act, 1926, applies retrospectively because of the use of the words 'has made,' 'has failed,' 'has ceased,' 'has become,' as these words are capable of denoting events happening before or after coming into force of the statute. Similarly, under the PWDV Act, it may be noted that Section 4, Section 18 and 19 also make use of such expressions. <br />
<br />
Section 4 states, " <em>any person who has reason to believe that an act of domestic violence <strong>has been,</strong> or is being, or is likely to be committed, may give information about it to the concerned Protection Officer</em>." <br />
<br />
Section 18 states, " <em>The Magistrate... on being prima facie satisfied that domestic violence <strong>has taken place</strong> or is likely to take place, pass a protection order...."</em><br />
<br />
In light of the aforementioned Judgment of the Supreme Court, it may be submitted that the use of expressions " has been committed" or "has taken place" used in respect of domestic violence, are capable of denoting an act of domestic violence committed both before or after coming into force of the Statute. Thus, having regards to the words of the Statute, its object and its nature, it may be concluded that the PWDV Act may be given retrospective application.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com2tag:blogger.com,1999:blog-4909407875632981048.post-70456404568059400652010-02-27T02:26:00.000-08:002010-03-03T11:50:47.108-08:00Retrospective Operation of PWDV ActAmongst the many conflicting decisions arising out the application of Protection of Women Against Domestic Violence Act, one of them, is in respect of the operation of the Act. The <a href="http://ipc498a.files.wordpress.com/2008/08/ap-hc-crl-3714-2007-dv-not-retrospective.pdf">Andhra Pradesh High Court</a> held that the PWDV Act does not apply retrospectively and that an action under the Act can lie only if the acts of domestic violence are committed on or after 26 Oct 2006, i.e. the date on which the Act came into force. Similarly, a <a href="http://ipc498a.files.wordpress.com/2008/11/ashma_vs_afsar_etc-cc-no-3112008-domestic-violence-act-doesnt-have-any-retrospective-effect.pdf">Delhi Metropolitan Court</a> and a <a href="http://savefamily.org/index.php?option=com_content&view=article&catid=1:latest-news&id=234:Domestic%20violence%20Act:%20No%20retrospective%20effect-Goa-Cities-The%20...&Itemid=50">JMFC</a> in Goa also took the view that this Act will not be applicable if the acts complained of have been committed prior to the passing of the Act. On the other hand the Bombay High Court and <a href="http://judis.nic.in/chennai/qrydisp.asp?tfnm=13665">Madras High Court</a> have taken a different view. They held that, the court is competent to take cognizance of the act of domestic violence committed even prior to the Act came into force and pass necessary protection orders. The Act can be applied retrospectively to take cognizance of the act of violence alleged to have been committed even prior to the coming into force of the Act. This controversy over the application of the Act arises because the Act does not expressly state whether it applies retrospectively or not. <br />
<a name='more'></a><br />
<br />
The argument for holding against restrospective operation has been that, an act having penal consequences cannot be applied retrospectively and therefore the PWDV Act cannot be applied retrospectively. For example the AP HC, in the aforementioned case observed, “<em><strong>It is a fundamental principle of law that any penal provision has no retrospective operation but only prospective. There is no allegation either in the report or in the statement or in the complaint on the 1st Respondent with regards to the acts of domestic violence that took place on or after 26-10-2006.Therefore continuation of proceedings against the petitioners is nothing but abuse of process of court</strong>”.</em> <br />
<em></em> <br />
Though the AP High Court was correct in its observation regarding the principle of retrospective operation in case of a penal provision, it is respectfully submitted that it may haved erred in asuming that PWDV Act attracts penal consequences. The PWDV Act does not prescribe any criminal punishment for committing an act of domestic violence. It may be quoted from the Statement of Objects and Reasons of the Act, that the Act is “<em><strong>to provide for a remedy under the civil law which is intended to protect the women from being victims of domestic violence and to prevent the occurrence of domestic violence in society</strong></em>.” Penal consequences are provided only in case of a breach of the protection order (section 31 of the DV Act) and not for the acts of domestic violence. <br />
<br />
Though the general rule is that, every legislation is prima facie prospective unless it is expressly or by necessary implication, made to have retrospective operation, (<em>Rashid Ahmed v. State of Uttar Pradesh</em>, AIR 1979 SC 592; <em>Narsing Rao v. Shankar Saran</em>, AIR 1958 All 775; <em>Pirbux v. Babulal</em>, AIR 1987 MP 18) remedial statutes constitute an exception to this general rule. Remedial statutes are legislations directed to cure some immediate mischief and to bring into effect some type of social reform by ameliorating the condition of a certain class of persons who, according to present day notions may not have been fairly treated in the past. (See Justice G.P. Singh, <em>Principles of Statutory Interpretation,</em> 11th edition 2008) The PWDV Act being a legislation of this nature, (i.e. a legislation intended to ameliorate the condition of women who have been victims of domestic violence), is a remedial statute and may therefore be applied retrospectively. <br />
<br />
Having regard to the object and scope of the Act, it may be concluded that the Act may be given retrospective application. However, it can also not be denied that giving the Act retrospective application, may also open the gates to substantial abuse of the enactment. Until the Apex Court finally decides this question, the law regarding operation of the PWDV Act remains confusing and subject to multiple interpretations by various High Courts.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com5tag:blogger.com,1999:blog-4909407875632981048.post-44285473012362796912010-01-21T09:49:00.000-08:002010-03-06T00:23:47.475-08:00Appointment of Arbitrator by CJ - judicial or administrative order?Section 11 of the <a href="http://www.ficci-arbitration.com/htm/acts.pdf">Arbitration and Conciliation Act, 1996</a> governs the law relating to Appointment of Arbitrators. It provides that, if the parties fail to appoint an arbitrator or when the two appointed arbitrators fail to decide upon the third arbitrator, then the appointment shall be made by the Chief Justice or any person or institutition designated by him. <br />
<br />
This provision, empowering the Chief Justice to appoint an arbitrator gave rise to the question whether the order passed by the Chief Justice in appointing an arbitrator is an administrative or a judicial order. Until the Judgment of the Hon'ble Supreme Court in <em><a href="http://www.indiankanoon.org/doc/1641452/">S.B.P. and Co. v. Patel Engineering Ltd. and Anr</a>, </em>the position that prevailed was that the order is an 'administrative order.' However, the SC in <em>Patel Engineering </em>overruled <a href="http://judis.nic.in/supremecourt/qrydisp.aspx?filename=27300"><em>Konkan Railway Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd</em>.</a> to hold that, the power exercised by Chief Justice of High Court or India under Section 11of the Arbitration and Conciliation Act, 1996, is not an administrative power but a 'juidicial power.'<br />
<br />
<strong><em>The consequence of the Judgment in Patel Engineering is that</em></strong> :<br />
<br />
1)The CJ while deciding on the question of appointment of arbitrator, has to satisfy himself , First of the existence of an arbitration clause and secondly, that the arbitration agreement is valid.<br />
<br />
2) Once the CJ constitutes an arbitration tribunal, the triunal can no longer decide the question in respect of the existence or validity of the arbitration agreement under Section 16 of the 1996 Act<br />
<br />
3) The power under Section 11 can be delegated by the CJ of a High Court only to a Judge of that Court and by the Chief Justice of India to another judge of the Supreme Court.<br />
<br />
4) Since an order passed by the Chief Justice of the High Court or by the designated judge of that court is a judicial order, an appeal will lie against that order only under Article 136 of the Constitution of India to the Supreme Court. But there can be no appeal against an order of the Chief Justice of India or a judge of the Supreme Court designated by him <br />
Though, the law on this question has been settled by the Supreme Court through this judgment, the controversy remains (at least from an academic perspective). <br />
<br />
In my subsequent posts, I will examine the arguments that may be advanced both in favour and against the position that the order of the CJ appointing an arbitrator under section 11 is a judicial order. Read subsequent post <a href="http://perspectivesonlaw.blogspot.com/2010/03/appointment-of-arbitrator-by-cj.html">here</a>.<br />
<br />
See also <a href="http://legaldevelopments.blogspot.com/2009/04/nlsir-symposium-case-for-judicial.html">NLSIR Symposium: A case for Judicial Intervention</a> on the blog <a href="http://legaldevelopments.blogspot.com/">Law and Legal Developments</a>.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com2tag:blogger.com,1999:blog-4909407875632981048.post-76855710033723765832009-12-13T06:53:00.000-08:002009-12-13T06:58:10.825-08:00Competition Law - Presumption in Section 3(3) contd..I have in my earlier posts,(<a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section.html">here</a>, <a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section_03.html">here</a> and <a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section_05.html">here</a>) proposed argumets which may be made in favour of the the presumption being irrebuttable. I will now present the arguments from the other side. <br />
<br />
<strong>Argument 1- Presumption Rebuttable</strong>.<br />
<br />
One of the principles of Interpretation of Statutes is that another statute may be referred to while interpreting a statute when the two are similar i.e. when they are statutes in <em>pari materia</em> ( <a href="http://www.indiankanoon.org/doc/729673/"><em>Harshad S. Mehta v. State of Maharashtra</em>,</a> (2001) 8 SCC 257)<br />
<br />
It has been held by the Supreme Court in <em>State of Madras v. A Vaidyanath Aiyer</em>, AIR 1958 SC 61, that it is not necessary that the entire subject-matter in the two statutes should be identical before any provision in one may be held to be in <em>pari materia</em> with some provision in the other. In this case, Section 4 of the Prevention of Corruption Act, 1947 which directs that on proof that the accused has accepted any gratification other than the legal remuneration, it shall be presumed unless the contrary is established by the accused, has been held to be in <em>pari materia</em> with the subject- matter dealt with by the Indian Evidence Act, 1872. Thus the definition of 'shall presume' in the Indian Evidence Act has been utilised to construe the words 'it shall be presumed' in section 4 of the Prevention of Corruption Act. <br />
<br />
In subsequent cases also, the court has used the definition of 'shall presume' in the Evidence Acr to construe the meaning of the words 'it shall be presumed' in other legislations. For example in <em>Kumar Exports v. Sharma Carpets, </em>AIR2009SC1518 and also <em>Satish and Ors. v. State of U.P. and Ors</em>., JT2009(9)SC479. <br />
<br />
In <a href="http://www.lawyersclubindia.com/sc/sc_details.asp?sc_id=1326&sc_title=Union%20of%20India%20Vs.%20Pramod%20Gupta%20(D)%20by%20LRs.%20&%20Ors."><em>Union of India v. Pramod Gupta</em></a>, AIR2005SC3708, the Supreme Court categorically stated that when a Statute uses the expression it shall be presumed then regard must be had to the expression 'shall presumed under the Evidence Act and that, <strong><em>'shall be presumed' cannot be considered symonymous with 'conclusive proof'</em></strong><br />
<br />
Thus having regard to these judgments of the Hon'ble Supreme Court, one will be tempted to say that the expression 'shall be presumed' used in Section 3(3) of the Competition Act is rebuttable. <br />
<br />
<strong>Argument 2 - Presumption Rebuttable.</strong> <br />
<br />
Usually, a presumption will be irrebuttable only when - for the advancement of justice, the law assumes a fact and does not allow it to be disproved. For example, a man cannot dispute his paternity over a child, if the child born is born in the wedlock.<br />
<br />
It may be noticed however, that the legislators nowadays rarely make a presumptions irrebuttable and modern courts are slow to recognize presumptions as irrebuttable. Moreover, they are disposed to rather restrict than to extend their number. <br />
<br />
Thus, it is arguable that if there is ambiguity in Section 3(3) of the Competition Act regarding the nature of presumtion, the courts should lean in favour of its rebuttability. Whether advancement of justice requires this presumption to be irrebuttable is however, a matter that can be best left to the judgment of the adjudicators.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-90707724781379122762009-12-05T06:35:00.000-08:002009-12-05T06:54:26.266-08:00Competition Law - Presumption in Section 3(3) contd..<strong>Argument 3 – Presumption Irrebuttable</strong><br />
<br />
The third factor I see in support of the argument that the presumption is irrebuttable, is the use of words “shall be presumed.” This argument may not be as strong as the <a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section.html">Argument 1</a> and <a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section_03.html">Argument 2</a> but it can nevertheless be considered. <br />
<br />
The Indian law, under the Evidence Act, Section 4 provides for three kinds of presumptions - “<strong>may presume</strong>,” “<strong>shall presume</strong>,” and “<strong>conclusive proof</strong>”. When a court “may presume” a fact, it means that it is at the courts discretion to presume it until it is disproved. In case where the court “shall presume,” it has no option but to presume the fact, until it is disproved and in the case where something is said to be conclusive proof, then under no circumstances will a court allow it to be disproved. <br />
<br />
It may be noted that, in other enactments, excluding the Evidence Act, the legislators while creating a presumption use the phrase shall presume/<strong>shall be presumed unless the contrary is proved</strong>. The words shall presume/ shall be presumed are rarely used alone. They are always accompanied by the expression unless proved to the contrary. For example see <br />
<br />
• <a href="http://www.vakilno1.com/saarclaw/srilanka/cosmeticsact/cosmeticsact.htm">Cosmetics, Devices and Drugs Act, 1980</a><br />
<br />
“ <em>Section 34 (1) For the purposes of this Act and of any regulations made thereunder- (a) any cosmetic, device or drug found, kept or exhibited in any shop or other place commonly used for the sale of articles</em> <em><strong>shall be presumed until the contrary is proved</strong></em> <em>to be intended for sale…”</em><br />
<br />
• <a href="http://punjabrevenue.nic.in/hadoptact(1).htm">Hindu Adoption and Maintenance Act</a><br />
<br />
<em>“Section 16- Whenever any document registered under any law for the time being in force is produced before any court purporting to record an adoption made and is signed by the person giving and the person taking the child in adoption, the court <strong>shall presume</strong> that the adoption has been made in compliance with the provisions of this Act <strong>unless and until it is disproved</strong>.”</em><br />
<br />
• <a href="http://chddistrictcourts.gov.in/THE%20NEGOTIABLE%20INSTRUMENTS%20ACT.pdf">Negotiable Instruments Act, 1881</a><br />
<br />
<em>“Section 139 -<strong> It shall be presumed, unless the Contrary is proved</strong>, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability.”</em><br />
<br />
• <a href="http://customs%20act,%201962%20(52%20of%201962)/">Customs Act, 1962 (52 of 1962)</a><br />
<br />
<em>“SECTION 11L (3) If at any time, on a verification made by a proper officer, it is found that any specified goods owned, possessed or controlled by a person are lesser in quantity than the stock of such goods as shown, at the time of such verification, in the accounts referred to in sub-section (1), read with the accounts referred to in sub-section (2), it <strong>shall be presumed, unless the contrary is proved, </strong>that such goods, to the extent that they are lesser than the stock shown in the said accounts, have been illegally exported and that the person owning, possessing or controlling such goods has been concerned with the illegal export thereof.”</em><br />
<br />
• <a href="http://wcdhry.gov.in/ChildRestraintAct.pdf">Child Marriage Restraint Act</a><br />
<br />
<em>“Section 6 (2) For the purpose of this section, it <strong>shall be presumed unless and until the contrary is proved,</strong> that where a minor has contracted a child marriage, the person having charge of such minor has negligently failed to prevent marriage from being solemnized.”</em><br />
<br />
• <a href="http://www.persmin.nic.in/EmployeesCorner/Acts_Rules/PCAct/pcact.pdf">Prevention of Corruption Act, 1988</a><br />
<br />
<em>“Section 20 (1) Where, in any trial of an offence punishable under section 7 or section 11 or clause (a) or clause (b) of sub-section (1) of section 13 it is proved that an accused person has accepted ….to obtain for himself, or for any other person, any gratification (other than legal remuneration) or any valuable thing from any person, it <strong>shall be presumed, unless the contrary is proved</strong>, that he accepted … to obtain that gratification or that valuable thing, as the case may be, as a motive or reward such as is mentioned in section 7….”</em><br />
<br />
• <a href="http://www.vakilno1.com/bareacts/companiesact/companiesacts3.htm">Companies Act, 1956</a><br />
<br />
<em>“Section 195 - where minutes of the proceedings of any general meeting of the company or of any meeting of its Board of directors or of a committee of the Board have been kept in accordance with the provisions of section 193, then, <strong>until the contrary is proved</strong>, the meeting <strong>shall be deemed</strong> to have been duly called and held….”</em><br />
<br />
• <a href="http://www.satp.org/satporgtp/countries/india/document/actandordinances/maharashtra1999.htm">Maharashtra Control of Organized Crime Act</a><br />
<br />
<em>“Section 22(2)- In a prosecution for an offence of organised crime punishable under sub-section (2) of section 3, if it is proved that the accused rendered any financial assistance to a person accused of, or reasonably suspected of, an offence of organised crime, the Special Court <strong>shall presume, unless the contrary is proved,</strong> that such person has committed the offence under the said sub-section (2).”</em><br />
<br />
In these examples, there is no doubt that the presumption is irrebuttable. However, what are the consequences when the legislators create a presumption using the expressions “shall presume or shall be presumed” not followed by “unless the contrary is proved?”<br />
<br />
See for example:<br />
<br />
• <a href="http://copyright.gov.in/Documents/CopyrightRules1957.pdf">Indian Copyright Act</a><br />
<br />
<em>“Section 19 (6) - If the territorial extent of assignment of the rights is not specified, it <strong>shall be presumed</strong> to extend within India.”</em><br />
<br />
• <a href="http://www.mohfw.nic.in/MTP%20Act%201971.htm">Medical Termination of Pregnancy Act</a><br />
<br />
<em>“ Section 3 Explanation 1 - Where any pregnancy is alleged by the pregnant woman to have been caused by rape, the anguish caused by such pregnancy <strong>shall be presumed</strong> to constitute a grave injury to the mental health of the pregnant woman.”</em><br />
<br />
• <a href="http://www.satp.org/satporgtp/countries/india/document/actandordinances/maharashtra1999.htm">Maharashtra Control of Organized Crime Act</a><br />
<br />
<em>“Section 17(3) - Where it is proved that the accused has kidnapped or abducted any person, the Special Court <strong>shall presume</strong> that it was for ransom.”</em><br />
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In appears that the presumptions created in these enactments are meant to be conclusive. Thus, the point I am making is that, when the legislators use the word shall presume or shall be presumed they intend to create an irrebuttable presumption and if they do not intend it to be conclusive, they use the words "shall presume/shall be presumed unless the contrary is proved."<br />
<br />
Coming to the Competition Act, it may be seen that legislators have used the expression “shall be presumed” only, without adding - " unless proved to the contrary," and thus they intended this presumption to be irrebuttable. If that was not the case, then there would be no need to add a proviso which carves out exceptions that will not be affected by section 3(3). A similar view has been expressed in the blog <a href="http://legaldevelopments.blogspot.com/2009/12/presumptions-under-competition-act.html">Law and Legal Developments</a>.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-25217921703008241022009-12-03T08:00:00.000-08:002009-12-03T08:07:09.623-08:00Competition Law - Presumption in Section 3(3) contd..This post is in continuation of <a href="http://perspectivesonlaw.blogspot.com/2009/12/competition-law-presumption-in-section.html">this</a> and <a href="http://perspectivesonlaw.blogspot.com/2009/11/presumption-under-section-33.html">this</a> post. <br />
<br />
<strong>Argument 2 - Irrebuttable presumption</strong> <br />
<br />
Another useful aid of construction is the Parliamentary history which includes the Bill and the Reports of commissions or inquiry committees preceding the introduction of a Bill.( See <em>CIT, MP v. Sodra Devi</em>, AIR 1957 SC 832; <em>Express Newspapers Ltd. v. Union of India</em>, AIR 1958 578; <em>Madanlal F. Dudhediya v. S. Chagandeo Sugar Mills Ltd.</em>, AIR 1962 SC 1543)<br />
<br />
The recommendations of the Raghavan Committee Report which preceded the passing of the new Competition Act may thus, be looked at. The Report suggested that in general, the rule of reason test is required for establishing that an agreement is illegal. However, for certain kinds of agreements, the presumption is often that they cannot serve any useful or pro-competitive purpose and therefore do not need to be subject to the rule of reason test. They further suggested the following kinds of horizontal agreements to be presumed anti-competitive – <br />
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1) Agreements regarding prices, including those that directly or indirectly fix the purchase or sale price.<br />
<br />
2) Agreements regarding quantities, including those aimed at limiting or controlling production and investment.<br />
<br />
3) Agreements regarding bids.<br />
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4) Agreements regarding market sharing, by territory, type or size of customer or in any other way.<br />
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The report even referred to this presumption as the per se illegality rule, rooted in the provisions of the US law. <br />
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It may be pointed out that a significant number of the members of the Committee were not in favour of identifying categories presumed to be illegal, but the majority felt that such agreements are presumed to be illegal and this recommendation of the majority can be seen to have been given effect to by the legislators. <br />
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Thus having regard to the Raghavan Committee Report too, one can conclude that the intent of the legislature was to make the presumption under Section 3(3) irrebuttable.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-63035949390495106842009-12-03T07:42:00.000-08:002009-12-03T08:01:40.447-08:00Competition Law - Presumption in Section 3(3)In continuation to my last post, which may be accessed <a href="http://perspectivesonlaw.blogspot.com/2009/11/presumption-under-section-33.html">here</a>. I will now, first, present arguments from the side that the presumption raised is <strong>irrebuttable.</strong> <br />
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<br />
<strong>Argument 1 - Presumption Irrebuttable</strong><br />
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While interpreting a statute, the true intent of the legislature has to be gathered having due regard to the language used therein. However, when the language used is ambiguous and unclear, courts may resort to external aids of construction. Thus, while interpreting an Indian Statute, Indian Courts do not hesitate to refer to foreign statutes and foreign decisions of countries which follow the same system of jurisprudence as the Indian jurisprudence. <br />
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The new competition act has been drawn on the same lines as the competition law of other legal systems such as the U.S, EU etc. and therefore one may refer to these laws to decipher the intention of the legislature in determining whether the presumption raised in section 3(3) is irrebuttable. <br />
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USA follows two approaches in determining whether any agreement or any practice is anti-competitive- the “per se rule” and the “rule of reason.” Horizontal agreements which fix prices, allocate customers or territories, restrict output or rig bids are considered to be so pernicious to competition that they are subjected to the “per se” illegal rule. {see <em>White Motor Co. v. United States</em> <a href="http://supreme.justia.com/us/372/253/case.html">372 US 253</a> (1963); <em>N.C.A,A v. Board of Regents of University of Oklahoma</em> <a href="http://supreme.justia.com/us/468/85/case.html">468 US 85</a> (1985); <em>Federal Trade Commission v. Superior Court Trial Lawyers Association</em> <a href="http://supreme.justia.com/us/493/411/">493 US 411</a>(1990); <em>US v. Topco Association Inc</em> <a href="http://supreme.justia.com/us/405/596/case.html">405 US 596</a> (1972)}<br />
<em><strong>The per se rule is the judicial principle that “a challenged action falls into the category of agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal”, regardless of whether it actually harms competition.</strong></em> {see <em>Northern Pacific R. Co. v. United States</em> <a href="http://supreme.justia.com/us/356/1/case.html">356 US 1</a> (1958); <em>Northwest Wholesale Stationers Inc v. Pacific Stationery and Printing Co</em> <a href="http://supreme.justia.com/us/472/284/case.html">472 US 284</a> 1985); <em>Arizona v. Maricopa County Medical Society</em> <a href="http://supreme.justia.com/us/457/332/">457 U.S. 332</a>, (1982); <em>United States v. Topco Associates, Inc</em>.405 U.S. 596 (1972)}<br />
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A similar practice in EU law can be seen from Aricle 81 of the EC Treaty. Article 81(1) sets out a prohibition in the following terms: <br />
<br />
<em>“(1) The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: </em><br />
<em><br />
</em><br />
<em>(a) directly or indirectly fix purchase or selling prices or any other trading conditions; </em><br />
<em><br />
</em><br />
<em>(b) limit or control production, markets, technical development, or investment; </em><br />
<em><br />
</em><br />
<em>(c) share markets or sources of supply; </em><br />
<em><br />
</em><br />
<em>(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; </em><br />
<em><br />
</em><br />
<em>(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”</em><br />
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Thus, it can be seen that the trade agreements and practices outlined above are verbatim similar to trade agreements encompassed in Section 3 (3) of the Indian Competition Act. These kind of agreements are by their very nature considered to be so harmful to competition that no evidence needs to be entertained to show how a challenged action which fits into the said criteria, is not harmful in reality. And therefore, the presumption raised must be considered to be an irrebuttable presumption, similar to the practice in US and EU nations. <br />
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I have referred to only the US and EU practice here, but other legal systems too adopt a similar approach in respect of horizontal agreements illustrated in Section 3(3) of the Competition Act and in fact even impose a punishment for conducting such trade practices, without even giving an opportunity to present any defense for conducting the practice. <br />
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I will present 2 more arguments in support of this proposition in the next posts.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-64316489248976472722009-11-22T09:36:00.000-08:002009-11-22T09:40:41.416-08:00Presumption under Section 3(3) Competition Act: Rebuttable or Irrebuttable?Sections 3 and 4 of the Competition Act (India) relating to anti-competitive agreements and abuse of dominant postion, were recently brought into force on May 20, 2009.<br />
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Section 3 of the Act declares that anti-competitive agreements will be void and prohibits enterprises and persons from entering into agreements in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services that <strong><em>causes or is likely to cause an appreciable adverse effect on competition in India. </em></strong><br />
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Generally agreements are classified into horizontal and vertical agreements for the purpose of competition laws. However, the Indian law doesn't use this terminology. Nevertheless it can be seen that, in substance Section 3(3) covers horizontal agreements, whereas Section 3(4) covers vertical agreements. The importance of this distinction is that normally horizontal agreements relating to price fixing, market sharing etc. are considered to be "per se "anti-competitive and no defence is available. <br />
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Section 3( 3) reads -<br />
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<em>Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or similar trade of goods or provision of services, which—</em><br />
<em><br />
</em><br />
<em>(a) directly or indirectly determines purchase or sale prices;</em><br />
<em><br />
</em><br />
<em>(b) limits or controls production, supply, markets, technical development, investment or provision of services;</em><br />
<em><br />
</em><br />
<em>(c) shares the market or source of production or provision of services by way of allocation of geographical area of market, or type of goods or services, or number of customers in the market or any other similar way;</em><br />
<em><br />
</em><br />
<em>(d) directly or indirectly results in bid rigging or collusive bidding, <strong>shall be presumed to have an appreciable adverse effect on competition:</strong></em><br />
<em><br />
</em><br />
<em>Provided that nothing contained in this sub-section shall apply to any agreement entered into by way of joint ventures if such agreement increases efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.</em><br />
<em><br />
</em><br />
<em>Explanation.—For the purposes of this sub-section, "bid rigging" means any agreement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding</em><br />
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The use of the phrase " shall be presumed" in Section 3(3) raises considerable amount of doubt on the nature of the presumption raised. Is the presumption rebuttable or irrebuttable? One opinion says the presumption can be rebutted ( <a href="http://www.livemint.com/2009/06/07212559/Competition-law-coming-into-f.html">see here</a>), while another opinion is that it cannot be rebutted (<a href="http://www.globalcompetitionreview.com/reviews/16/sections/59/chapters/621/india-overview/">see here</a>). <br />
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The importance of this question may be expalined by this example:<br />
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A particular agreement between enterprises engaged in identical trade of goods is say alleged to be one which shares markets by way of geographical allocation. Once this fact of market sharing is established, the enterprises will not be allowed to show how the agreement is not anti-competitive, if the presumption is irrebuttable. Whereas if it is rebuttable, then its only a matter of burden of proof. Once the requirements on Section 3(3) are met, the burden will be on the enterprises to show how their agreement does not have an appreciable adverse effect on competition. <br />
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My next post will consider the two arguments in detail.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-29266890374647518162009-11-13T07:06:00.000-08:002009-12-14T08:08:37.859-08:00Can a woman be Respondent under DV Act?A beautiful legal article has been written by Mr. Neeraj Aarora on the same question discussing in detail the judgments on this point and also analysing the question with the aid of principles of interpretation of statutes. The same may be accessed <a href="http://blogs.siliconindia.com/neerajaarora">here</a>. In addition to the argument I have made in the post which may be accessed <a href="http://perspectivesonlaw.blogspot.com/2009/10/can-woman-be-respondent-under-dv-act.html">here</a>, he discusses the principles of interpretation of a "proviso" in greater detail.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com2tag:blogger.com,1999:blog-4909407875632981048.post-56803971343099720322009-11-08T10:18:00.000-08:002010-05-12T05:48:17.304-07:00State's side- Constitutionality of the 20 week limit in MTP ActIn this post I present the arguments on this question from the State's perspective. <br />
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<strong>The limit on abortion is purely a question of policy</strong> -<br />
<br />
It is well settled that the SC and HC will not interfere or adjudicate upon Government policy matters. (V.G Ramachandra, General Principles of Writ Jurisdiction, Vol. 1, 6th Ed. p. 550) The principle is firmly embedded in the Constitution, that the policy of law and expediency of passing it, are matters for the legislature to decide, while interpretation of laws and their validity fall within the exclusive adjudicatory functions of the court. ( <em>Special Courts Bill, 1978, Re, (1979) 1 SCC 380, 405</em>) This is because in complex social, economic or commercial matters decisions have to be taken keeping in mind several factors, and it is not possible for the courts to consider competing claims and conflicting interests and to conclude in which way the balance tilts. ( <em>Nagaraj v. State of A.P, (1985) 1 SCC 523</em>)<br />
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First, barring a few parts of the world, abortion laws provide for a limit on the gestation age until which termination of pregnancy is permissible. (<a href="http://www.unpopulation.org/">World Abortion Policies, 2007</a>) Thus the proposition that there ought to be a limit fixed beyond which termination of pregnancy cannot be allowed, is widely accepted as reasonable and rational.<br />
<br />
Secondly, this proposition is largely motivated by factors such as risk to the life and health of the woman in a late abortion and also viability of the foetus. The point of viability may vary from case to case (<a href="http://www.c-fam.org/about_us/id.5/author_detail.asp">Stephen M. Krason</a> , Abortion – Politics, Morality and the Constitution, 1984 p. 347) and similarly the risk that each woman would have also varies from individual to individual. Therefore a common scheme of general application governing the upper limit of abortion has to be evolved in the light of various factors such as health and safety of the woman, the viability of the foetus, other socio-cultural conditions prevalent in India such as sex-selective abortions, etc. Inevitably the legislature has to counterbalance conflicting claims while determining this upper limit. On one hand the freedom of choice given to the woman to terminate her pregnancy under certain circumstances and on the other the danger to her life in undergoing a late abortion and also the viability of the foetus. The balancing of these conflicting claims involves minute questions of policy which must be left to the judgment of the legislature. <br />
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<strong>The policy is reasonable - </strong><br />
<br />
This policy is not unreasonable because it has been formulated keeping in mind all relevant facts. (<em>Nagaraj v. State of A.P</em>) such as health and safety of the woman, and viability of foetus.<br />
<br />
The relative risk of dying as the consequence of abortion approximately doubles for each 2 weeks after 8 weeks gestation. (William's Obstetrics, p. 247) Besides, in performing a late abortion there is not only a danger to life of the woman but it could also result in severe and fatal infections. The object of the MTP Act was to regulate abortions in order to reduce the maternal mortality rate and thereby ensure safety of pregnant women. Despite improvements in medical technology, the mortality rate in India during abortion is still very high and the Government is under tremendous pressure to address the same. (Concluding Observations of the Committee on Economic,Social and Cultural Rights, Fortieth session, 28 April - 16 May 2008 E/C.12/IND/CO/5) Thus the classification made still has a nexus with the object of the Act and cannot be considered to be unreasonable. <br />
<br />
A foetus is said to become viable i.e. capable of surviving outside the womb of the mother if prematurely born, at the end of 20th week. The chances of survival of a foetus are much higher if born between the 24th and 28th week but its survival at the 20th week is possible. (Stephen M. Krason ) Viability of the foetus forms a very vital consideration as the interest of the State in protecting the potential life becomes compelling, thereby justifying intervention. (Roe v. Wade) The countries which fix their upper limit of abortion on this consideration vary between 12 weeks to 28 weeks. Thus there is no one fixed point of reasonableness and there is a wide and large area within which the legislator can act without violating the constitutional mandate of reasonableness. This is the area where the courts would permit a ‘free play in the joints,’ to the legislators and having fixed the limit at 20 weeks, the legislators are within the mandate of reasonableness. <br />
<br />
Thus these arguments that may be shown to exist from the State's side show that the said limit can be consititutionally valid.<br />
<br />
It will be interesting to see what the Courts will have to say about this provision when a case similar to Niketa Mehta's - comes up for discussion again, and where the court actually gets the opportunity to decided on the question of constitutionality of the provision.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com4tag:blogger.com,1999:blog-4909407875632981048.post-47748412379455588052009-11-08T09:45:00.000-08:002010-05-12T05:50:33.645-07:00Viability argument - Constitutionality of the 20 week limit in MTP ActLet us now consider the next possible argument that the State may raise in its defence to justify the rational of a 20 week upper limit - Viability of the foetus. <br />
<br />
Many countries which have an upper limit on abortion, have it because of the element of viability of the foetus. Viability is that stage from which a foetus becomes capable of surviving outside the womb of the mother. Medically this stage is said to be certain between 26-28th week. ( Stephen M. Krason, Abortion- Politics, Morality and the Constitution, 1984 p. 346) Also, The prospects for babies born before the 24 week limit are usually very poor. ( Study published by <a href="http://www.guardian.co.uk/society/2008/may/09/health.medicalresearch">British Medical Journal</a>) Thus clearly the argument that the 20 week limit is in support of the viability of the foetus does not hold good. <br />
<br />
Even assuming that this limit was valid on grounds of viability of foetus, it would have no bearing on abortion of a foetus on eugenic grounds. Most of the countries which recognize viability of foetus as a ground for placing an upper limit until which abortion may be allowed, do not apply the limit in case the foetus suffers from abnormality. In UK, though the limit is fixed at 24 weeks, abortion is allowed at anytime after the said limit if the foetus is detected with abnormality. ( Section 1(d), Abortion Act, 1967) Similar is the case with other legislations in <a href="http://www.ippfen.org/NR/rdonlyres/2EB28750-BA71-43F8-AE2A-8B55A275F86C/0/Abortion_legislation_Europe_Jan2007.pdf">European countries</a>, South Africa etc.. The reason being that, certain abnormalities such as congenital heart defects can be detected only after the 20th week.(William's Obstetrics, 22nd edition, p. 316) Thus, if a limit was imposed for fetal abnormality, it would have implications for women whose foetus was detected with an abnormality after the limit. Furthermore, even when defects are detected in the 18-20th week, the woman needs to be given enough information and time to help her understand the nature of the fetal abnormality and the probable outcome of the pregnancy in order that she can make an informed decision. Thus for this reason, atleast in the case of foetal abnormality an upper limit on abortion must not be placed. <br />
<br />
Hence in a Niketa Mehta like situation where the foetus is detected with a congenital heart problem after the 20th week limit, and the woman wants not to give birth to such a child the provision is discriminating against her. <br />
<br />
<strong><em>(Please note - These arguments should not be miscontrued as a quarrel against equal rights of the handicapped to be born.)</em></strong>Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-62971389844320193022009-11-08T09:15:00.000-08:002010-05-12T05:49:17.531-07:00Argument of Woman's Safety - Constitutionality of the 20 week limit in MTP ActThis post is in continuation of my earlier post - presenting possible arguments from the Petitioner's side. <br />
<br />
In my opinion, the constitutionality of the 20 week limit may be challenged under Article 14 of the Constitution, on the unreasonable classification test. The Supreme Court has laid down the following tests to determine when a classification would be reasonable:<br />
<br />
<br />
i. It should be based on an intelligible differentia which distinguishes persons or things grouped together in the class from others left out of it.<br />
<br />
ii. The differentia adopted as the basis of classification must have a rational nexus with the object sought to be achieved by the statute in question<br />
<br />
The two groups or classes created by the said limit are women pregnant up to the 20th week and those who have exceeded the 20th week- where the former may abort, the later cannot. The next question is whether this classification bears a rational nexus with the object sought to be achieved. What could have been object in the minds of the legislators in prescribing a limit of 20 weeks? Nothing in the text of the Act indicates a justification for the same. <br />
<br />
The primary objective however appears to be to <strong><em>ensure the safety of the woman</em></strong>. This can be seen from 1) the circumstances that led to passing of the Act and 2) Parliamentary debates. These are relevant factors that can be taken into account to determine the true intention of the legislator when the words of the statute are not clear. <br />
<br />
The Indian Penal Code, 1860 banned abortion, except to save the life of the woman. This strict law on abortion was often breached, and women would resort to untrained and unqualified practitioners for abortion, thereby resulting in a high maternal mortality rate. Thus the object of legalizing abortion by passing of the MTP Act was the need to curb large scale unsafe abortions being performed in unhygienic conditions. <br />
One even finds the following statement in the Debates- <em><strong>" abortion is not contemplated beyond the said period as no gynecologist can ensure the safety."</strong></em> (Medical Termination of Pregnancy Bill, 1969 : Parliamentary Debates 1969, p. 2729)<br />
<br />
Thus if the rational for the 20 week limit was safety of women then the distinction made certainly had a nexus with the object 38 years ago as medical science was ill-equipped to address termination of pregnancies beyond the 20th week. In the modern context, however, the risk to the mother in case of termination of pregnancy at 25 weeks is not significantly higher than the risk at 20 weeks. ( <a href="http://www.rhrealitycheck.org/blog/2008/08/20/abortion-denial-india-highlights-limitations-law">D. Gaur Singh</a> ) Hence, if the object of the time limit under the MTP Act was the safety of the woman, then with the negation of that risk due to new technology, the reason no longer remains valid. And a law which was justified at the time of its enactment may, with the passage of time, become arbitrary because of a change in circumstances (<em><strong>Synthetics and Chemicals Ltd. v. State of UP, AIR 1990 SC 1927</strong></em>) and therefore liable to be challenged as being violative of Article 14. ( <em><strong>Motor General Traders v. State of AP, AIR 1984 SC 121</strong></em>) Besides, the Act in any case leaves the safety of women to the judgment of the medical practitioner so even if the limit is withdrawn the requirement of an authorized medical practitioner’s opinion would still remain and no compromise would be made in respect of the safety of the woman. <br />
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Thus this can be one argument which renders the provision unconstitutional. In my next post I will consider another possible argument in support of the provisions unconstitutionality. This argument takes into consideration another possible rational for having an upper limit at 20 weeks - the viability of the foetus.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-30374271065096082772009-11-05T10:14:00.000-08:002010-05-12T05:47:01.873-07:00Constitutionality of the 20 week limit in MTP ActThe Indian law of Abortion is governed by the Medical Termination of Pregnancy Act 1971 (MTP Act or the Act). The Act allows abortion on the grounds mentioned in Section 3 of the Act. This section permits abortion only until the 20th week of pregnancy. Beyond the said limit abortion is permissible only when termination of pregnancy is immediately necessary to save the life of the pregnant woman.(Section 5 MTP Act) <br />
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Section 3 reads as follows:<br />
<br />
<strong>"When Pregnancies may be terminated by registered medical practitioners.-</strong><br />
<br />
<em><strong>(1) Notwithstanding anything contained in the Indian Penal Code (45 of 1860), a registered medical practitioner shall not be guilty of any offence under that Code or under any other law for the time being in </strong></em><br />
<em><strong>force, if any pregnancy is terminated by him in accordance with the provisions of this Act.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(2) Subject to the provisions of sub-section (4), a pregnancy may be terminated by a registered medical practitioner,-</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(a) where the length of the pregnancy does not exceed twelve weeks if such medical practitioner is,</strong></em><br />
<em><strong>or </strong></em><br />
<em><strong>(b) where the length of the pregnancy exceeds twelve weeks but does not exceed twenty weeks, if not less than two registered medical practitioners are.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>Of opinion, formed in good faith, that,-</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(i) the continuance of the pregnancy would involve a risk to the life of the pregnant woman or of grave injury physical or mental health ; or </strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(ii) there is a substantial risk that if the child were born, it would suffer from such physical or mental abnormalities as to be seriously handicapped.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>Explanation 1.-Where any, pregnancy is alleged by the pregnant woman to have been caused by rape, the anguish caused by such pregnancy shall be presumed to constitute a grave injury to the mental health of the pregnant woman.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>Explanation 2.-Where any pregnancy occurs as a result of failure of any device or method used by any married woman or her husband for the purpose of limiting the number of children, the anguish caused by such unwanted pregnancy may be presumed to constitute a grave injury to the mental health of the pregnant </strong></em><br />
<em><strong>woman.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(3) In determining whether the continuance of pregnancy would involve such risk of injury to the health as is mentioned in sub-section (2), account may be taken of the pregnant woman's actual or reasonable foreseeable environment. </strong></em><br />
<br />
<em><strong>(4) (a) No pregnancy of a woman, who has not attained the age of eighteen years, or, who, having attained the age of eighteen years, is a lunatic, shall be terminated except with the consent in writing of her guardian.</strong></em><br />
<em><br />
<strong></strong></em><br />
<em><strong>(b) Save as otherwise provided in C1.(a), no pregnancy shall be terminated except with the consent of the pregnant woman."</strong></em><br />
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My focus is on Section 3(2)(ii) and Section 5. According to this provision, termination of pregnancy on foetal abnormality is permitted only until the 20th week. Thereafter, even if the foetus is detected with a foetal abnormality termination of pregancy will not be legal unless it is neccessary to save the woman's life. <br />
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A case which came up on this issue in 2008 was the Niketa Mehta Case before Bombay High Court. The petitioner challenged the constitutionality of this provision which allows abortion only until the 20th week. This case however never looked into the question of constitutionality as the Court found the necessary ground permitting abortion to be absent at the first place i.e. there was <strong>no</strong> substantial risk that if the child were born, it would suffer from such physical or mental abnormalities as to be seriously handicapped.<br />
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If however this question was discussed then what would the arguments of the Petitioner and State be? <br />
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In my next post - I will first present the possible arguments that the Petitioner can make, i.e. that the said section is unconstitutional.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-2440309243142328872009-11-03T11:41:00.000-08:002009-11-03T12:01:20.711-08:00Can an instalment contract be avoided under Art.49/64 CISG?In continuation to my earlier post, in this post, I will be proposing a counter argument - that an instalment contract <strong><em>can</em></strong> be avoided under Art.49/64 CISG<br />
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In determining the meaning of an international treaty, one of the rules of the 1969 UN Convention on the Law of Treaties is that recourse may be had to supplementary means of interpretation including the preparatory work of the treaty. (Article 32 of the 1969 Vienna Treaty Convention.) In the interpretation of the CISG also, its legislative history can be decisive, as this would be in accordance with Art. 7(1) of the CISG. <br />
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<br />
If we look at the legislative history of Art.73, we will see that the purpose of incorporating 73(1) is to enable the buyer to make partial avoidance of an installment contract. The purpose of 73(2) was to encompass an anticipatory breach situation, where the basis of the anticipation is a breach already committed. While the purpose of Art. 73(3) is to provide for a right of avoidance having retroactive effect, justified by the close interdependence between the breached instalments and other instalments. Art.73 however does not take into account a situation where, the breach of obligation in respect of an instalment amounts to fundamental breach of the whole contract. <br />
<br />
On the other hand Art. 49 (1) (a) allows the buyer to avoid the contract when the failure by the seller of any of his obligations under the contract or convention, constitutes a “fundamental breach of the contract.” <strong><em>Thus Art 49 refers to situations where the failure to perform by the seller concerns the contract as a whole</em></strong>.( <a href="http://www.cisg.law.pace.edu/cisg/biblio/kazimierska.html">Anna Kazimierska</a> ) <strong><em>Thus even if the contract is a contract for delivery of goods by instalments, the buyer can avoid the entire contract under Art. 49(1)(a) if the seller's default constitutes a fundamental breach of the entire contract.</em></strong> (<a href="http://www.cisg.law.pace.edu/cisg/biblio/flecht.html">Harry M. Flechtner</a>). This argument can similarly apply to Art.64 i.e. it refers to situations where the failure to perform by the buyer concerns the contract as a whole and thus the seller can avoid the entire contract under Art. 64 (1)(a) if the buyer’s default even in respect of one instalment constitutes a fundamental breach of the entire contract.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-15857612765332210382009-11-03T11:15:00.000-08:002009-11-03T11:59:46.611-08:00Can an instalment contract be avoided under Art.49/64 CISG?The Convention on International Sale of Goods (CISG) provides for avoidance of contract as a remedy to both the buyer and seller if there is a fundamental breach of the contract. The buyer is given this right under Art.49 whereas the seller has a right under Art. 64. The CISG also provides for a special article on avoidance (Article 73) available to both seller and buyer, if the contract is one of installments. A contract is considered to be an installment contract, under the CISG, when it provides for deliveries in separate lots. <a href="http://www.cisg.law.pace.edu/cisg/text/secomm/secomm-73.html.">(Secretariat Commentary on art. 64 of the 1978 Draft [draft counterpart of art. 73 CISG],</a> <br />
<br />
Art. 73 provides for avoidance in three cases:<br />
<br />
(1) to avoid only that instalment in respect of which a fundamental breach has occurred, <br />
(2) to avoid future instalments if a breach that has actually occurred gives him good reasons to conclude that a fundamental breach will occur with respect to future deliveries, <br />
(3) to avoid past and future deliveries if by reason of their interdependence, they could not be used for the purpose contemplated. <br />
<br />
On the other hand, Art. 49(1) (a) stipulates that the buyer may declare the contract avoided if the failure by the seller to perform any of his obligations under the contract or this convention amounts to a fundamental breach and similarly Art. 64 (1) (a) lays down that the seller may declare the contract avoided if the failure by the buyer to perform any of his obligations under the contract or this Convention amounts to a fundamental breach of contract.<br />
<br />
The question that arises therefore, is if there is a contract of instalment and one instalment has been delivered and others are due and a party has been found to have breached his obligation under the contract or convention, then can the other party avoid the whole contract (i.e even in respect of deliveries still due) under Art. 49/64 as the case may be, on the justification that a fundamental breach of the whole contract has occurred? Or Is his supposed to show that a fundamental breach has occurred with respect to the installment delivered and that he anticipates that a fundamental breach will occur with remaining deliveries, in order to avoid the whole contract? <br />
<br />
This question may at a glance appear of mere theoretical or academic significance to some but in my view this is an issue with great practical significance. This is because at the time of proving or disproving, it becomes important to distinguish between whether a fundamental breach has occurred or a fundamental is going to occur. The circumstances which will qualify each of these situations are different and thus the aforesaid question becomes important to answer. <br />
<br />
The first argument on this question, is that when there is an instalment contract, the right to avoid the “entire contract” can only derive from Art.73 of CISG and not from Art.49/64 of CISG,<br />
<br />
<br />
Peter Huber & Alastair Mullis, in their book “THE CISG A New Text Book for Students and Practitioners” suggest that Art. 73 provides for a tailor – made rule on intstalment contracts. Thus this rule should not be circumvented by the general rule of Article 49. Thus when the contract is for delivery of goods by installments, a buyer can avoid the whole contract only by showing that a default in a completed delivery constitutes a fundamental breach with respect to that delivery under Art.73(1) and gives him grounds to anticipate a fundamental breach as to future installments under Art.73(2) or under Art.73(3) if, by reason of their interdependence, the deliveries cannot be used for the purposes contemplated by the parties at the time of the conclusion of the contract. (<a href="http://www.cisg.law.pace.edu/cisg/biblio/liu11.html">Chengwei Liu</a>), <br />
<br />
In my next post I will consider the other argument - that a buyer or seller has the option to avoid the whole contract under Articles 49 and 64 respectively and not necessarily as per the terms of Art. 73 even when performance is duePreeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-54449381270398158182009-10-31T13:12:00.000-07:002009-10-31T13:12:42.312-07:00Can Indian Christians Adopt?Currently the position in India is such that this question can neither be answered in the positive nor can it be answered in the negative. This is premised on the fact that there is no statute governing adoption amongst Christians and therefore the law is largely determined through diverse customs and conflicting judicial decisions. This question is further complicated due to diverse positions relating to adoptions in case of abandoned children, adoptions by guardians and adoption from original parents. <br />
<br />
<br />
The customs in which Indian Christians are allowed to adopt are the agricultural tribes of Punjab (<em>Sohan Lal V. A.Z. Makuin, AIR 1929 Lahore 230</em>) and the Syrian Christians of Travancore, Kerala. (Rao Bahadur L.K. Anantakrishna Ayyar in “the Anthropology of Syrian Christians”.) On the other hand, customs in Goa have apparently considered adoption to be legally impermissible. (<em>Carlos Tavora and Ors. v. Maria Felicidade Fernandes e Lobo and Ors.</em>) <br />
<br />
As far as judicial decisions are concerned, <a href="http://www.indiankanoon.org/doc/895370/">Bombay</a>, <a href="http://www.rishabhdara.com/sc/view.php?case=39109">Kerala</a>, Karnataka (AIR 2007 Kant 121) and Rajasthan High Court (RLW 2008(4)Raj3409) have held that adoption is not prohibited amongst Indian Christians and in fact the Canon law permits it. In Allhabad High Court however, in <em><a href="http://www.indiankanoon.org/doc/156106/">Ajit Datt v. Mrs. Ethel Walters</a></em>, <strong>G.P. Mathur, J</strong>. took the position that there is no custom amongst the Indian Christians that allows adoption. Even in countries like US and UK where there is a predominant Christian population adoption was permitted through statutes. Since in India there is no legislation permitting adoption amongst Christians, they cannot legally adopt. <br />
<br />
The greater complexities arise when these courts discuss the question on formalities necessary for a valid adoption and the circumstances of the adoption. The Bombay High Court in the matter of <em><a href="http://www.indiankanoon.org/doc/895370/">Manuel Theodore D’souza</a></em> laid down a principle in respect of abandoned children and it held, “<em>In the absence of any legislation setting out who can adopt, person or persons who has/have taken a child in guardianship under the Guardians & Wards Act will have the right to petition the courts to adopt the child.”</em> Thus the scope of this judgment is restricted to Indian Christians who have taken a child in guardianship and are seeking to adopt such child. The Kerala High Court in <em><a href="http://www.rishabhdara.com/sc/view.php?case=39109">Maxin George v. Indian Oil Corporation</a></em>, opines that among Christians also formalities of adoption takes place in the physical act of giving and taking of the child (like under the Hindu Adoption and Maintenance Act). The same court however held in <em>Philips Alfred Malvin v. Y.J. Gonsalvis </em> that the fact of adoption being mentioned in the baptism certificate constitutes valid adoption. Then there is also the <a href="http://nicp.nisd.gov.in/pdf/jjact.pdf">Juvenile Justice Act</a>, which permits Indian Christians to adopt but this again governs only institutional adoption.<br />
<br />
In conclusion, the current position therefore is that most of the courts excluding one or two have held that according to custom Indian Christians may adopt. Christians can definitely adopt in the states of Maharashtra, Punjab, Kerala, Karnataka, and Rajasthan. In Maharashtra, Christians can adopt only after being guardians of the child and by petition to the court. In Kerala adoption in all cases is possible and various ceremonies may be considered valid like baptism, or physically giving and taking the child. With the entry of Juvenile Justice Act all Indian Christians can adopt institutionally as per the procedures prescribed in the Act. <br />
<br />
It is time that the legislators step in and bring into force a legislation that will codify and unify the law governing adoptions amongst Indian Christians, so that there can be certainty in the area of intestate succession especially when the deceased leaves behind adopted children.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0tag:blogger.com,1999:blog-4909407875632981048.post-18344083580228400112009-10-30T22:16:00.000-07:002009-10-31T12:20:27.557-07:00Can a Woman be "Respondent" under DV Act?Two High Court judgments (<a href="http://vinayak.files.wordpress.com/2008/08/dv-act-respondent-cannot-be-a-woman-orders-against-women-as-respondents-can-be-quashed.pdf">Madras</a> and <a href="http://www.indiankanoon.org/doc/1619864/">MP</a>) take the view that a woman cannot be a respondent under DV Act as defined in Section 2(q). Section 2 (q) reads - <em>Respondent means <strong>any adult male person</strong> who is, or has been in a domestic relationship with the aggrieved person and against whom the aggrieved person has sought any relief under this Act: <strong>Provided</strong> that an aggrieved wife or female living in a relationship in the nature of a marriage may <strong>also file a complaint</strong> <strong>against a relative of the husband</strong> or the male partner. </em><br />
<em></em>The unanimous opinion of these Hon’ble High Courts has been explained as follows in another judgment :<br />
<br />
“…<em>Section 12 of the Act provides that an application (not a complaint) for seeking one or more reliefs under the Act can be filed. On perusal of Section 18 to 22 of the Act, it appears that the reliefs under these Sections can be passed on the application under Section 12 of the Act. The word complaint as appeared in the definition of respondent under Section 2 (q) of the Act has not been defined anywhere in the Act. Although it is not provided that the definition of complaint can be considered the same as provided under the Cr. P. C but at the same time it is also not prohibited…”<br />
<br />
“It is clear by the definition that a complaint as provided in Cr. P. C can only be for an offence. Only two offences have been mentioned in the Act and those are (i) Under Section 31 and (ii) Under Section 33. It appears that this word complaint appeared in the definition of respondent has been used for initiating proceedings for these two offences and an aggrieved wife or female living in a relationship in the nature of a marriage has been given a right to file a complaint against a relative of a husband or a male partner. This word complaint can not be considered beyond the scope of main provisions of this section which has been defined in first part of Section 2 (q) i.e. for any relief under this Act…”</em> (excerpts from <em><a href="http://ipc498a.files.wordpress.com/2009/02/kapil-vs-urvashi.pdf">Kapil Rastogi v. Shakuntala Rastogi</a></em>)<br />
Thus no relief under DV Act can be claimed against a woman in view of these Judgments.<br />
<br />
The other view however is that a woman too can be a respondent under the DV Act. The scope of the proviso is clearly narrow as compared to the first part of the Section; else it would not be a proviso. But the scope of the proviso cannot be restricted by the use of the words “complaint.” This is because the word has not only been used in Section 31 and 33 as pronounced by the Courts but also in Section 5 which lays down the duties of police officers, service providers and Magistrate. It states that “a police officer, service provider or Magistrate who has received a complaint of domestic violence”…. And then goes on to enumerate their duties. This clearly indicates that a complaint under DV Act is a complaint in the general sense and not in the sense of complaint against an offence under Cr.PC definition.<br />
Secondly if a complaint can be filed only in case of Section 31 i.e. non-compliance with orders, then this would mean that no action can lie against a woman whatsoever as an act of non-compliance of an order can be done only by the person against whom the order is passed, which as according to these aforementioned High Courts can only be a male person. This interpretation therefore would render the proviso completely meaningless.<br />
Finally, if the legislature intended that no relief should be claimed against a woman or that no order should be passed against a woman, then it would never have incorporated a proviso to section 19 (1) (b) which lays down that a residence order directing the respondent to remove himself from the shared household shall not be passed against any person who is a woman. The inclusion of this proviso shows that other orders may be passed against a woman but a residence order of this nature cannot be passed.<br />
<br />
Then given this, does this mean that a woman can also be a respondent like any male person with whom the aggrieved person is in a domestic relationship? No, certainly not. The scope of the proviso is restricted to an aggrieved wife or female living in a relationship in the nature of a marriage. This means that a woman can seek relief against her mother –in –law (being the relative of her husband), but she cannot seek similar relief against her own mother. A woman can seek relief against her father or brother (being adult male persons with whom she lives in a domestic relationship) but she cannot seek relief against her mother. The import of the definition therefore is that any male person can be a respondent but relief against a woman lies only if she is a relative of the husband or male partner of the aggrieved person and not otherwise.Preeti Sukthankerhttp://www.blogger.com/profile/00284949750643996301noreply@blogger.com0